Three and a half years ago I was in a car accident which changed my life. When an accident like this happens to you, suddenly you can see the value of car insurance. So many of us resent paying car insurance premiums, thinking that we’ll never use it but the reality is we don’t know when an accident will happen. I certainly didn’t think I’d EVER be involved in a serious one after 20 years of driving.
Where payments go and how claims are paid out
Each person who pays car insurance premiums are actually putting the money into a pool. This is the money which is used to assist folks who have contributed with costs associated with a claim.
How Car Insurance Premiums are Calculated
The premium you pay for car insurance is calculated based upon your unique situation and the chances that you’ll actually make a claim. If you fall into a category where you’re unlikely to ever make a claim you pay less.
Tips to Help Control the Cost of Auto Insurance
- Dropping collision coverage on an older car
- Getting package deals for insuring your car and home, or more than one car, with the same insurance company
- Installing an approved theft deterrent system in your vehicle
- Buying a car with a lower–‐cost insurance rating
Considerations Before You Insure Your Car
- Where you live – Collisions and auto theft are more likely in urban areas, which may affect your premium.
- What car you drive – Your car’s make, model, year, value and potential repair costs are associated with risk factors. Your insurance company may consider the CLEAR system to rate your car.
- What you use your car for – The more you drive, the higher your collision risk. Your insurance company will want to know if you drive often or for long distances.
- Your driving record – A long, collision–‐free driving history can help you qualify for competitive insurance rates.
- Your driver profile – Depending on your province, the claims history of the group to which you belong as a driver – for example, drivers of the same age and driving experience – may be factored into your rate.
- Your premium may be impacted by how often your group makes claims.
- Your coverage (and endorsements)The more comprehensive your coverage, the higher your premium may be.
- The listed drivers of your vehicle
I cannot stress how important it is to have your car insurance up to date. As a person who has had the unfortunate opportunity to see its benefits up close and personal I assure you I would have been lost without it. I know it’s not a cushy feeling to be paying for something you haven’t used…but chalk it up to peace of mind and hope you’ll never need it. By doing a bit of research before you purchase your car or insurance you can save yourself some costs on premiums.
To learn more, head over to the IBC website where you’ll find everything you need to know.
Isn’t your peace of mind worth it?
Disclosure: Although this post has been generously been sponsored by IBC, the opinions and language are all my own, and in no way do they reflect Insurance Bureau of Canada.
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