8 Things You need to Know before buying auto Insurance


Auto Insurance – Things To Keep In

If you are looking for suitable auto insurance it is quite likely that you could be in a state of confusion and indecision. This is because you can come across dozens of offers either on the internet or through referrals and other such avenues. Hence it is quite likely that you will be quite confused with the various options that could be coming in your way. It also could obscure your buying decision. Under the above circumstances, you need to be crystal clear about your requirements. Since there are many such service providers in Ontario and surrounding areas, you must know what to expect from them. Here are a few important points which could help you to make the right choice as far as the right insurance for your auto is concerned.

Find Out How The Insurance rates are determined

The first and foremost thing is to find out as to how the rates for insurance for cars are determined. Basically there are two factors. The first is the underwriting and the second is the rating of your car. Insurance companies go in for underwriting to find out about the risk that is associated with the applicant and group the applicant with many other risks. They then take a call if the insurance company will be able to accept the application. Each underwriting process comes out with a result and based on the same a pricing is assigned. Based on this the cost is decided for the policy. Each company has its own rating system in Canada and therefore you may need to have some basic idea as to how they work.

Factors That could impact your rate

Apart from the underwriting process and rating your driving record and the geographic territory you are in could also impact the cost of your insurance. For example the rate in urban area could be more when compared to rural areas. Therefore the Canada provinces which you are in could impact the cost of your insurance for your vehicle. There are other factors too such as your age and gender. Males are prone to have more accidents and certain age groups also are prone to reckless driving which could impact the premium payable. Your marital status could also impact the premium rates. Married people are more responsible and therefore will be more careful in driving the car. Your previous insurance premium history will also result in higher or lower premiums. If you have defaulted in payment of premiums it certainly will have a negative impact and could push your vehicle insurance costs. Hence all these points should always be kept in mind when you decide to go in for auto insurance.

The Vehicle Details Could Also Impact Cost

The model of the vehicle, its age, the usage in terms of annual mileage, make and model, petrol or diesel fuel are also factors which could have a bearing on the cost. Luxury and sports cars usually have more number of claims and therefore they will be higher priced as far as insurance costs are concerned.

Look For Discounts from Agents

Insurance agents whether they are from Ontario or Quebec have a big role to play in selling vehicle insurance to their customers. It is bread and butter for many of them. They get smart commissions from the insurance companies for selling their policies. Hence as a customer, you should try and negotiate a good deal from the agents and look for some smart discounts. Many agents are ready to give smart discounts because it will help them to reach their targets on completion of certain numbers and volumes. You must try and take advantage of this situation.

Be Aware Of Tort System and No-Fault System

Each state in Canada must go in either for a no-fault system or a tort system. Hence the kind of insurance that is available to you will depend on the state and which system it has implemented. For example British Columbia might have a different system when compared to Ontario or some other province. Both tort system and no-fault system have their own unique features and you should be aware of the same before going in for such insurance.

Are There Any Optional Coverage Available

There are other additional coverage offered by many insurance companies apart from basic liability package. These could include comprehensive coverages and collision coverages. It would always better to go in for comprehensive coverage because it is all encompassing and covers weather damages, fire, vandalism, theft and flood, in addition to the basic liability. Hence you must assess your risk profile and could add the additional optional coverage. This will certainly push your insurance premium cost significantly.

Where to Look For Information

Getting the right information is extremely important as far as getting the right insurance for your vehicle is concerned. You must spend time getting the right information and it could be from state insurance department websites, public libraries, consumer groups and various consumer publications. There are also personnel available in the various state insurance departments who are ready to answer queries and clear doubts.

Where to shop and how to shop

When looking for auto insurance you must understand that more is the merrier as far as quotes are concerned. it would not be advisable for you to just restrict to one insurance company. You must at least have eight to ten quotations available with you. Shopping around and then deciding without any doubt is the best way by which you can aspire to get the best deal. You must therefore start the process in advance and in right earnest. Hurrying through the process in the eleventh hour just because your insurance premium is expiring is not the way forward. By doing so, you will end up paying a much higher premium than what you would have done otherwise.


Hence at the end of the day there are quite a few important points which must be kept in mind when it comes to buying an insurance policy for your vehicle. There are many dynamics and permutations and combinations involved and you must always be aware of them at all points of time so that you make the best out of the deal.

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