Lorene Publications

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28th December 2018

How Car Insurance Rates Are Calculated

A car is one of the biggest investments that most Canadians make. When looking into protecting one of your most valuable assets, figuring out what determines the cost of your automobile insurance can be tricky. If you’re looking for car insurance quotes in Ontario, here are some things you should know about how premiums are calculated, and how you can find the best rate for your vehicle.

Check The Safety Rating, Cost of Repairs And Prevalence of Theft

One of the main factors you should pay attention to when looking for a vehicle is the safety rating and prevalence of theft. Even if your car is an inexpensive make and model, it may be stolen often, which in turn will increase your car insurance premium.

Vehicles like the Honda Civic are great low-cost cars, but the insurance premiums are higher because it’s one of the most stolen vehicles in Canada. A high safety rating also means that in the event of an accident, you are more protected, which will in turn mean less injuries and less money your insurance provider has to pay in the event of an accident.

Cost of repairs is also a determining factor for the cost of your insurance. Driving a vehicle with expensive parts is expensive to repair. This is especially important to think about if you are considering buying a discontinued vehicle, where the parts may incur unexpected costs.

Understand The Effect Of Your Driving Record And Age

Like it or not, your age and driving record affect your premium costs in a big way. If you have a history of reckless driving or accidents, your premium is going to be higher no matter what policy you choose. If you recognize that you are frequently involved in collisions, adding accident forgiveness to your insurance policy would help you lower your premium over time.

You may also want to consider going with an insurance company that specializes in high-risk drivers. Your premiums will be higher, but it may be the only option until you can improve your driving record. It takes three years for infractions to be removed from your records, so being a more cautious driver starting now will improve your premiums dramatically in only a few years. On the opposite end of the spectrum, being a new driver is also going to garner a higher insurance premium because you have no driving history, so your accident probability is purely based on calculations by your insurance provider.

Use An Online Insurance Calculator

Using a car insurance calculator is the best way to figure out exactly what you’ll be looking at when it comes to your insurance premium. Websites like Kanetix.ca allow you to compare every insurance company available in Ontario, and you can even enter the specific make and model of your vehicle. When it comes to figuring out what you should expect for your car insurance premiums, having this kind of information is the best way to prepare for a meeting with your broker. Even if you’re a high-risk driver, there’s an opportunity to find the cheapest car insurance quote possible so that you can drive safely while working to bring your insurance premium down.