Are smart cars expensive to insure?

With smart homes and green vehicles becoming more popular amongst Canadians, a smart car may be on your radar if you're considering buying a new car. With any new purchase, comparing upfront and ongoing costs is essential if you want to stay within your budget. Beyond maintenance expenses, another cost you'll need to worry about is car insurance. So, are smart vehicles more expensive to insure compared to other vehicles on the road? Stick around to find out.

What is a smart car?

So, what exactly is a smart car? Smart cars are a type of car model that has sophisticated software, electronics, and features. Whether it be connectivity for your smartphones, advanced driver-assistance systems, regenerative braking mechanisms, and autonomous driving, smart car models enhance an owner's experience while they are on the road. A common smart car you'll notice while driving is the Smart Fortwo, Smart Fortwo EQ Prime, and Smart Fortwo EQ Pure.

How much is car insurance for a smart car?

The average rates for smart car models can differ based on where you live in Canada. However, the national average for the Smart Fortwo can range from $30 to $40 monthly or more and will be calculated based on other factors unique to your unique circumstances.

Why are smart cars more expensive to insure?

Because of their compact design, smart car models are more expensive to insure than the average vehicle because of their high repair costs. Depending on the type of crash, a lot of the time, the smart car will be a complete write-off, meaning your insurance company will need to compensate you for the price of replacing your vehicle. As such, you can anticipate paying more for your coverage than other vehicles.

How are auto insurance costs calculated?

When purchasing auto insurance for your vehicle, an insurance company will consider numerous factors when calculating your car insurance rates. While each company has a different rating system, as a general rule of thumb, your provider will consider the following:

Where you live

One of the most important factors an insurance provider will consider when calculating your insurance price is where you live in Canada. Generally speaking, those living in busy city areas with high traffic volumes and higher crime rates like theft tend to spend more on coverage compared to those living in rural areas. This is because those living in the city are more likely to file a claim with their insurance company, given the increased risks associated with residing in a busier area.

Your driving experience

Your overall driving experience will also be considered. Experienced drivers over the age of 25 are less likely to be involved in a collision than those with fewer years behind the wheel of a vehicle. As a young driver, the best thing you can do to lower your premiums in the future is maintain a clean driving record.

Past driving record

This brings us to our next point. A driver's history will significantly influence what they pay for their premiums. For example, drivers with numerous accidents and insurance claims can expect to pay a high price for coverage compared to someone who has a clean record with no accidents, fines, or claims, given that they will be viewed as more of a risk by their insurance company.

The car insurance companies you work with

Who you choose to have your insurance coverage with can also impact your average annual premium. As we said, insurance providers have different pricing parameters, which could play a role in what you pay when insuring your vehicle. The best thing you can do when purchasing insurance is to compare prices from different companies and their coverage options as well for a more customized experience and the best deal possible.

The insurance coverage you choose

As you can probably guess, the insurance you choose will influence your prices. Opting for higher limits and additional policies beyond basic coverage will lead to higher prices, given that you will need to pay for more comprehensive protection.

The make and model of the vehicle you have

The make and model of your vehicle is another important factor insurance companies will take into account. For example, luxury models with higher repair prices and after-market modifications will cost more to insure compared to drivers who have a standard vehicle. This is because drivers who file a claim for their luxury models will cost their insurance provider more for repair services and replacements compared to owners of standard vehicles.

Your deductible amount

Lastly, your deductible amount can influence what you pay for insurance. The lower your deductible, the more money your insurance provider will need to pay if you need to file a claim, which can increase your premiums.

Smart car insurance you need

If you're thinking about driving on Canadian roads, you'll need to have valid car insurance to do so. While some coverages are mandatory, other types of auto insurance are optional and meant to supplement your standard coverage. Here's a closer look at some of the smart car insurance you'll need:

Third-party liability

Third-party liability insurance, also known as car liability insurance, is a mandatory policy for all motorists in Canada, regardless of what province or territory you live in. This liability coverage is meant to protect you in the event you cause property damage or bodily injuries to a third party while operating your motor vehicle. Should a claim be filed against you, this insurance will cover repair costs, replacements, medical bills, legal fees, and other expenses associated with your lawsuit up to your policy limits.

Uninsured motorist coverage

Uninsured automobile coverage is, again, mandatory for all motorists. This insurance coverage will protect you if you are involved in a car accident with another at-fault driver who is either uninsured or underinsured. This car insurance will also protect you if you are in a hit-and-run collision as well, ensuring that you are fairly compensated for your injuries and losses.

Accident benefits insurance

Accident benefits coverage is the final mandatory car insurance policy for Canadians. This coverage protects you, your passengers, and any pedestrians who are in a car accident, regardless of who is at fault for the collision. With accident benefits, you'll receive compensation for medical costs, rehabilitation, lost wages, caregiver expenses, and more, depending on the specifics of your coverage.

Collision coverage

Collision car coverage is an optional car insurance you may wish to consider adding to your portfolio. With this insurance, any repair or replacement costs required for your vehicle following an accident will be covered by your car insurance company. Keep in mind that collision car insurance requires policyholders to pay a deductible amount at the time of their insurance claim before their policy will kick in and cover the rest of the costs.

Comprehensive coverage

Another optional insurance you may want to think about is comprehensive car coverage. This insurance will cover the cost of vehicle repairs or replacements needed for your car following a non-collision event. Common insured events include vehicle theft, vandalism, certain severe weather conditions, and fire damage. Again, you'll need to pay a deductible to your insurance provider before they will cover the rest of the damages or replacements if your vehicle is a total loss.

Accident forgiveness

Finally, accident forgiveness is a type of one-time car insurance policy you have the option of purchasing. Typically, following an at-fault accident, your insurance rates will increase the next time you go to renew your coverage. However, with accident forgiveness, you can avoid a rate increase after your first at-fault collision. This policy is meant to encourage safe driving and give those with a clean driving record grace following a collision. Ultimately, once you use this car insurance once, you cannot use it again.

How to save on car insurance

Purchasing multiple auto insurance policies beyond basic coverage can result in you having to pay higher rates for your coverage. That said, there are ways that you can save money on your premiums the next time you go and renew your insurance for your smart car. Here's what you need to do:

Ask about discounts

What a lot of drivers don't know is that there are several different discounts offered by car insurance companies that can help you lower your insurance costs. Whether it be adding safety features to prevent car theft, anti-lock brakes, GPS safety, or other security features like dash cams, insurance companies often provide discounts to those who make their vehicle safer to operate.

Other discounts include ones for safe drivers, being a member of a professional association, and more--all you have to do is ask your insurance carrier to see which promotions and savings you qualify for!

Bundle your insurance

Bundling your auto coverage can also help you save money when purchasing home insurance. For example, if you have home coverage already or another type of insurance, you can bundle your policies together with the same insurance company. Ultimately, insurance companies appreciate when customers have more than one policy with them and will often lower their price for insurance as a way of saying thank you for the business.

Shop around and compare quotes

If you live in a province or territory with a private insurance system, you'll have the opportunity to shop around and compare quotes from different insurance providers. By comparing what each company is offering in terms of coverage and price, you'll be able to find an auto policy that works with your unique needs and vehicle, ensuring that you feel confident in the coverage you've purchased.

Consider your coverage

Ultimately, purchasing additional smart car insurance for your vehicle beyond basic coverage will increase your insurance rates. This includes opting for higher coverage limits. The best thing you can do in this scenario is consider your driving habits, needs, and whether full coverage insurance is required. By doing so, you can opt for coverage limits that work for you, which could potentially help you save on your insurance rates.

Change your deductible

Lastly, consider opting for a higher deductible. As we mentioned earlier, a deductible is the amount you're required to pay out of pocket for certain collision repair services if your vehicles have been damaged before your insurance company will cover the rest of the costs. By opting for a higher deductible, you're essentially taking on more of your responsibility from your provider. In turn, your insurance company may reduce your insurance rates.

Contact BrokerLink for quality smart car insurance

Whether you're looking to insure your vehicle or wish to compare car insurance rates for your smart car, the experienced broker from BrokerLink is here to help guide you through your insurance journey.

BrokerLink is pleased to work and live in your neighbourhood over the years! With locations across Canada, there's a chance we may be close by! If so, don't hesitate to come in and work with one of our brokers one-on-one! If we aren't in your neighbourhood, feel free to give us a call during business hours to speak with a team member. Alternatively, you can get a free car insurance quote directly from your device using our online quote tool!

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FAQs about smart car insurance

Are smart cars expensive to run?

Generally speaking, those who own a Smart Fortwo vehicle can anticipate an average maintenance cost of $500 a year. That said, it depends on your driving habits, where you live, and how well you take care of your vehicle on a daily basis. It also depends on whether you purchased the vehicle, new or used.

When is the best time to buy a car?

If you're thinking about buying a new Smart Fortwo vehicle, you may be wondering, when is the best time to buy a car in Canada? In general, one of the best times to buy a new car is at the end of the month or year. Most dealerships have sales toward the end of the month and the end of the year to ensure that the dealership is able to hit their monthly and annual sales goals. So, by going during these times, you'll likely be able to qualify for different promotions and savings that you would otherwise not be offered.

Is car insurance more expensive for new cars?

So what about coverage? Is car insurance more expensive on a new car compared to a used vehicle? Insurance for vehicles is often more expensive for new cars due to the increased expense of replacing or repairing them. As a result, if you sell your old automobile and acquire a new one, your insurance premiums may increase. That being said, driving new cars may benefit you in terms of your premiums, given that they have more safety and security features that are meant to make your experience safer while on the road and while parked. So, if you're thinking about buying a new car, you won't need to stress as much when it comes to coverage, given that your costs should even out in the end.

What happens if my car is stolen and then found?

If your car is stolen and then found, what happens next? In this scenario, you'll likely inform the police that your vehicle has been stolen. At this time, the police will start a police report and begin their investigation. Once you contact the authorities, you'll also want to contact your insurance company and inform them of the vehicle theft. You'll likely be asked to describe what happened leading up to your vehicle being stolen and other information about the incident. Now that you've contacted both parties, you'll need to wait for the police to conduct their investigation. In the event your car has been found, the police will release your vehicle back to you. You'll then need to contact your insurance company and inform them of any damages or items stolen.

Does insurance cover stolen cars?

When purchasing coverage, you may be wondering, "Does insurance cover stolen cars?" If you purchase comprehensive coverage, then you can make a claim with your insurance provider in the event your vehicle is stolen. If, by chance, your vehicle is recovered by the police, you can make a claim with your provider for any repairs or replacements that are needed for your vehicle after the fact. Keep in mind that comprehensive insurance is optional. Because of this, you will need to pay extra for this type of car insurance.

If you have any questions, contact one of our local branches.