How is your automobile insurance premium calculated?
Ever wondered why you don’t pay the same automobile insurance premium as your neighbour or colleague who drives the same model car?
Here’s what influences your insurance premium.
Your age and gender
If you belong to a segment of the population that files more claims, this will be reflected in the cost of your insurance.
Your driving record and vehicle use
Your insurance premium may be lower if:
- You’ve had a driver’s licence for a long time.
- You don’t have any traffic violations.
- You haven’t had an accident where you were at fault.
- You haven’t had an accident where you WEREN’T at fault
- You don’t travel long distances with your vehicle.
- You don’t use your vehicle for business (to visit clients, etc.).
Where you live
The risk of having your automobile stolen is higher in certain neighbourhoods or regions. Your premium therefore increases or decreases depending on where you live.
Type of vehicle you drive
Your premium will be higher or lower depending on the type of vehicle you drive (make, model, year, value, engine, cost of replacement parts and even the number of doors).
Type of coverage you want
Premiums go up or down based on coverage. For example, if you only have civil liability coverage, you’ll pay less for your insurance than if you are covered for civil liability and vehicle damage.
The deductible is the amount the insurer does not pay. For example, if your deductible is $500 and your accident costs $2,000, the insurer will only pay $1,500. The higher the deductible, the more you’ll save on your insurance premium.
Your credit score
Some insurers think that people with a good credit score are more careful drivers and take better care of their vehicles. Insurers give a discount based on a client’s financial situation. The sounder your financial situation, the better your discount.
Your insurer may offer you a discount if:
- You take out both your auto and home insurance with it.
- You insure two vehicles at the same time.
- Your vehicle has an anti-theft system.
- You’ve lived in the same area for the past several years.
- You drive a hybrid vehicle (runs on electricity and gas).
- You use its website.
Choose your auto insurance wisely
Before choosing automobile insurance , check the cost, deductible, civil liability coverage and other features.End of the insight
No one insurer offers the best price all the time.End of the warning
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Documentation and tools
- Let's talk insurance! (pdf - 134 KB)This link will open in a new windowUpdated on 29 October 2018
- Choosing Auto Insurance (pdf - 2 MB)This link will open in a new windowUpdated on 25 February 2013
- Insurance sold by Lenders and merchants (pdf - 558 KB)This link will open in a new windowUpdated on 6 January 2020