News & Resources

How to Break Down Your Auto Insurance Premium Costs

Feb. 26, 2019
3 mins
Older gentleman driving and happily chatting with his passenger

Auto insurance exists primarily to protect the assets of you and your family members, but also extends to anyone who has permission to drive your car. In the case of an accident, and dependent on the specific coverage you carry, the insurance company has an obligation to pay for bodily injury, damages to your vehicle, another party's vehicle or any other property that may have been damaged in the mishap.

Without insurance, minor accidents may not cripple you financially, but a major incident that involves injury to another party or significant physical damage may take a huge toll on your fiscal well-being. Medical or legal bills resulting from bodily injury or death of another person could easily wipe you out.

Mandatory coverage requirements differ between provinces and minimum third-party liability limits of $200,000 must be maintained in Alberta to meet legal standards. Optional coverage such as collision and comprehensive need not be purchased but always align coverage with personal financial situations.

What Influences Your Premium

Receiving that insurance package each year may raise your eyebrows when you review the cost. So it's important to know which variables contribute to your Alberta auto insurance premium. A large percentage of cost results from the age of drivers on the policy. Do you have a newly licensed driver in the household or do all operators have years of driving experience?

The car you drive factors into the premium equation also. The Canadian Loss Experience Auto Rating (CLEAR) takes into account the safety ratings of cars and the expense to repair each model when damage occurs. Newer vehicles with advanced technology cost more to fix than older models.

Safe drivers save more money on auto insurance than operators who have had claims or traffic tickets. The risk to an insurance company decreases when applicants have no blemishes on their driving records as opposed to multiple accidents and/or safety violations.

How to Get the Least Expensive Premium

There's a classic tune that suggests "You Better Shop Around"— great advice when seeking to lower your car insurance premium. Numerous choice among carriers exists in the Canadian market and don't assume that bigger is necessarily better. Smaller, regional auto insurers may understand local markets better than large, national insurers and as such may offer lower cost for identical coverage.

Take advantage of the following discounts that shave considerable dollars from your bill:

  • Multi-car
  • Multi-policy
  • Safe driver
  • Good student
  • Anti-theft
  • Safety restraints and airbag
  • Loyalty
  • Paperless billing

Also, consider higher deductibles on collision or comprehensive coverage when putting your policy together. By assuming greater out-of-pocket costs in the event of a claim, you will realize lower premium expenses when applying for or renewing a policy. Often, carriers will provide additional savings to policyholders who pay annual premiums in full versus monthly installments

The Final Word

Simplify your life by searching online for the best Alberta auto insurance deals. Rates.ca offers consumers a one-stop shopping option that provides access to more than 30 Canadian auto insurers. Quotes are returned instantly and from those results, you can choose the best coverage that suits your needs and your budget.

RATESDOTCA Team

The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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