Do you know what factors affect your insurance premiums?
All car insurance premiums are based on risk. Insurance companies must predict how likely it is that a claim will be made, and how much it will cost the insurance company to pay out on it. The type of car you drive is one of the factors car insurance companies look at.
To determine the cost of insurance on the specific vehicle you drive, insurance companies use the Canadian Loss Experience Automobile Rating (CLEAR) program. Based on insurance claims data, CLEAR establishes the expected and actual claims loss experience for each make and model of vehicle.
The CLEAR system factors:
- A vehicle’s susceptibility to vandalism and theft.
- The age of the vehicle. Newer and more expensive vehicles cost more to replace, thus more to insure.
- The vehicle’s safety features. A vehicle with quality safety features reduces the severity of both bodily injury to you and damage to the vehicle when involved in an accident.
Check back for future Did You Know? segments covering other risk factors affecting your car insurance premium.