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The definitive guide to auto insurance savings in 2018

January 16th, 2018  |  Auto Insurance

Canadians pay too much for auto insurance. To help rectify this issue we've compiled a list of 40 ways drivers can reduce the cost of their premiums. Not all recommendations will be applicable to all drivers, but there is something here that will help almost any motorist pay less. Read on to learn how you can save on your auto insurance policy. 

1. Get online quotes to find the cheapest rates

Getting quotes online is the fastest and easiest way to save on auto insurance. It allows you to pull in premiums from multiple insurance providers and see who is offering the best deal. Once you’ve compared auto insurance quotes you can either sign up for the cheapest policy or use the offer as leverage in negotiating a new deal with your current provider.

You can obtain quotes over the phone, but doing it online is much more efficient. The process varies among forms, but in most cases, you’ll be asked to provide a bit of information about yourself, your driving history and your vehicle. The process usually only takes 2-5 minutes. 

2. Use a broker to compare auto insurance quotes from multiple insurers

You can get online auto insurance quotes from two sources. The first is an insurance provider’s website. The second, more efficient way to find cheap auto insurance, is to use an online broker.

Brokers aggregate quotes from several insurance companies, so you get three or five or ten rather than just one at a time. HUB Insurance Hunter, for example, gives you 10 auto insurance quotes in just a couple of minutes.

3. Bundle your insurance policies together

Different insurance companies offer different types of discounts, but bundling is pretty much universal. If you take out two or more policies with the same company, you'll save money. It’s the concept of buying in bulk; the insurance company gets more business, and rewards you with a lower rate. 

The most commonly bundled policies are home and auto, but other policies, like condo, life, commercial, etc., may qualify as well. Usually, bundling will save you about 10% on each policy, making it an ideal way to maximize overall savings.

4. Take advantage of a multiple vehicle discount

For the same reason insurance companies give discounts for bundling, they also give discounts for insuring more than one car. While a discount can be earned for insuring two cars that you personally own, it can also be earned by insuring two cars that are owned by different members of the same household.

If, for example, you and your partner, or you and your child both insure your vehicles with the same insurance company, both of you will get a discount. The value of the discount is usually similar to bundling, somewhere near 10%. If you insure three or more vehicles with the same company, the value of the discount can scale upward.

5. Increase your auto insurance deductible

A deductible is the amount a driver must pay when making a claim. If repairs to a vehicle cost $1,000 and your policy carries a $500 deductible, you’ll be on the hook for half the bill. If your deductible is $250, the insurance company will pay $750 and you’ll pay the remainder.

But while a low deductible means paying less in the event of a claim, it also means higher monthly premiums. As a general rule, the higher the deductible, the lower the premium. If you're looking to shave off cost from your monthly expenses, upping your deductible is an effective way to do it.

6. Pay your premiums annually, not monthly

Most people pay their auto insurance premiums every month. However, many insurance companies offer a discount if you pay annually because it ensures you won’t miss payments or cancel the policy partway through the year.

Paying for a full year upfront can be a shock to your finances, which is in part why a lot of people choose monthly installments. The other reason is that it’s not common knowledge that annual payments net drivers a discount. If you have the funds to absorb a large one-time withdrawal, it'll save you about 5-10% of the annual cost of your policy. It will also help you avoid late fees for when a payment slips your mind. Speaking of which...

7. Avoid late fees by paying your premiums on time

One way to save on auto insurance is to avoid additional fees. That means paying your premiums on time. Missing payments can eventually result in the cancellation of your policy, but will at least cost you a little extra in interest.

A good way to avoid this additional fee is to automate your payments. Set up a monthly payment through your bank so you don’t have to worry about remembering.

8. Get a car insurance app

Many insurance companies offer mobile apps. Some features are for convenience (like filing a claim), but many apps also help reduce your monthly premiums.

These apps monitor the movement of your phone while you drive to determine key habits, like acceleration, braking and time on the road. Based on the results of your driving, your insurance company may offer you a discount of up to 25%. Just signing up for the app is usually incentivized with a small discount in the range of 5%. If you’re worried that your driving habits aren’t the type to earn you a discount, don’t sweat it. The apps never make your premiums go up.

9. Take a driver's education course

A driver’s education or defensive driving course is a great way for young drivers to learn the rules of the road. It also happens to be a great way for all drivers to save on auto insurance. Auto insurers like to mitigate risk, and if you’ve taken a class they’ll regard you as a safer driver, and thus offer you a discount. Typically, this discount will be between 5-10%.

If you missed the boat by not taking a class ahead of your G licence test, it’s not too late. Regardless of age, you can enroll in a class and earn a discount. At 10% savings, it won’t take very long before your recoup the cost of the class.

10. Carpool if you have a long commute

Your daily commute has a large impact on the cost of your auto insurance policy. If you’re putting in an hour and a half each way, everyday, you are more likely to have a collision than someone who works from home. 

One way to cut out the commute (for your car, not for you, unfortunately) is to carpool. Once your reduced daily driving responsibilities are reflected by a decrease in your total annual kilometres, you may become eligible for a discount.

11. Take stock of your life

Not in a “get yourself together way,” though. More like, see if any changes you've made get you a discount on auto insurance. Moving to a new postal code could get you a discount. Getting married or having a child could get you a discount. Hitting a new age bracket could get you a discount.

If something major changes in your life, check your broker’s website to see if you're eligible for a discount.

12. Find a safe place to park your vehicle

If you park on the street, you’re vehicle is more vulnerable to damage and theft than if you park in a private garage. Some insurance companies account for this difference and offer a discount to car owners with a safe place to store their ride.

However, this discount is not offered by all companies, nor is it very significant. Typically, drivers wind up saving between $30-$50 annually.

13. Cash in on safe driving

Driving safely isn’t the most exciting or immediate way to save on car insurance, but there’s nothing better for long-term results. Driving safely will help you qualify for a no claims discount and avoid paying deductibles.It’s difficult to assign a monetary value to a good driving record. Over the course of a lifetime it can be tens of thousands of dollars.

14. Install winter tires on your vehicle

In Ontario, insurance companies are legally obligated to offer a discount to drivers that put winter tires on their vehicle in the winter. While some companies follow the spirit of the law by offering up to 10% off, others follow only the letter, offering a measly 1%. Insurers may offer discounts to residents of other provinces, but do so at their own discretion.

In Quebec, winter tires are mandatory from December 15 to March 15, while in British Columbia, winter tires are mandatory for certain regions and roads. In places where they're required, winter tires won't get you a discount because it's assumed everyone has them. 

15. Avoid making a claim when it doesn't benefit you

It’s the official policy of any insurance company that all damage to your vehicle should be reported. However, you should carefully consider whether or not filing a claim is your best option. If your deductible is higher than the cost of repairs, you'll receive no aid from your insurer, but the report will cause your premiums to go up. 

Significant damage to your vehicle is almost always worth reporting, but a fender-bender that costs a few hundred bucks may be better taken care of without involving your insurance provider.

16. Check to see if you’re eligible for group auto insurance

Group insurance is when an association (like a company, alumni or union) strikes a deal to get a discount for its members. This way the insurer gets more business and the group members all pay less. It's the same general concept as bundling your home and auto policies, but sees several people bundle their auto policies together.

To see whether you’re part of a group that gets a discount, check with your broker. Many insurance provider websites also display lists of the groups they work with.

17. Be loyal...when loyalty is valued

It’s not wise to be blindly loyal to your insurance company, but some companies will make loyalty worth your while by offering a discount. It’s fairly common that after one, three, five and ten years, you’ll be eligible for a loyalty discount.

Loyalty discounts are typically small, something like 5%, but can scale up over time. Be aware that these discounts are not universally offered, and that the number of years required, as well as the size of the discount, varies between companies.

18. Get a credit card that covers rentals

Many credit cards provide collision insurance for rented vehicles. This is especially true of travel rewards cards. If you routinely rent cars for travel or business, this perk offers plenty of value.

But remember that not all cards provide the same level of collision insurance. Go online to see how much coverage is provided by your credit card so you won’t be in for a rude awakening when it’s time to call in a claim.

19. Consider insurance before buying a new car, not after

This isn't a discount per se, but if you’re in the market for a new (or used) vehicle it's helpful to factor the cost of insurance into the total cost of the car. Based on safety ratings, features and cost, some models are more expensive to insure than others.

A good way to compare prospective vehicles is to get quotes using your personal driver profile, and switching between models. This way you can see approximately how much you’ll save by selecting option A over option B.

20. Be discerning when lending out your vehicle

Being generous by lending your car to friends and family is admirable, but giving your keys to the wrong driver can have undesirable consequences. Remember that claims are attached to the vehicle, not the driver.

So while lending your car to someone might not feel like a big thing, make sure you’re confident that they’ll return it without incident. Even a small accident can inflate your premiums for years to come.

21. Separate fact from fiction

Knowing how to save is important, but you don’t want to make any decisions based on misinformation. There are a lot of myths about what affects auto insurance premiums. For instance, do you think a red cad will have higher premiums than a gray one? It doesn’t. Do you think you’ll get a big discount for turning 25? Not necessarily.

When looking for an insurance policy, knowledge is power. Find out which factors actually matter (hey look, this list might be a good place to start!), and which are just hearsay.

22. Don't auto-renew...unless you get a discount for it

Because insurance isn’t usually associated with a good time, many people just let their policies auto-renew each year. While this is convenient, it’s financially irresponsible. Auto-renewing prevents you from comparing quotes and finding the best option on the market, which only takes a few minutes.

There are only two acceptable reasons to auto-renew. Either you’ve checked around and determined you have the best deal you can find, or your provider incentivizes you with a discount. Even if the latter is true, it doesn’t hurt to first get some quotes and confirm that the discount is more valuable than an alternative rate.

23. Get a policy with ticket forgiveness

This perk can be immensely helpful if you receive a ticket for a traffic violation. Tickets affect your auto insurance premiums for three years, which means ticket forgiveness acts as a three-year discount every time you’re receive a citation.

The savings depend on the severity of your violation. A case study we conducted last year shows that a driver who incurs a minor speeding violation will save approximately $400 over three years with ticket forgiveness. If the violation is more severe, or multiple tickets are handed out, the savings are even higher.

24. Get a policy with accident forgiveness

Accident forgiveness is similar to ticket forgiveness in that it’s essentially a mulligan. Typically, filing a claim will cause your premiums to rise, but accident forgiveness gives you a freebee. Because accidents stay on your driving record longer than tickets (six years), the savings stretch out even farther.

What’s more is that at-fault accidents are murder on your premiums. Using HUB Insurance Hunter’s own auto insurance quote tool, we created two driver profiles that were identical except one had a recent at-fault accident. The different in price was $98 per month. This means that over the course of three years, accident forgiveness can save you over $3,500.

25. See if you're eligible for a low mileage discount

Less time on the road means less risk to your car, so your insurance company may be willing to offer you a discount. The definition of “low mileage” isn’t consistent among insurers, but if you’re at 20,000 km or under it’s worth looking into.

26. Ensure your primary and secondary driver statuses are correct

If there are multiple drivers registered to the same vehicle, make sure the insurance is parcelled out properly. It’s important to be honest; deceptively claiming a more experienced driver is the primary user can lead to a denied claim. But it’s also important to make sure you aren’t costing yourself money by wrongly identifying a higher risk driver as the primary operator.  

27. If you're an older driver, get a retiree discount

Retired drivers are often rewarded with discounts in the 5-10% range. Not all insurance providers offer this discount, but many do. If you’ve retired since last talking with your broker, give them an update. It could help you save a few bucks every month.

Note that there is sometimes a condition that you must be retired and a certain age, usually about 55. But hey, if you’ve managed to retire before 55 you probably aren’t desperate to save a few bucks on auto insurance. Also, congratulations.

28. If you're a younger driver, graduate your licence

A lot of young drivers race to graduate from a G1 to a G2 licence because it grants them far more independence. While the difference between the G2 and G licence is less extreme, the upgrade does give additional freedom to drivers, as well as an auto insurance discount.

Owning a car before you get a G licence isn’t common, but it’s not unheard of. If you’re in that situation and need a little extra motivation to move up to the G, know that you’ll save some money each month on your premiums.

29. Don’t pay full price for a summer car

Even if you take your car off the road it’s a good idea to keep it insured. In theory, it could still be damaged or stolen, so having some protection remains important. However, a parked and stored car isn’t likely to cause injury to other drivers, so taking liability off of it won’t cause harm.

If you have a vehicle you use for only part of the year - for example, a sports car you keep in the garage all winter - make sure you’re paying only for what you need. In most cases, that means basic damage and theft. All other forms of protection can be re-added when you take it back on the road.

30. Lighten vehicle usage...even if it doesn't get you a low mileage discount

If you can find a way to reduce the kilometres on your car, it may net you some savings on auto insurance. Less time on the road means less risk of a collision, which means you are less likely to file a claim. This translates to lower premiums and a reduced probability that a claim is filed. Driving less also means less stress on your vehicle, which can reduce mechanical costs, as well as the cost of gas.

31. Get a new postal code

It’s not always fair, but your premiums are affected by the neighbourhood you inhabit. Statistics like crime rates and accident frequency influence the amount you pay for car insurance.

We know it’s not practical advice for everyone to up and move in an effort to save on car insurance, but the difference can be substantial enough that, in certain situations, it’s not as far-fetched as you might guess. For example, if you rent an apartment in a big city like Toronto, you could save hundreds of dollars by moving five minutes away. This example is an outlier, but if your living options are plentiful and you aren’t tethered down, it may be worth your consideration. At the very least, Google search nearby neighbourhoods to see how much you could save.

32. Make sure you aren't over covered

One of the most important things about insurance is understadning what you need and what you don’t. While it’s crucial to make sure you protect yourself wherever possible, it’s also important not to throw money away. If you rent a car, check to see if your credit card covers the damage insurance. If it does, there's no need to shell out your own money to buy the coverage. If you have a car that's just sitting in the garage, you may want to insure it against theft, but the likelihood of a collision is pretty small, so you can pass on the collision insurance. 

33. Your credit score some places

In some provinces (Ontario and Newfoundland and Labrador), there are regulations in place to stop insurance companies from accessing their clients’ credit scores. Elsewhere, insurance companies can access credit scores at their leisure, and in other provinces, companies need your expressed consent to access it.

In provinces where insurers don’t have free access to your credit score but can legally ask for it, you may be eligible for a discount if you agree to share the information. Excellent credit scores can net you a small discount, while refusal will render you ineligible for any discount at all.

34. Find a circumstantial discount applicable to you

Different insurance providers offer a handful of lesser known discount options to attract certain demographics. For example, you may come across a discount for students who live more than 50 km away from their parents, while other companies may provide discounts to farmers, veterans or retired people. Check with your broker to see if you meet any criteria.

35. Go with an electric car

Hybrids and electric cars are becoming more popular. In fact, numerous countries are planning to ban the sale of new gas and diesel vehicles over the course of the next couple of decades.

Getting a more environmentally friendly car is rewarding in and of itself some many motorists, but if you like your rewards to be more tangible, be aware that eco-friendly cars can earn you a discount with some insurance companies. You should also note, however, that electric vehicles tend to be more expensive than gas vehicles, and are therefore more costly to replace and repair. So unless the you’re comparing vehicles of similar prices, the electric model will probably be more expensive to insure, and that may even be the case after a discount is applied.

36. Earn a tiny amount of your child's tuition back with an auto insurance discount

If your child is a secondary driver on your policy you can earn a discount when they move to a different city or province to attend post-secondary school. The logic here is that they won't use your vehicle as much as they did while they were living at home. Or maybe insurers are just taking pity on you because of the current cost of tuition. Either way, this discount isn't available if they're taking the car with them. 

The value of this discount can reach up to 50% of the cost of having your child as a secondary driver on your policy. 

37. If you get a speeding ticket, fight it

A speeding ticket costs much more than the amount of the ticket itself because it impacts your premiums for 36 months. By fighting a ticket you can delay its inclusion into your record. This can be helpful if you already have a citation, especially if you have ticket forgiveness as part of your insurance policy. In such cases, drawing out the period before the ticket is added to your record could mean that you never have more than a single ticket at one time, and therefore never pay increased premiums. If you don't have ticket forgiveness, you can still avoid the punative cost of having multiple tickets on your record at the same time. 

38. Get anti-theft features for your vehicle

Owning a vehicle with anti-theft features can earn you up to 5% off your premiums, depending on your insurance provider. Engine immobilizers, wheel locking devices and automatic alarms are some examples of features that can earn you a discount. If 5% doesn't seem like a lot, well, anti-theft features can also prevent your car from being stolen. 

39. Get a car with safety features

At one point, features like airbags and anti-lock brakes would net drivers sizeable discounts (up to 40%). Nowadays, these features may still technically get you a discount but they're so common it's more like a penalty when you lack them. Other more modern features have slid into place to present new opportunities for drivers to save.

Features like electronic stability control, rear-cameras, blindspot alarms and automatic seatbelts and windows are among the examples of discount-worthy features. They aren't likely to add up to 40% in savings, but a couple of these modern conveniences can earn you at least 5% off your auto insurance premium, with savings potentially being much higher.

40. Ask for a discount

If you are elgibile for a discount, don't expect your insuance company to trip over itself to get you to pay less. It is incumbent upon you to inform them as to why you should be paying less. While this may seem obvious, too many people skip this step and leave money on the table.

Always, always, always see what discounts are available and what your insurer can do for you. The worst result that can come from requesting a discount is that you end up paying the same price you're paying now.

Notes on the list

1. We've tried to empahsize this throughout the list itself, but it bears reapeating: not all insurers offer every type of discount. To find out whether or not your insurance provider offers a specific discount, check their website or speak with a broker.

2. To determine the approximate value of each discount, we examined offers from a variety of insurer websites or used our own quote tool. But please keep in mind that discounts vary by insurance proivder.

3. If you're thinking, "I qualify for tons of these...I'll save so much the insurance company will end up paying me!" then check out our article on how insurance discounts stack. It provides clarity on how multiple discounts are applied.

4. Not all discounts are applicable to all drivers, and some are irreconcilable. For example, you're unlikely to get a student and retiree discount. This list is meant to be exhaustive, presenting all available options that drivers from any demographic might be able to obtain. 

5. If you are uncertain whether you qualify for a discount, speak to your broker. They can shed light on the opaque elements of auto insurance and help you pay as little as possible. 

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