It's illegal to drive in Canada without auto insurance. Beyond the legal minimum, how much and what kind of coverage you will need is debatable, and should be considered on a caseby-case basis, ideally every year around the time of your renewal. Not having enough insurance coverage, or not having the right kind of coverage, can leave you with a huge repair bill in the event of an accident or total loss. If a person(s) is injured or killed, then you could also be facing legal action, and that's when things start to get really expensive.
We asked some local insurance experts to help us cut through the legalities and try to understand the most important aspects surrounding automobile insurance.
“For starters, auto insurance rates are based on things like a driver's record, the vehicle they drive, where they live and claims frequency,” says John Bordignon, director of media relations for State Farm Canada. “In terms of specific vehicles, those that are less expensive, cheapest to repair, have the best claims history and are generally less powerful are the most economical to insure.”
But it's your driving record that is the most important factor when it comes to establishing rates.
“Most of the factors that can keep your auto insurance rates down are within your control,” says Bordignon. “No tickets or accidents are ideal, as are adhering to provincial graduated licensing laws and the successful completion of a certified driver training course.”
“As long as you don't have an abundance of tickets, your rating is determined by how long it's been since you've had an at-fault accident,” elaborates Jamie Maudsley, a fulltime broker with Bill Blaney Insurance Brokers in Dorchester, Ontario. Plus the more you drive, the more at risk you are of being in a collision, so that is also a factor, he explains.
Rates are also affected by the optional coverages an insurer provides, Bordignon states. “Deductibles, comprehensive, collision and rental coverage are all choices a person can make that will affect the amount of premium they pay.”
Some insurers even increase premiums for cars that are more susceptible to damage, occupant injury or theft, and lower rates for those that fare better than the norm.
Maudsley helps put this into perspective. “Each vehicle has an accident benefit rating and, as a rule of thumb, there is a much better chance of getting hurt in an accident while driving a small car compared to a full-size