How to buy and renew car insurance - Unhaggle Blog

Posted by | June 24, 2019 | Insurance, Tips | No Comments

Car insurance is a requirement across Canada. Whether you’re buying it for the first time or renewing with your current provider, it’s valuable knowing how it works to ensure you’re getting the best insurance policy for your needs.

What factors are used to determine insurance pricing?

An insurance provider determines an insurance rate based on a number of criteria, including relevant historical data. The factors that go into your car insurance premiums are the demographics of the driver (e.g. age, gender, location), the make and model of the vehicle, a driver’s driving history, the chosen levels of coverage, and any applicable discounts. Insurance companies use this data and review it against profit goals, bottom line objectives, and risk tolerance to provide you with a quote.


A driver under the age of twenty-five will typically pay more for insurance because they have no historical data about their driving behaviour. Without knowing the driver, the insurer turns to stereotypical data that says younger drivers take more risks and therefore should pay more. Also, if you live in an area with higher volumes of accidents, car insurance fraud and/or theft, you can expect to pay more.

The vehicle you drive

The same holds true with the make and model of the vehicle. Minivans are cheaper to insure because they’re often family vehicles where parents use safe driving techniques. A 2-door sports car, on the other hand, is more expensive to insure because they’re more costly to repair, replace, and the drivers themselves want to enjoy the car’s performance (i.e. driving fast).

Your driving history and activity

The longer you maintain a clean driving record, the cheaper your car insurance will be because you’re seen as less of a risk. It’s also important to know that the fewer kilometres you drive, the less you pay. So, if you can avoid the morning commute by taking transit or walking to work and only drive for errands such as groceries, your insurance will be cheaper.

Your chosen coverage

If you see yourself as less of a risk, depending on which province you live in, you can choose the coverage to suit your needs and budget. The minimum basic coverage will usually yield the cheapest car insurance, but puts the majority of the onus on you to pay for any damages as a result of an accident.

How to save money when buying car insurance

If you’re looking for ways to save on car insurance, without absorbing the majority of the risk, there are several ways to pay less.

Payment options

Increasing your deductible can save you money. A deductible is the portion of the claim you pay before your insurance company pays the rest. Increasing your deductible is a signal to your provider that you’ll take on more responsibility in the event of a claim and you likely won’t be submitting any minor claims. Also, if you make your payments annually, instead of monthly, there are less administrative costs and less chance of cancellation, so typically an insurance company will reward you for this. Finally, if you bundle your auto insurance policy with your home insurance, or add more than one vehicle to the policy, it shows loyalty to your provider  and makes you eligible for a discount (i.e. the more you insure, the better the price).


An insurance provider rewards you for lowering risk. If you make your car safer, your insurance costs may go down. For instance, adding winter tires can save you 3-5% on your insurance premium. Installing an anti-theft device can also help you save on car insurance as it acts as a theft deterrent. Adding a telematics device, or using an app that tracks your driving behaviour, will more insight to your provider and can save you money. However, if you modify your vehicle for speed or aesthetics, it will likely increase your car insurance.

Personal discounts

Depending on your insurer, you might be eligible for a discount if you are a college or university alumni, a union member, or a member of other professional designations. Safe driving history and loyalty to one insurer can also reduce your premiums too. Be sure to discuss all discount opportunities with an insurer before you finalize your policy.

Shop around and compare

All things being equal – demographics, driving history, vehicle make & model – each insurer will weigh each factor differently. An insurer reviews their books – how many claims they paid out, how they’re doing as a business, or how much future risk they can handle – in order to offer you a price. Shopping around and comparing can save you hundreds of dollars every year by going with the insurer that offers the best price at that time.

Renewing your insurance

While loyalty can result in cheaper premiums with one insurer, it’s essential to shop around for car insurance quotes when renewing. You want to make sure you’re paying fair market value, taking advantage of rate changes, and ensuring you’re getting the coverage you need for the price you want.

How the renewal process works

The renewal process is standard. You receive a new policy in the mail 30-60 days ahead of renewal. You have a chance to review it for any changes in coverage or pricing increases. If you’re in good standing, your policy and its coverage will auto-renew. However, the problem is it can create complacency. Without shopping around, you don’t know if you’re getting the best rate.

Why you shouldn’t just automatically renew

If you moved in the past year, it would usually result in a pricing change. For instance, on average Ontario car insurance quotes are more expensive than those currently available in Alberta. If you’ve moved to Alberta, you’ll want to take advantage of the price reduction. If you moved to Ontario, even though you’ll pay more, it’s vital to update your insurer. They trust you to provide accurate information. If you’ve misled them in any way, it’s possible they could deny a claim, or even cancel your policy due to misrepresentation.

If you get a new job, your insurer may not have a corporate discount setup, but another insurer could. Also, a new job may mean affect your commute – remember if you drive less, or no longer require a car for business, that equates to more savings. If you get married, you may need to add a secondary driver to your vehicle now. It’s worth investigating what switching providers could save you. It doesn’t mean you will switch, but there’s no sense in paying more money for the same product.

When to renew your insurance policy

While it’s possible to change insurance companies mid-policy, know that it could result in fines. There are several stipulations you’ll need to follow correctly to avoid any administrative fees as well. Changing insurance companies at your annual renewal date is easier because there are no penalties or fees to pay. It’s the best time to take advantage of any potential cost savings.

That said, if you shop online, and see a better price, call your insurer to inquire what costs you may incur. If the savings far outweigh the price of cancellation, it might be worth the extra savings.

In closing

Now armed with this knowledge, you can confidently buy insurance either by shopping online, calling a broker, or speaking to an agent for a specific provider. The benefit of comparison shopping online allows you to view average pricing and discount options from several providers in just a few minutes. If you’re more comfortable speaking to an expert you could connect with a broker directly, describe your needs, and given their knowledge of the market can receive unbiased advice and pricing from multiple providers. Some insurers even allow you to buy direct, and while they are experts of their own offerings, they are limited to only selling their own products. Happy shopping!

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