Auto insurance rates vary from person to person and vehicle to vehicle. Your rate is determined using a combination of factors or risk characteristics outlined below.
Your insurance company creates your personal insurance profile based on:
Learn how your car measures up by reading How Cars Measure Up published by the Insurance Bureau of Canada (IBC).
Your driving record includes important information such as:
Previous accidents
The length of time you have had a licence
Whether or not you have taken driver training
Speeding tickets
Driving convictions
The better your record, the lower your premium.
Auto insurance rates are usually higher in urban areas where accidents and car theft are more frequent.
In general, older drivers have fewer accidents than younger drivers, particularly teenagers. After age 25, insurance premiums usually drop. Gender and marital status also affect your risk profile and rates.
Your rates are also calculated based on the number of kilometres you drive per year. Whether or not you drive to work or school also has an impact. Usually, the more you drive, the higher your premiums.
Your rates will be higher if you buy additional coverage or protection. If you drive an older vehicle, and decide not to purchase collision and comprehensive coverage, your rates will be lower. Extra coverage that may increase your rates includes:
collision or upset
comprehensive coverage to protect against theft, vandalism, hail or explosion
Always discuss your options with your insurer, agent, or broker.
Your deductible is the portion you will be required to pay if you make a claim. Your insurance company may offer separate deductibles for:
collision or upset
comprehensive
all perils
specified perils
direct compensation – property damage (DC-PD) coverages
As a general rule of thumb, the lower your deductible, the higher your premiums.
Auto insurance premiums can differ from one insurance company to another. In general, insurance works according to a “pooling” concept. Insurers group similar risk characteristics, with similar risk groups. Some risk group members may never make a claim, while others may make many claims.
Actuaries analyze the financial costs of risk and uncertainty. They assess risk and estimate future claims your risk group may make to develop individual premiums.
If your risk group was responsible for multiple claims with a particular insurance company, that company’s premiums may be higher than one with a different experience.
