High-Risk Drivers can find Reasonable Car Insurance Rates

You simply cannot afford to drive without adequate protection against vehicle-related accidents or injuries. Car insurance is not only critical for your personal financial health – it is the law. Amounts vary by province; however, all Canadian drivers must carry minimum amounts of auto insurance coverage.

What Determines Auto Insurance Rates?

The higher the level of risk you present to the insurance company, the higher your premium will be. The primary characteristics which mark you as “high-risk” to insurers include:

  • Poor driving record – a history of accidents or moving violations will trigger higher premiums.
  • Youth – drivers under the age of 25 are typically viewed as high-risk. This is due to their greater overall incidence of accident involvement and moving violations.
  • Coverage lapses – unexplained interruptions in coverage prior to applying for coverage.

How High-Risk Drivers Can Reduce Their Premiums

1) Develop a positive driving record

This is an obvious initial step. Obey all traffic regulations, and pay close attention at all times when behind the wheel.

2) Compare rates among carriers

Auto insurance premiums for the exact coverage vary widely among carriers. Obtain at least three to five quotes before making a final selection.

3) Decline extraneous coverage

If your vehicle is paid for, full coverage is not required. If your car is older, consider omitting full coverage. The cost to replace your entire vehicle if a total loss occurs may be less than the increased premiums of full coverage.

4) Consider a higher deductible

Paying the higher premium associated with lower deductibles may not be cost-effective. Choosing a higher deductible increases your out-of-pocket costs if a loss occurs, but lowers your premium substantially. Instead of selecting a higher-cost lower deductible, invest the difference in premium cost in a mutual fund or other investment.

5) Pay all premiums promptly

Policy lapses due to delinquent payments will keep you in a higher-risk category.

6) Choose your vehicle type carefully

Consider a more practical vehicle, rather than that latest souped-up sports model with all the latest bells and whistles.

7) Do not switch carriers until your current policy is close to expiration

Early cancellation penalties can be substantial; very often, they exceed any premium savings offered by a different carrier.

8) Consider driver-education courses

This is a valuable strategy for younger motorists and those with poor driving records. Insurers may take your certificate of completion from such instruction as solid proof of your commitment to better driving habits. Youthful drivers may also consider remaining on parents’ policies as authorized drivers, rather than purchasing separate policies.

High-risk auto insurance premiums may seem onerous. The cost is well worthwhile, however. The losses you could incur in an auto-related accident or injury, and the legal penalties for non-coverage far exceed any premium costs. By following the above suggestions, you will ultimately find yourself far down the road to more reasonable future rates. Happy motoring!