The most frustrating thing about insurance is that there is no exact formula that you can use to know how much you should be paying for the mandatory coverage necessary to drive in Canada. There are all sorts of factors that insurance companies use to determine how much they charge you. Based on a combination of things about you and your driving history, it is important to know how what you do, where you live, and who you are can all factor into what you pay monthly.
To keep costs low, you need to understand what issues Winnipeg autopac agents and insurance companies use to estimate the risk they have for insuring you. These are the seven biggest factors that companies use to estimate how much they should charge to cover you.
1 Your policy limits and deductibles
The more coverage you take out, the more expensive it will be. But be careful – if you only take out the minimum and are in an at-fault accident, whatever exceeds your policy limits might be your responsibility. The deductible is the amount that you have to pay out-of-pocket.
The lower your deductible is, the higher your insurance rates will be. Although you don’t want to set your deductible too high, if you are a safe driver and have a good history, you might want to take the higher deductible and save money monthly on your auto insurance premium.
2 The type of car that you drive
If you drive a more expensive car, then it will cost more to insure. Also, different types of car categories have different rates due to how and why people drive them. For instance, someone who drives in a minivan is less likely to engage in risky behavior than someone who has a sports car. So if you have a fast car, then you will likely pay more. What insurance companies also take into consideration are things like safety ratings and how well the car can protect you in an accident.
3 How much time you spend in your car
If you are in sales and you drive about 40 hours a week, then you are going to pay more for insurance than you would if you took public transportation and barely drove the car at all. Insurance companies will ask you about how many miles you drive per week to get an estimate of how much time you will be behind the wheel to help estimate your risk of being in an accident.
4 What is your driving history?
People who have a good driving history will pay less than those who have tickets or accidents on their record. Although there is a period after which your accident or ticket is forgiven, it is a long time from when you receive the violation. So be cautious and keep your driving record clean.
5 Where you live
Although it might sound discriminatory, insurance companies do take where you live into account. Things like vandalism, crime rates, urban versus rural areas, and other crash statistics related to where you reside will affect what your insurance premium is.
6 Your credit history
Those who are more conscientious about their money tend to be more conscientious when they are behind the wheel of a car. Considered an estimate of how responsible and accountable you are, your credit history will affect what an insurance company will charge to insure you.
7 Your marital status, age, and sex
Conditions that are sometimes out of your control factor heavily into what an insurance company will charge. If you are under the age of 25, then you are going to pay more than if you are over, simply because those under 25 tend to engage in riskier behaviors and don’t have the same foresight. Single people tend to pay more, and men, who tend to be more aggressive overall behind the wheel, typically get charged more for coverage.
There are some things you can do to lower your insurance premiums and some things you can do nothing about. If you keep your driving record and your credit history clean, then you are going to pay less than someone who does neither. And don’t choose a car you can’t afford to insure – that is a recipe for disaster.