It is not unusual for a new driver to pay insurance premiums that are more costly than the actual value of the vehicle driven. This is a tough situation to be in, and I’d like to provide some insight into how you can get the best insurance value for your new driver.
If you are a new driver and are looking to purchase a vehicle, please be aware that the characteristics of each vehicle impact the insurance premiums. Factors such as the vehicle’s safety features, average cost of repairs and likelihood to be stolen will impact premiums. Do your homework before you purchase a new vehicle!
It is highly recommended that a new driver take a Ministry of Transportation approved driver training course. A driver training course can save you hundreds of dollars or roughly 10-20% of your car insurance. The standard within the industry is Young Drivers of Canada as its road safety and collision avoidance is what others are measured against. Take a course that teaches you something and that could save your life.
A few years ago, Intact Insurance introduced Telematics, which is a device that you easily install into your vehicle. The device is used to measure your driving habits and based on safe driving techniques, you can reduce your premiums by up to 25%. So, what is measured and how can my driving impact my premiums? Intact will provide you with online feedback in three areas; the time of day you drive, how hard you brake and how hard you accelerate. The measurement period is 1,000 kilometers. If you’re a safe driver and you do not accelerate, it’s unlikely you’ll need to brake hard. Also, if you don’t drive during peak (rush) hours, you will maximize your discount. Safe drivers clearly pay less than careless or aggressive drivers.
Another common way to reduce your auto premium is to increase your deductible. There are many combinations and types of coverage, and in most cases, there is a specific deductible. The higher your deductible, the lower your premium. Essentially, a deductible is a form of self-insurance.
All insurance companies will offer you a discount for additional or multiple policies. For example, by combining your auto insurance with your home, condo or tenant policy, you will receive another discount. Discounts for multiple vehicles on one policy can also reduce premiums. Always ask your Broker about discounts, there are many!
Finally, constantly educate yourself about insurance. Considering the high cost of insurance premiums, you need to understand what’s out there and how to maximize your purchase. Find the solution that best fits your budget and lifestyle. Contact your Broker and they will shop the marketplace for you.
Tim Currie
SVP McLean Hallmark Insurance Group
905-944-4118