How to Save on Car Insurance
If you are a new Canadian resident, or you are waiting to receive your driver's licence for the first time, it is important to purchase an adequate car insurance policy so that you are always protected when you are behind the wheel. Young drivers, inexperienced drivers, and new residents may all fall into the broad definition of a first time driver in Canada. As a first time driver, you may be considered a high-risk driver because of the experience that you lack with the rules of the road and as an operator; being a higher risk translates into higher premiums. Read on and learn what you need to know about first time car insurance coverage options as well as ways to keep your premiums down.
As a newly licenced Canadian driver, it is important to take time out of your day to learn about the car insurance laws in the province where you are licenced. The laws for each province vary, and all provinces do require that drivers have a minimum amount of compulsory third-party liability coverage. Third-party liability car insurance is designed to protect your interests if you cause injuries or property damage to a third-party driver, passenger, or pedestrian while operating a motor vehicle.
While the minimum requirements can vary, most provinces require all drivers to carry at least $200,000 of coverage for claims of bodily injury, death, and property damage. Additional forms of coverage are available to protect your vehicle and these coverage options are referred to as collision and comprehensive. Note that full coverage, including comprehensive and collision will raise your premiums.
When you start to obtain quotes for first time auto insurance, you may be wondering why your rates are so high when you do not have violations or accidents that can be surcharged by the insurer. Auto insurance companies must have monies in reserve to cover potential claims filed throughout the year, and failing to collect adequate premiums from drivers based on risk can lead to a loss in profits. For example, auto insurers in Ontario have reported an average loss of $1 billion annually between 2008 and 2010, making it a must for the insurers to raise premiums for risky drivers.
Having no previous auto insurance or no experience behind the wheel is sometimes more risky to insurers than having a traffic violation. With the average first time driver in Ontario alone spending 5.3 percent of their disposable income on auto insurance, it is important to take action and attempt to lower your high premiums as a first time driver in Canada.
If you are lucky enough to have been licenced in another country, obtaining a Letter of Experience and a Driver Abstract can help you get credit for your experience. This may help lower your premium because you have a record the insurer can review. If you do not have this experience, you may want to take advantage of discounts that are available for young drivers who are college or university students, or for drivers who take voluntary driving courses. It is also important to meet with an agent to discuss your budget, so that you can select the coverage options you need and that you can also afford.
Auto insurance actuaries consider the risk factors when calculating auto insurance rates, and one of the risk factors is how much experience that a driver has. If you are a first time driver (no matter how skilled you may be) the car insurance company does not have a record to reference. Be sure to build a policy that protects you, and ask for discounts that you are eligible for so that you have the necessary coverage.