7 Factors That Impact Your Auto Insurance Rates

By: Tom Drake on February 23, 2016

As Canadians, we are required to purchase auto insurance. Each province requires that you insure your car, although the minimum requirements might be different. Since you need to pay premiums, it's a good idea to understand what impacts your auto insurance rates.

Here are some of the factors that influence how much you pay for insurance:

1. At-fault accidents

One of the biggest factors impacting your auto insurance rates is the number of at-fault accidents that you have had in the past six years. When you have experienced these accidents, it appears that you are a greater risk in the future and that the company will have to pay out more if you have another accident. Work on defensive driving in order to reduce the chances of being considered at-fault in a collision.

2. Driving convictions

Other driving convictions can also raise your auto insurance rates. You might have to pay a fine for certain driving convictions, but also the more convictions you have, the greater the risk for at-fault accidents later on. If you want lower rates, try to avoid driving convictions. A driving licence suspension can also result in higher rates.

3. Type of coverage you choose

Your coverage also matters when it comes to your premiums. The higher your coverage amount, the greater your premium. You can also expect to pay more if you have a lower deductible. If you want a break on price, you can choose a higher deductible.

4. Where you live

Location makes a big difference in your auto insurance rates. When you live in an urban area, you are expected to pay more for insurance because there is a greater chance that you will get in an accident. Also, you have a greater chance of having your car broken into or stolen when you live in an urban area.

5. Type of vehicle

The kind of car you drive matters when it comes to your insurance premiums. A sports car is likely to cost more, not only because it's a more expensive car, but also because of the way insurers evaluate the types of cars that are more likely to get in a wreck. The way you use your car can also matter, including how many miles you drive it each year.

6. Driver experience

Don't forget about driver experience when it comes to your auto insurance premiums. If you are under 25, you will probably pay a higher rate. The number of years that you have had your licence can also affect your rates. If you have a teenager driving your car, you can expect to see a boost insurance rates because of their youth and inexperience.

7. Discounts

Don't forget about discounts that can reduce your auto insurance premiums. In Ontario, winter tires come with discounts. You can also ask for discounts if you have multiple lines of insurance with one company, if you have a good driving record, or even if you do well in school. Check to see what discounts are available.

Once you know what impacts your premiums, you can make better choices and be prepared to get the best deal possible on your insurance. 

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