Insurance companies tend to not compete with other insurance providers on price. It’s due to the fact that pricing insurance is really complex and the fact that insurance companies need to make sure they have a healthy reserve in order to meet their claims obligations in the future. They need to have a lot of money to stash away, so they’ll push up premiums — just in case.
Car insurance companies are also really conservative institutions and they make sure they’re prepared for every scenario that could play out.
They look at your driving and insurance history, the number of claims filed in your postal code, the car you drive, and even your age and gender.
Insurance companies appear interchangeable, but they’re not. Some insurance companies are more likely to favour you than others. And by favour, we mean more likely to offer you a low rate.
Here’s why. Insurance companies are all hedged differently. Some have had to pay out a lot of claims recently, pushing up their average annual premium. The more willing they are to have you as a customer, the lower the rate they’ll offer you. Makes choosing a car insurance company simpler, doesn’t it?
Some car insurance companies exist completely online and claim to pass on the savings from not having a traditional sales force. So, yes, technically, you may be getting slightly cheaper insurance, but it has nothing to do with how it actually costs to insure you.
Plus, do you really want cheap car insurance? Probably not. You want the right amount of protection at a price you can manage (never miss a payment — that’s a surefire way to get the insurance company to jack up your premium at renewal).
Here’s the difference: there are varying levels of coverage you can buy. Edmonton drivers need to have third-party liability insurance to operate a car legally, but you don’t have to buy coverage that reimburses you for the cost of your car should you need to replace or repair it.
Just buying the legal minimum amount of auto insurance will save you money. Sometimes, it’s worth increasing your liability and accident benefits coverage. And on other occasions, it’s good to have collision insurance. Like, for instance, if you buy a same-year model car that you couldn’t possibly pay out of pocket to replace.
An insurance broker can help you figure out how much insurance you really need.