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How to Buy Car Insurance

December 14, 2010

Buying insurance doesn’t have to be challenging. If you’re looking for insurance for your vehicle, these simple tips will help you feel comfortable as you go through the purchasing process, whether you’re buying car insurance in Alberta, Ontario, or anywhere else in Canada.

How to get car insurance in 6 easy steps

  1. Shop Around. Coverage levels and options vary amongst the many automotive insurance providers in today’s market. Each customer’s unique situation will merit different premiums. Buying the first policy that’s quoted to you might not be in your best interest in this competitive marketplace. Even using just one broker when you’re looking for insurance quotes likely isn’t going to give you the widest variety of options, as most insurance brokers only offer policies from a select few insurers. Online car insurance quote engines like InsuranceHotline.com make shopping around quick and easy for any driver.
  2. Compare Apples to Apples. If one insurance company offers $2 million of liability coverage, then make sure you’re looking at quotes for the same amount of coverage from other insurance companies when you’re making your decisions. This is the only way to get an accurate comparison. When you compare insurance quotes, don’t just take the premiums into consideration. Look at the coverage and the provider to make sure that you’re seeing the full picture.
  3. Educate Yourself. You need to do some research about the insurance company offering you the policy. Make sure that they are reputable and have solid financial backing. They should also offer a 24/7 claims number in case you’re involved in an accident or need to file a claim after regular business hours.
  4. Understand How Premiums Are Calculated. Insurance premiums are generally different for every driver, on every vehicle. There are so many influential factors that insurance companies must take into consideration when they calculate premiums. Firstly, they look at the driver. This includes the individual’s driving record, age, gender, insurance history, and years of driving experience. Then, the insurer takes into account the vehicle, looking at the year, make and model of car. Some vehicles cost more to repair, some types are stolen more frequently, and some are statistically involved in more accidents. All of these factors help to determine your premiums. Finally, your insurer will review where you live, (insurance in major urban areas is generally more expensive than insurance in rural areas), why you drive your car, (business, life or pleasure) and how often you are on the road. All of these factors contribute to the probability that you might have an accident or be a victim of theft and need to make a claim, and therefore cause a difference in your premiums.
  5. Determine the Right Coverage for You. Not every driver requires the same coverage. A vehicle that is being financed or leased requires full coverage, including liability, collision, and comprehensive insurance. Lien holders (i.e. finance companies, banks, etc) require assurance that they will be repaid for the money they loan out – regardless of what happens to the vehicle. In Canada, the only coverage that is legally required on every vehicle is liability – to protect the general public from injury against the driver of a vehicle. In some cases, especially with low value cars (including older, high mileage, or poorly maintained vehicles), collision or comprehensive coverage may be an expensive insurance cost that will not pay off. When the value of the repairs in the case of a claim exceeds the value of the insured vehicle, than the insurance company is entitled to pay out the value of the vehicle to the owner, instead of the repair costs. Declining collision and/or comprehensive coverage can significantly reduce your premiums, and is something that should be considered on lower value vehicles.
  6. Ask About Discounts. Car insurance can be costly, depending on the person and vehicle being insured. But there are many ways to help reduce the premiums that you pay. Insurance companies offer discounts to their clients that can significantly lower rates. Some of the discounts that you might be eligible for include: seniors rates; claim-free discounts (if you’ve been claim free for the last 3 years consecutively), multi-product discounts (if you have more than one insurance product held with the same insurance provider), and affiliation discounts (either paid, i.e. CAA, or professional, i.e. union). Ask your insurance agent which discounts are available to you.

    Buying insurance may seem like a daunting task, but being informed and asking your insurance broker the right questions will help you get the coverage you need. The first step should always help you to find the lowest rate, and getting quotes online is a quick and easy way to get cheap car insurance premiums.