Shopping For Car Insurance: What’s Holding You Back?

While all motorists are required by law to have car insurance, most people couldn’t be bothered to shop around and make sure they’re getting the right coverage at the best price. If you’re anything like me, you might not have even changed insurance companies since you first started driving!

How do you know when it’s time to change car insurance providers? Many people are dissatisfied with their car insurance premiums, but surprisingly few are doing anything about it.

When it’s time to shop around for car insurance

Here’s a simple test: When you receive your annual renewal notice in the mail and discover your premiums have increased by 10% (or more) – don’t just grumble and file it away – it’s time to shop around.

Car Insurance

The average consumer can reduce the cost of their car insurance premiums just by shopping around every 1-2 years and getting new quotes. It’s easy to search car insurance quotes online through a rate comparison site.

Take some time to evaluate your own driving situation to see if anything has changed. For example, you might want to remove collision coverage on an older vehicle or increase the deductible to the max if you wouldn’t bother with a small claim. Maybe you’re a veteran and would like to use that to your advantage by getting cheaper insurance and even USAA roadside assistance, among other benefits.

How else can you save money on car insurance? Look at other discounts and see if they apply. Would you move your house insurance to take advantage of a multi-product discount? You might save 5-10% on your premiums just by bundling your home and auto insurance policies. It’s shocking how many people aren’t doing this!

Similarly, if you’ve purchased winter tires you may qualify for a discount. Or you might qualify for a group discount if you happen to work for a preferred employer group.

Instead of waiting until your renewal date comes up to check for car insurance rates, keep in mind that there are other opportunities to review your policy throughout the year.

Whether you’re getting married, buying a new car, adding a teenager to your policy, or moving, there are opportunities to examine your policy and check for discounts. Take advantage of these opportunities to make sure you are always getting the best rates and that you have appropriate coverage.

If you do decide that it’s time to move on from your current car insurance provider, make sure you have your new policy in place before cancelling your old policy – you don’t want any gaps in coverage.

Beware that most insurance companies charge penalties if you cancel your policy mid-year. Unless you’re getting a big discount to switch immediately it probably makes more sense to wait until your policy is up for renewal.

Final thoughts

Basic car insurance policies are standardized to some degree, however it’s still important to compare policies as the range of coverage may differ between providers. Some types of coverage – such as accident benefits coverage – are not mandatory in every province.

Is the coverage comparable on each quote you receive? What is the company’s procedure if you have an at-fault claim? Under what circumstances would your insurance not be renewed?

Make sure you compare apples-to-apples when it comes to different policies. Weigh the cost of premiums against the coverage provided. Your main objective should be to buy the right amount of coverage at an affordable price.

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  1. KC on April 18, 2016 at 6:47 am

    Well, my auto renewal insurance increased by 20% from last year even though nothing has changed for 4 years (including all sorts of discounts out there) so that resulted in a quick call to my insurance broker trying to find out what’s going on.

    Answer was “insurance company is moving to a personalized approach”, etc. So, I did do comparative shopping and it was going to cost me more than the insurance company that I’m with now which makes no sense. I later found out that one of the factors is the lienholder and the increased payouts so that resulted in higher accident benefits premium. So, if I paid my loan in full, I would save $100. Another factor was apparently, the higher number of accidents in the city coming from people who run red lights and reckless driving. That, unfortunately, is out of my control.

    In other words, I’m screwed. As soon as I’m getting married later this year, I’m calling them up to change my marital status to get cheaper premiums.

    This is still a good post regardless as many people don’t know about the discounts that you have listed.

  2. Eric from BC on May 4, 2016 at 1:04 pm

    I shopped around for my car insurance, but it was an impossibly difficult task here in British Columbia. Every broker deals with one Crown Corporation, and they all sell the same coverage at the same rate. It’s pretty tough to shop around when there is only one store!

    I traveled from my home in Kamloops to Edmonton, to get quotes on car insurance from different brokers. I got some more competitive quotes there, and proceeded to sign up with a broker. When I gave them my BC address, I was laughed out of the establishment and told that it’s illegal for them to sell auto insurance to people who don’t live in Alberta.

    While I agree that it’s a good idea to shop around for auto insurance, for some people, such as everyone who lives in British Columbia, it’s easier said than done.

    • boomer on May 5, 2016 at 10:19 am

      @Eric from BC: I moved from Alberta to BC and I was gobsmacked by the huge increase in car insurance rates here with the mandatory ICBC insurance. We have just the bare minimum allowed with them (basic coverage and $200,000 third party liability) and top up with a private insurer (in our case it’s Canadian Direct) at way less cost – and easier to deal with.

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