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8 Mistakes That Can Cost You on Car Insurance

April 26, 2012

The cost of car insurance is a major expense for most people, and rising rates often seem unavoidable. But an increase in your car insurance premium can sometimes be avoided. Often, simple errors lead to over-paying for insurance. These eight mistakes are the quickest way to see higher premiums; keep your rates low by keeping them in mind.

Earning Yourself a Traffic Ticket

Tickets are one of the most common reasons that insurance rates go up. Many different traffic violations can be responsible for an increase. Speeding, running right lights, and careless driving are all violations that result in insurance rates that are higher. It takes three years before you will stop paying extra for that ticket. The smartest way to avoid this is to simply follow the rules of the road at all times.

An At-fault Accident

Accidents are just that; something we didn’t expect to happen that happens because of a simply error in judgment. Most accidents are caused by a driver who is either failing to obey traffic laws or simply not paying attention; this makes them for the most part avoidable. What isn’t avoidable is an increase in your insurance rates if you are found at fault in an accident, unless you happen to have accident forgiveness. Even then, it only applies to your first accident, and there are often other limitations. A mistake that leads to an accident is often a mistake that leads to higher premiums as well. Drive safe, be cautious, and stick to the rules to avoid this costly error.

Failure to Shop for Rates Before You Buy a New Car

People often find themselves shocked by the cost of insurance on their new car, but there’s a way to avoid that. Every car comes with a different insurance rating, and some are more pricey than others to insure. When you’re considering options, get car insurance quotes on each possibility before you make a buying decision. If you don’t, it could be a mistake that results in an insurance increase.

Failure to Shop Around at Regular Intervals

Shopping around for car insurance should be something on your to-do list on a regular basis; even yearly. Many people avoid it because they believe it’s a hassle, or think they can’t get a better rate. This is one expensive mistake. People who take the time to shop around almost always pay less; and with internet quoting it’s easier than ever.

Not Reviewing Your Policy at Renewal

Things change, and insurance companies don’t always catch them. You could be missing a discount you deserve, or have a ticket that should have fallen off your record. If you don’t look over your renewal paperwork when it comes in, you could be overpaying. Don’t make the mistake of complacency – look out for yourself and lower rates.

Failing to Take Advantage of Multi-Policy Discounts

What do your home, life, and auto insurance have to do with each other? Well, if you insure them all in the same place, it could be quite a lot – of savings that is. Most insurance companies offer a multi-policy discount. If you don’t have all of your policies in the same place, you could be missing out on some big savings on all of your policies, including your auto insurance.

Not Being Prepared for a New Driver

Inexperienced drivers are expensive to insure; there’s no way around that. But there are ways to reduce the costs, and being prepared ahead of time can save you money right from the start. Before your young driver takes that test, make sure you know about any discounts available such as Good Student or Driver Ed, and get everything you need together. Also, be certain to check on rates for any car you’re considering buying for a new driver; some are cheaper to insure that others. The cost of not being ready for that new driver will be higher rates.

Keeping Secrets from Your Insurance Company

It might save you some money in the short-term to keep quiet about things like a new driver or not mention a ticket when you shop for quotes. But in the long run, it could cost you even more. Insurance may decide to back-charge for the new driver, or could completely non-renew you, leaving you to shop for new insurance with a not-so-good track record. When you’re honest from the start, you can shop around for the best rate and get some help finding it. Odds are good they’re going to find out anyway, so in this case honesty is the best policy.

Keep your rates as affordable as possible by being careful to avoid these pricey errors. Remember that the very best way to keep your insurance premiums low is to be a safe driver; and shopping around is always a good idea when in doubt.

  • Ray

    Isurance companies are crooks!!!

  • Ray

    I meant Insurance Companies are crooks!!!

  • boris

    the car insurance industry is a joke are all the same just like OPEC if you switch over to another you will only save pennies on the dollar…..we are all screwed… so suck it up and pay and pay…the responsible people keep the losers driving that you well meet some day!

  • warren

    i shop around every year forty six spotless driving years ,there is clearly price fixing

  • AJ

    Wow. Everyone is just hating on the insurance companies. Does everyone forget that insurance is just a pool of money that everyone puts their premiums into? I wouldn’t want to see my hard earned money to some smuck who is trying to defraud the comany and I most certainly wouldn’t want my insurance company to go bankrupt and not pay for my claim. EVERYTHING is more expensive these days. I agree with shopping around but don’t do it too often. Some insurance companies give discounts if you are loyal to your previous insurance company or insurance broker for at least a certain amount of time. If you must shop, give your insurance broker the first opportunity to look around. That is what they are there for.

  • Wald

    If insurance companies are not crooks, how come rates in GTA are much higher than in other large cities?

  • daniel

    The main reason is the government conspires with big companies to rip off working people.

    On one hand, the government makes it compulsory to to buy insurance;

    On the other, they give the insurance companies a free hand to steal.

  • Kelvin

    If you think the GTA’s insurance rates are bad, try living (more specifically) in Brampton! I’m telling you straight up, insurance companies are the biggest “legal” thief in Canada!

  • Nick – InsuranceHotline.com

    Thanks for all of your comments! Shopping around for anything never hurts. It only takes 10 minutes to get an insurance quote on our site and you could save money! You always have the option of speaking with your insurance professional as well to see what they can offer you.

  • Dave

    Since all the insurance companies have been given a license to steal from us in Ontario, and more specifically the GTA, shopping around has been a waste of my time. I’ve tried it I know. What know one will give me a concrete answer on is why my rates have gone up 50% in four years with no tickets or accidents on my record. Are the various governments trying to push us out of our cars with lousy transit as an alternative?

  • Khan. I

    I like to know why car insurence is double in Ontario compare to Qubec.
    Bob Rae is responsible for the auto insurence mess and sky high rates in Ontario. No fault auto insurence is the biggest rip off and a fraud.

  • alex

    Insurancehotline.com are another example of CROOKS
    Try and shop there!!

  • Anonymous

    My husband was in an accident a couple of years ago. The other driver was in his 20′s, ran a red light and broadsided my husband’s car, had no insurance and was driving without a valid license. A court date was set and then postponed several times by the other driver’s lawyer (we don’t know why). We it finally went to court the judge dismissed the charges because too much time had past. The police officer who had investigated told us he sees this so often it’s commonplace. Doesn’t pay to play by the rules.

  • J. Ashmore

    My husband was in an accident a couple of years ago. The other driver was in his 20′s, ran a red light and broadsided my husband’s car, had no insurance and was driving without a valid license. A court date was set and then postponed several times by the other driver’s lawyer (we don’t know why). We it finally went to court the judge dismissed the charges because too much time had past. The police officer who had investigated told us he sees this so often it’s commonplace. Doesn’t pay to play by the rules.

  • Beth

    i agree with the majority of comments—–we are being held hostage because the insurance industry knows that the poor working man will do anything to hang on to his car—–there are so many of us, that the powers that be don’t care if some of us fall by the wayside!

  • Randy Montgomery

    Not sure that I would go so far as to say all insurance are crooks, but gov’ts certainly give them a monopoly to keep taking more of our momey. I was told by my broker that my premiums had decreased. I asked them to give me the cost to keep the same coverage that I had the previous year and when they did…….. it was going to cost me a lot more. McGuinty has allowed insurance companies to gut our coverage and the premiums are still going up. We should have the option of getting a gov’t run insurance that would not need to make a profit, just enough to cover costs but I couldn’t trust the present gov’t in ON to do this, just look how screwed up things are here now with everything else!!

  • Nick – InsuranceHotline.com

    Thanks for your comment. In Canada each insurance company has different rules and rates for the same driving profile. Insurance companies base their rates on the amount of claims that they pay. You are correct in that your driving history (tickets & claims) are available for insurance companies to use, but that does not mean that you will pay the same with each insurance company. We have had many consumers contact us to let us know that they have in fact, saved hundreds of dollars by using our site to shop around.

  • Insurance Broker

    What many fail to recognize is that rates are higher in the GTA because we have a denser population. As we continue to grow with new immigrants coming to Canada and a younger driving population, both without Canadian driving experience, there will be more claims/accidents, thus resulting in higher premiums. It does pay to have your broker shop around and review with you on a regular basis.

  • harv-i

    There are some instances where it pays not to be honest when dealing with auto insurance “specialists”. My daughter let it be known to her insurance company that she received a ticket for a burned out headlight. The agent immediately placed it on her record as an “incident” that would remain on her license for a total of 3 years causing her insurance rate to go up during this time. Seeing as this is a “non-moving” violation, the ticket would not have shown up on my daughter’s driving record and the insurance company would not have found out about it had my daughter not confessed.
    It’s no wonder some people are reluctant to disclose info to insurance companies. These companies will screw you over if you aren’t careful about what you say.