Two topics that Ontario residents love/hate to talk about are:

 

1. Real Estate Market
2. Auto Insurance Rates

 

We already know how the real estate market looks. It’s ridiculous.

 

But how about the insurance market?

 

It’s also ridiculous.

 

Any resident of Ontario already knows that auto insurance in this province is becoming a little out of touch with reality.

 

According to Lowest Rates, the average car insurance rate in Ontario is $1,445 per year. About $120 per month.

 

That doesn’t seem too bad… Why is everyone complaining?

 

Well if you decide to live in lovely Toronto or any neighboring boroughs known as the Greater Toronto Areas, you can expect to pay more than double in some cases!

 

This is also assuming you have a clean record and are a 6 star driver (licensed and insured for at least 6 years with no tickets, accidents of cancellations).

 

 

Have an accident on your record? You better hope you bought accident forgiveness.

 

So what can be done about these premiums? Is there hope?

 

You bet! We have put together 5 insider tips on how you can lower your auto insurance rates in Ontario.

 

Lets get started.

 

5 Insider Tips to Lower your Auto Insurance Rates in Ontario

 

 

#5 Make a tenants policy

 

In most cases, the largest discount an insurance company offers is the Multi-line Discount.

 

Insurance companies want to have as much business from you as possible.

 

This makes you a more stable client and less likely to become a “hopper”.

 

Because of that, they are willing to offer solid discounts of 10% -20% if you bundle up your auto with your home insurance.

 

But what if you don’t own a house or condo? What if you are renting?

 

You purchase a tenant insurance policy! Also known as a contents policy.

 

These policies can be very cheap ($20 – $40 per month) and in many cases can save you $50+ per month on the auto side.

 

The added benefit is you begin building your “property insurance record”.

 

Just like how auto insurance companies charge higher premiums for those who have no prior driving record, they do for property insurance as well.

 

Having a tenants insurance policy solves that. When you purchase your first home or condo, you now have a few years of clean property insurance under your belt.

 

#4 Stay away from small cars

 

Take a guess on what the most expensive cars to insure are.

 

Porsche 911? No.

 

Lotus Elise? Nope.

 

If you were thinking Honda Civic and Toyota Corolla, you were right!

 

All things being equal, these two cars are the most expensive cars to insure.

 

 

Why?

 

Insurance companies have brilliant people known as actuaries who use prior years statistics and many other metrics to create current rates.

 

Honda Civic and Toyota Corolla drivers seem to be getting into the most accidents, and since the cars are small, they usually result in large damages.

 

If you want to lower your insurance and you have the option to pick almost any car, try going for the larger models or SUVs.

 

Perhaps a Honda Accord rather than the Civic.

 

#3 Get accident forgiveness

 

This is more of a protective decision, it won’t reduce your current rate, it may actually increase it by a few dollars per month.

 

But it is the single most valuable endorsement you can purchase.

 

Accidents will stay on your record for six years and the insurance companies will increase your rates for those six years.

 

In some cases, with an at-fault accident on your record, your premium may increase by 30% or more!

 

Accident forgiveness, as the name states, will forgive your first at-fault accident for as long as you remain with that company.

 

If you get a second accident, you will be rated for the second one.

 

 

Here is the issue: You need to qualify to purchase the accident waiver.

 

In order to qualify, you are required to hold your Ontario license for at least 6 years with a clean record.

 

There is only one company, as far as we are aware, which offers it without having to qualify, that company is Travelers Canada.

 

They only deal through insurance brokers which means you need to call your local broker and have them create a quote for you.

 

 #2 Purchase liability only coverage

 

This is not something Downtown Money recommends. If your budget allows for it, try to purchase full coverage. Insurance is not something to save a few dollars on.

 

However, if your rate is no longer affordable, there are cases where reducing coverage to just liability might make sense.

 

If your car is over 10 years old and is not a luxury vehicle, Liability Only insurance can save you a few hundred dollars a year.

 

Your car is still covered both ways if someone else hits you and it is deemed not at fault.

 

If you hit someone or another object (known as a single-vehicle collision) than you will have to assume all costs on your car.

 

Your liability to third parties will still be covered up to your policy limits (usually $1,000,000).

 

#1 Shop around

 

You probably already saw that one coming but it is the truth.

 

If you really care about saving the maximum amount of money on your auto insurance premiums, you need to shop around.

 

This doesn’t have to be on a yearly basis. Once every three years is recommended.

 

After all, who has the time to shop every year?

 

 

There are many online quoting tools that you can use to get an idea. However, these tools are not always completely accurate so do not assume the rate presented will be the exact rate you get.

 

Make sure that you tell the full truth on your application.

 

If you say you are a clean driver, they will take your word for it at first. They may even issue the policy.

 

However, a month later, they will pull out your abstract and see everything on it.

 

If they see that you “forgot” to mention something, they can cancel your policy for non-disclosure.

 

With a ND on your record, you can forget all the tips above, your insurance rate will be a second mortgage until that comes off.

 

The most common way to shop around is by calling a local insurance broker. They have the industry experience and knowledge and will be able to get you a good rate with the best coverage.

 

We hope that these 5 insider tips to lower your auto Insurance can help you save a couple bucks at the end of your month. 

 

We also hope to see Ontario’s auto insurance rates to decrease at some point in the future.