Auto insurance is a big issue for many people. Many people will do their research on the best auto insurance rates but will fail to see other factors that they may not know of that can reduce their expenses. Here are some areas to look at on how to obtain maximum savings.

Collision/Comprehensive

You should take a good hard look at whether you really need this or not.

Most Insurers just add it in automatically in your quote, but it may not be necessary.  Collision insurance is used in the event that your vehicle is in a single vehicle accident that is your own fault, or a multi vehicle accident where you are at fault.

It covers the cost of repairing your vehicle in either case.

In an accident that is not your fault, your vehicle will be repaired even without collision insurance.  Comprehensive insurance is essentially coverage for fire and theft.

When looking at whether you should have these coverages in your policy, you should consider the following:

• the current value of your vehicle
• the cost of the coverage
• your financial ability to fix/replace your vehicle yourself if needed
• your own feelings on your driving ability and the risk of theft.

My personal guideline for this is that when my vehicle’s value drops below $5k, I remove these coverages, unless they are very cheap to maintain.  There would be no point in me paying $500/year extra for a $4k vehicle.

Deductibles

If you are financially able (meaning you can afford the cash outlay if needed), raise your deductibles to a higher level.  First ask your insurer how much this will save and then decide whether it’s worth the additional risk to you.

Price Shopping

Insurance rates can vary wildly between insurers in provinces that use private insurance, so it can be very beneficial to shop around for the lowest rate.  Use a site like Insurance Hotline or Kanetix to get a bunch of quotes at once or individual insurers websites for single quotes.

Vehicle Type

Many people forget to check what their insurance rate will be when they are shopping for a new vehicle, only to get a shock when they buy and then call their insurer.  Don’t subject yourself to this, as it’s too late once you’ve signed!

Even better, keep auto insurance in mind when selecting the vehicles you are considering.  Generally, the best insurance rates go to vehicles with high safety ratings, low theft rates, and low repair rates.

Driving Record

The obvious one, keep your driving record clean, and enjoy the savings.

Combo Savings

You will usually get a discount if you combine your auto insurance with any home or renters policy. PC Financial is a great place to get a bundled discount.

Be careful, though, sometimes better rates are available on individual policies with different insurers!  There can be savings in combining, but don’t just assume there will be.

Other Unneeded Insurance

Check your policy carefully for other coverages you can remove, if you don’t feel they add value.  A common one is a rental replacement clause.

Driving Courses

Younger/newer drivers will save with many Insurers if they take a driving or safety course to improve their skills.  Ask your insurer, then decide if it’s worth it.

Be aware of time though, as some Insurers only allow for a certain window of time between when you get your driver’s training certificate and when you get your vehicle to be eligible for the discount.

Billing Options

Some insurers charge a fee to have monthly billing, often a rather high one.  Ask your insurer, and if they do, consider switching to annual billing.

Affiliate Discounts

Ask about any discounts for auto club memberships or professional associations.  My wife gets a discount just because she works at a hospital that is listed with my Insurer.  I didn’t know this until I asked them, though!

Also, if you went to a post secondary school, you may be eligible for a discount. A friend of mine went to the University of Waterloo and has a great discount!

The Bottom Line

A final note: it may be tempting to consider lowering your liability insurance coverage down to the legal minimum, but in my opinion, this is not a smart way to save money.  Unless you have no assets, there is far too much risk in exposing yourself to lawsuits due to inadequate coverage here.