7 Shocking Facts About Auto Insurance

7 Shocking Facts About Auto Insurance

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Most people assume they are reasonably well-informed about car insurance Ontario, especially in the context of their own needs. They pay their premiums on time; they maintain coverage limits that reflect their circumstances; and they are familiar with the process of filing a claim. What may come as a surprise to people is that their coverages and the rates could be affected by numerous details.

Intrigued? Below, we’ll share seven items about car insurance you may find startling. The following details have caught countless consumers by surprise.

#1 – The Type Of Vehicle You Drive Affects Your Rates

This is an area that is misunderstood by a lot of consumers. The colour of your car does not matter. Neither does having a fin installed on the back. What matters is the claims and safety record associated with a particular make, model, and year.

If insurance companies have paid a high number of claims to policyholders who drive the same vehicle you drive, your rates will likely be higher. The opposite is also true. Cars that show fewer claims, and pose an impressive safety record, will be less expensive to insure (other factors remaining equal).

#2 – You Might Be Wasting Money On Coverage

Some coverages are mandatory while others are optional. Collision and comprehensive coverages fall into the latter category. For newer vehicles, both are recommended since extensive damage or loss due to theft pose substantial repair or replacement costs. For older vehicles, however, collision and comprehensive are more difficult to justify. The amount you’ll pay to carry these coverages will likely exceed the value they offer.

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If your car is old, and its market value is low, consider dropping both coverages. Your auto insurance rates will also drop.

#3 – Increasing Your Deductible Lowers Your Premiums

This should not come as a surprise. However, many people carry deductibles that are too low, and thus pay higher rates than necessary. Given the minimal likelihood of an accident, it’s a good idea to raise your deductibles in order to lower your premiums.

One important side note: make sure you set aside funds to pay the deductible in the event you need to file a claim.

#4 – Your Coverage Can Be Cancelled For Late Payments

Don’t expect your auto insurer to forgive habitual late payments. Many insurance companies will simply cancel your policy, thus eliminating your coverage. This can make securing coverage elsewhere difficult since other companies view cancellation warily.

If your insurer cancels your policy due to late payments, they may be willing to reinstate coverage. However, you might be required to pay your annual premiums upfront. A better solution is to make timely payments in the first place.

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#5 – New Vehicles Often Cost Less To Insure

This surprises a lot of people, but makes sense when you consider the factors involved with calculating a person’s rates. Among these factors are the security features installed on the vehicle, the age of the person behind the wheel, and of course, that person’s driving record.

First, older cars are often driven by younger people, who have a sparser driving history than their older counterparts. This is the reason younger drivers usually pay higher premiums. Second, such vehicles typically lack high-end security components, which increases the risk of theft. While they cost less to replace, don’t assume rates are lower by default.

#6 – Your Assets May Be At Risk

You may think your house and financial assets are protected as a result of having auto insurance coverage. But have you reviewed your policy lately to make certain this is the case? What would happen if you were involved in an at-fault accident that causes major property damage and injuries? If the cost of both exceed your coverage limits, you’ll be responsible for paying them. Review your policy in light of your financial circumstances.

#7 – Rates Vary Dramatically From Company To Company

The rate offered at one insurer may be substantially less than the rate offered by another for identical coverages and deductibles. This is a detail that surprises many people who assume premiums are the same at every insurance company. In reality, they vary. The only way to know whether you’re enjoying the lowest rates possible for your chosen coverages is to compare quotes from several insurers side by side.

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Auto insurance is not one of the most exciting products to be purchased.But it’s worthwhile to spend a few minutes making certain you’re well-informed about your policy, coverages, and rates.

Looking for car insurance Ontario is easier than you think. Saving money on your monthly insurance costs means you can spend your money on other things.

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