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Lorraine Explains: Don’t just automatically renew your car insurance

Shop for a better rate, and make sure you have adequate coverage

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If your car insurance renewal shows up in your mailbox, don’t just file and forget it. While there is a good chance your rate came down if you’re in parts of the country like Ontarioshoppers have seen substantial changes nearly everywhere. Decreases have resulted from fewer-than-usual payouts on COVID’s less-traveled roadways, but don’t get used to them — nothing gold can stay.

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You need to do more than secure the best price, however. It’s imperative that you make sure you’re getting the right coverage, and that means diving into the fine print. Things to pay attention to on your renewal, or a new policy:

  • Does it accurately reflect your driving patterns, including a continued work-from-home or a return to a commute?
  • If you’ve had a chargeable loss in the previous six years, you’re probably best staying with your current insurer.
  • If you’re purchasing a new car, check insurance rates first.
  • Students moving to residence away from home may qualify you for a reduction in rates.
  • Combine your car and house insurance (also headed up) for added cost savings. Consider putting multiple vehicles in the household with the same carrier for bigger savings.
  • When possible, increase your limits. Bare minimums, especially in Ontario, are not enough.

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If you started working from home in 2020, you possibly contacted your insurer to let them know of the change in your driving habits. That could have triggered a one-time refund, or a drop in your rate. If you’ve recommended commuting, you need to report that.

According to broker Debbie Arnold with Sound Insurance, “most companies have removed COVID capping and discounts, so if you haven’t had a chargeable loss in the last six years, always shop the market to ensure you’re getting the best value.” Brokers have access to multiple markets and can do the legwork for you. That six years is important; any prospective insurer will run your abstract and it takes that amount of time to clear off old claims. If you have claims, sit tight until they’re gone. It’s also a good time to have a household talk about the impact of traffic act offences: if anyone on the policy has caught a speeding ticket and not told the policyholder (Mom or Dad, cough), it will come to light if the holder goes to shop the policy.

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Be careful if you have children of driving age who have headed back to residence at university. While some companies will give you a discount on the underage driver premium if you provide your kid is living a distance away (they’re all different, check with your provider) and not driving your vehicles on a regular basis, never remove them from your insurance entirely. That will result in an interruption in coverage that will cost them far more down the road.

If you’re buying a new car, check out your premiums before signing the contract. Insurance rates are set on more than just your driving record, and often by things out of your control. High theft rates are impacting everyone, and if you are purchasing a vehicle that thieves like or find easy to steal, you’ll pay more. Online rate comparison site LowestRates posts a breakdown of which brands are the least — and most — expensive to insure. According to their stats, Ontarians will pay more to insure a Nissan, Hyundai, Toyota, Honda or Mazda, but pay less to insure a GMC, Chevrolet, Ford, Dodge, Ram, or Acura. Talk to your broker before you buy.

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insurance signing
insurance signing Photo by Getty

Combine your policies to maximize savings. “Property insurance is going up by 10, 20 and 30 per cent, so buying the two lines together may save you hundreds in overall household premium,” says Arnold. “It’s also a good idea to have all vehicles in the household insured with the same carrier. Even if they’re separate policies, multi-policy and multi-vehicle discounts can be sizeable. We have many children of the household who don’t want to be associated with their parents’ policies as a show of independence, but this can cost them 10-30 per cent in premium dollars.”

Basic coverages are really that—basic. In places like Ontario with multiple carriers, be cautious about what you’re opting for. “With supply chain issues [continuing to delay repair part deliveries, retain] adequate loss of use coverage [for a protracted repair visit],” says Arnold. “Purchase the maximum amount available. From the Accident Benefit side, having adequate medical and rehabilitation limits are important. I also increase the medical, rehab, and attendant care for both non-catastrophic and catastrophic coverage to the maximum available. For retirees and/or people living on their own, I also add Housekeeping and Home Maintenance for all injuries.”

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Keep in mind it’s almost impossible to keep a secret. That parking lot fender bender you opted to keep off the record? It could still be reported by the other party, or even a body shop giving you a quote. Even if there was no payout, you could still be facing increased premiums. “Many consumers wrongly assume that if they had “forgiveness” for a crash with their current carrier, it will transfer to a new carrier; this is not the case,” says Arnold. “With “superstar” ratings allowing 7, 8, 9, 10 and up to 20 years clean driving record ratings, a claim 10 years ago can affect premiums with some carriers. Consumers should not “jump the gun” and cancel their current policy before records are pulled and the quotation is confirmed.”

You have to have insurance. Shop around for the best rates, but make sure it’s on coverage that will be enough if you need to access it.

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