5 factors that impact the cost of automobile insurance premiums
Automobile insurance is an unavoidable expense that must be considered in one’s overall vehicle-related costs. In Québec, drivers are protected by two types of insurance:
- The public automobile insurance plan , which protects all Quebecers in the event of injury or death as a result of a traffic accident.
- Private insurance plans, which compensate for material damage. In Québec, the owner of a motor vehicle operated on the province’s roads must carry liability insurance that covers property damage.
Many factors can impact the cost of your insurance premiums. Here are a few of them:
- Age and gender. Insurance premiums are established by considering the risk; in other words, your premium will be higher if you’re in an overrepresented category with regard to insurance claims.
- Vehicle. Insurance premiums will be higher for vehicles that are either expensive or very popular among thieves. In the same vein, insurance companies see both high-performance and off-road vehicles as riskier.
For example, in 2020, 40% of all vehicles stolen on the island of Montréal were Honda CR-Vs , which explains the higher premiums associated with this particular make and model! Make sure to check out statistics such as these before purchasing your next vehicle. - Place of residence and kilometres driven. The risk of an accident is understandably higher if you drive 50,000 km rather than 10,000 km per year. The same holds true for driving in an urban rather than a more remote region. Certain areas also experience more car thefts, which is directly linked to higher premiums.
- Driving record. Having numerous demerit points can be very costly, both when you renew your driver’s licence and with regard to insurance. All the more reason to adopt safe and responsible driving habits.
- Coverage. Insurance generally comprises a number of coverage options. In general, the lower your deductible (the amount you must pay in the event of a claim) and the greater the coverage (e.g., replacement value - as new - for 5 years), the higher the premium.
Institutions that finance vehicle leases or purchases usually have specific coverage requirements. Make sure to inquire!
Lastly, just about every insurance company “specializes” in a specific type of coverage. The secret? To get the best coverage at the best price, you’ll need to check out the various offers every time you renew your insurance. It may be helpful to check out some of the Web sites that compare various insurance plans. Happy shopping!
