5 Reasons You’re Paying too Much for Car Insurance

When you review your monthly car expenses, are you frustrated by how much you’re paying for car insurance? One of these five reasons may be the reason you’re paying too much for your car insurance.

  1. You’re not shopping around for a better deal. If you’re letting your current insurance policy auto-renew every year, you could be spending more than necessary. Since insurance companies change their premiums often, the great deal you got when you signed up with your provider might not be the best offer on the market anymore. The only way you’ll know if you’re getting the best deal possible is if you shop around before letting your policy renew. Luckily, you can easily compare car insurance quotes online in minutes to find the best deal.
  1. You’re not taking advantage of discounts. There are many different discounts that can lower your premium, such as installing winter tires during the colder months or having your teen complete a driver’s education course. Some insurance providers offer Usage-Based Insurance (UBI) plans that allow drivers to track and report their habits – such as speed and distance travelled – in exchange for a discount on their plan. In some cases, drivers receive up to a 10 percent discount for signing up for this type of plan, and as much as a 30 percent discount at renewal if their data demonstrates good driving behaviour.

  1. You have more coverage than you need. Car insurance is mandatory, but the type of coverage you are required to have might vary depending on where you live. In general, you’ll be required to have liability insurance and accident benefits/bodily injury insurance. Any additional coverage you buy will depend on your needs.

For example, if you’re driving an older vehicle, the price of collision coverage might be higher than the amount of money you’d receive to replace your vehicle in the event of an accident. If that’s the case, you might consider scrapping your collision coverage, and saving that money to buy a new car.

  1. You’re on the wrong payment plan. Did you know that you could be eligible for a discount on your insurance if you pay for the full year upfront, rather than in monthly installments? If you have the money ready to pay all at once, you could save up to 9% on your premium. 

Another way to save money on your premium payment is to increase your deductible. This option works best if you have a solid emergency savings fund that will cover your higher deductible should you need to make a claim.

  1. You have demerit points on your driving record. Getting a traffic ticket doesn’t automatically mean you’ll see an increase in your insurance premium, but being found guilty of a traffic offense – whether it comes with demerit points or not – can raise your rates. You’re officially convicted of an offense when you pay your ticket, when you’ve contested your ticket and lost, or if you fail to pay your ticket in a certain timeframe. After that, offenses stay on your driving record for two years, but can raise your insurance rates for three. So what can you do about it? Obviously, adopting safe driving habits and staying out of trouble is your best option. If you’ve received a traffic ticket you think is unfair, contesting it in court can keep it off your record.

If you suspect you’re paying too much for car insurance for one or more of these reasons, contact your provider to review discounts, coverage options and payment plans. Before your insurance coverage comes up for renewal, be sure to compare quotes to find the best deal.

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