When It's Time to Change Your Car Insurance Coverage

By: Robb Engen on February 12, 2016

While all motorists are required by law to have car insurance, I find that most people can’t be bothered to shop around to make sure they’re getting the right coverage at the best price. If you’re anything like me, you probably haven’t even bothered to change insurance companies since you first started driving.

How do you know when it’s time to change your car insurance coverage? I hear from a lot of people who aren’t happy with their insurance rates, but surprisingly few do anything about it.

Evaluating your car insurance coverage

Here’s a simple test: open your mail. When you get your annual renewal notice in the mail and discover your premiums have increased by 10%, you’re not going to be very happy with your insurance provider, so it might be time to shop around.

The average consumer can reduce the cost of car insurance premiums just by shopping around every one to two years and getting new quotes. It’s easy to search car insurance coverage quotes online through a rate comparison site.

Take time to evaluate your own situation to see if anything has changed. For example, you might want to remove collision coverage on an older vehicle or increase the deductible if you wouldn’t bother making a small claim anyway.

You’ll also want to look at other discounts and see if they apply to your situation. Would you be willing to move your house insurance to take advantage of a multi-product discount? You might save money on your car insurance rates just by bundling your home and auto insurance policies. It’s shocking how many people aren’t doing this.

Similarly, if you’ve recently bought winter tires you may qualify for a discount. You might qualify for a group discount if you happen to work for a preferred employer group.

Instead of waiting until your renewal date comes up to check for insurance rates, keep in mind that there are other opportunities to review your policy throughout the year.

Whether you’re getting married, buying a new car, adding a teenager to your policy, or moving, there are opportunities to examine your policy and check for discounts. Take advantage of these to make sure you are always getting the best rates and that you have appropriate coverage.

If you do decide that it’s time to move on from your current car insurance provider, make sure you have your new policy in place before cancelling your old policy – you don’t want any gaps in coverage.

Beware that most insurance companies charge penalties if you cancel your policy mid-year. In that case, you might want to wait until your policy is up for renewal.

Final thoughts

Basic car insurance policies are standardized to some degree, but it's still important to compare policies as the range of coverage may differ between providers. Some types of coverage – such as accident benefits coverage – are not mandatory in every province.

Are the coverages comparable on each quote you receive? What is the company's practice if you have an at-fault claim? Under what circumstances would your insurance not be renewed?

Make sure you compare apples-to-apples when it comes to different policies. Weigh the cost of premiums against the coverage provided. Your main objective should be to buy the right amount of coverage at an affordable price.