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Automobiles: What Affects Car Insurance Rates

What affects your auto insurance rate?

• Age of the driver: Drivers under 25 years of age pay more insurance than older drivers. Statistically, younger drivers get into more accidents and receive more traffic tickets. In some provinces, young male drivers will also pay more than young female drivers, while in other provinces the under-25 insurance rates are the same until you have your first accident.
  
• Driver's record Your insurance premium goes up whenever you get into an accident or receive a traffic ticket. FYI: insurance companies may access the provincial driving record databases, so you may get an insurance increase for a ticket you received, even though you did not report it to your insurer.
  
• Where you live The frequency of car theft, vandalism and medical costs in the area (province, city, even neighbourhood) you live affects your insurance rate. The "car density" also impacts rates. This is one reason why rates in Calgary, are higher than in Saskatchewan, which has the same number of cars, but is a much larger area).
  
• Make and model of car A sports car costs more to insure than a station wagon. Statistically, a driver of a sports car gets more traffic tickets and is involved in more accidents. FYI: cars that are red statistically get more tickets, regardless of driver's age or make of car.
  

Reducing your insurance rate

The best way to reduce your insurance premiums is by being a safe driver and avoiding accidents and traffic tickets. You can also take a driver's training course (especially if you are under 25). You can get a better rate if you happen to own a car that is cheap to insure. This can happen if the car model suffers little damage in an accident, if it's not popular with auto thieves, and/or if other drivers of that car are less likely to get into accidents.

You can also lower your premium by choosing a policy that has a larger deductible. This is when you pay a specific amount towards the cost of car repairs when you have an accident. The higher your deductible, the less likely the insurance company will pay amounts in a specific incident, resulting in lower risk (for them) and lower premiums. You must balance a higher deductible with the requirement to have that amount available should an accident or theft occur. Also, keep in mind the deductible applies to each incident. If you have a $1,000 deductible for theft and your car is broken into or vandalized two nights in a row, you may need to pay $2,000 toward the total damages to your vehicle and contents.