We all love the idea of cheap car insurance, but many motorists underestimate the amount of negotiating power they have. If you’re in the market for a new provider or about to renew your policy, then a little education about what impacts your premium could pay big dividends. Cheap car insurance isn’t a game of luck; it’s a game of understanding what levers have the most influence and where to pull them. In this guide, we explore the factors that have the most impact on insurance prices and how to turn them to your advantage.
Vehicle Make
One of the most important factors in your rate is the vehicle you drive. If your car has better safety features, you might be at a lower risk of having to make a claim, but it could also cost more to fix if it does. The added technology, electronics, and styling often make for more costly repairs, and insurers will factor that into your rate.
Stolen vehicles are also a risk factor, and if your vehicle model is a common theft target (or if it's low on loss-prevention features), your premiums could be higher. For this reason, it's important to drive a secure vehicle. The fact that your car has anti-theft features, or that you've installed additional security measures, is a good point to bring up during negotiation. If your vehicle is safer than others in its class, it can give you an advantage in arguing for a lower rate. This is especially true if it significantly deviates from the average risk rating for that model.
Postal Code
For better or worse, where you live still impacts your insurance price. Insurance companies study the claims history in each postal code, and if your neighbourhood has more payouts, whether or not you filed a claim, your premium can be increased.
This practice, which is sometimes called “postal code discrimination,” has been most problematic in Ontario. Although political leaders have indicated future changes may be in the works, postal codes are still a significant part of insurers’ pricing for the time being.
How does this help you? In your negotiations, if you have any positive local attributes, like secure parking, a garage, or low personal mileage if you work near home, it may help lower your overall risk rating and offset some of the built-in risk of your postal code, even if it can’t be ignored entirely.
Driving Record
Your driving record is one of the few things in this list that is completely within your control. Though demerit points don’t come into play when calculating your rate, your history of traffic convictions and at-fault claims certainly do.
Speeding tickets, for instance, are a red flag to insurers that you’re likely to make a claim in the future and hence to be charged a higher rate. A traffic conviction stays on your record for three years, and an at-fault collision for as long as six.
The best way to ensure that your premiums stay low is to drive safely, consistently, and responsibly. If your record has improved lately, that’s great negotiation fodder: bring it up and ask if you now qualify for a lower rate. For note, parking tickets also have no effect on insurance rates, as long as they’re paid on time.
Take Control of Your Premium
There are some things you can’t change (at least not right away), such as your age or how long you’ve been driving. But many risk factors are entirely under your control. Driving a safer vehicle, maintaining a spotless driving record, and knowing the intricacies of your postal code let you haggle with confidence.
