Car insurance: Drive a better deal

How to trim your auto insurance costs

Gerri Goldsmith was near tears. After making her first insurance claim in 20 years of driving (for an accident that wasn’t her fault), she got the news that her premiums were going up. And the $500-a-year hike would leave Goldsmith’s family unable to afford to keep their only car, a 10-year-old Volvo. “I was flabbergasted,” says the Toronto mom of two.

If Goldsmith’s story sounds familiar, here’s some welcome news: Though it may feel like you’re at the mercy of your insurance company, by following these three easy steps, you have a great chance of finding more affordable insurance:

Shop around

Seems obvious, but not enough of us do it. Except for drivers in BC, Saskatchewan and Mani-toba, who must buy insurance from their provincial governments, every-one should get quotes from several companies, advises Bruce Cran, president of the Consumers’ Association of Canada.

Log on to a shopping site like kanetix.ca or insurancehotline.com, plug in a bit of information about your vehicle and driving history, and you’ll instantly receive a variety of quotes. You can use this information to cut a deal with your current insurer or switch to the company with the best offer. If you prefer, an insurance broker can shop around for you — it doesn’t cost you anything (go to the Insurance Brokers Association of Canada site, ibac.ca, and click on Consumers, then Find a Broker). While you’re at it, get a quote from your bank, since most now sell insurance.

The range of prices can be staggering. Take a hypothetical married couple in Calgary, both 35, with no tickets or at-fault accidents, driving a 2005 Chrysler minivan. For identical coverage and deductibles, the difference between the lowest and highest premiums is a whopping $774 a year, says kanetix.ca founder George Small.

Just be sure to do comparison shopping well before your current policy expires, as switching midway will usually cost you a penalty charge.
Dump what you don’t need

Often you can save money without switching insurance companies. As your vehicle ages and its value dwindles, think about getting rid of optional coverage, such as collision and comprehensive. You’ll pay less for insurance, but still be covered if you cause damage to another car, or injure yourself or someone else in an accident.

You could also consider raising your deductible — the amount you’ll contribute toward repairs if you have an accident. Bump yours from $500 to $1,000 and you could save as much as $150 a year, says Small. Of course, “it’s a matter of what you’ll be able to afford if you are in an accident.”

Bundle up

Most insurance companies offer a discount of up to 15 percent if you buy both your auto and home insurance from them. It never hurts to ask!

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