Getting your first car insurance policy can often be intimidating. This is especially true if you are a first time buyer or new driver. Most customers don't know where to look and how to when it comes to getting a car insurance policy.
If you're purchasing car insurance for the first time, you might make some mistakes along the way. Common ones include not getting enough coverage, not familiarizing yourself with your individual policy and policy limits, not taking advantage of discounts you might qualify for, not disclosing prior claims and ignoring or missing your financing terms and agreements. This probably sounds like a lot, but you can't blame yourself.
You might not know choosing the right car insurance policy is one of the best ways to reduce your insurance premiums. However, this is only true if you do it right. That's where having an insurance broker can help you out! That's why we've compiled a list of questions you should be asking yourself while looking for a car insurance policy. It will help you find the coverage that suits your budget and needs.
What kind of coverage do I need?
Before you pick up the phone and get your first car insurance quote, you have to contemplate what kind of coverage you actually need. Every single policy is unique. In other words, one person's wants and needs may differ from another's.
There are several types of coverage you can add to your car insurance policy. Some types of auto insurance coverage are mandatory, while others are optional. Mandatory coverages will vary depending on your province. That's why it's important to understand the types of coverage you have to have where you live. Everywhere will give you a different answer. Despite this, some of the most common types of coverage include the following:
Liability coverage
Liability car insurance, also known as third-party liability insurance, provides compensation to the other driver for property damage and bodily injuries if you are found at fault for a car accident. Additionally, it can also provide coverage for any legal fees you may incur following the accident.
Direct compensation coverage
Direct compensation coverage will compensate you if your car is damaged in an accident where you are not at fault. It's called direct compensation because you deal directly with your own insurance company when you receive compensation after making an insurance claim.
Collision coverage
Similar to direct compensation coverage, this type of car insurance coverage will help you if you are involved in an accident with another vehicle. However, it has one extra feature. You will also be covered for damages caused by collisions with objects, such as poles, fences or debris on the road. Collision coverage is versatile and applies in multiple situations.
Accident benefits coverage
Sadly, costs associated with a car accident don't end immediately after it happens. You and other people involved such as passengers or pedestrians may require medical rehabilitative attention after a car accident. After this happens, accident benefits coverage will come into effect.
Uninsured automobile coverage
Car insurance is mandatory in Canada, but some people still get behind the wheel without it. Uninsured automobile coverage protects you and your passengers if you get into an accident with an uninsured or underinsured driver. It also applies to hit-and-run accidents.
Comprehensive coverage
Although it's a type of optional coverage, comprehensive coverage is still helpful. It combines aspects of the various other types of coverage, but instead protects you against all types of damages caused to your vehicle. It can also include perils such theft, vandalism, riots and natural disasters.
Accident forgiveness coverage
You can probably guess that your insurance rates will go up after an at-fault accident, but what if there was a way to prevent this? That's where accident forgiveness coverage comes in. This type of coverage allows you to maintain your clean driving record by preventing your insurance company from raising your rates after your first at-fault accident.
Depending on the province you live in, some types of coverage are mandatory, and others are not. Adding every type of coverage to your policy can get expensive. That's why it's important to understand what you need and what you don't. From there, you can create a custom insurance policy that's affordable and protects you at the same time.
Do you want to learn more about the ins and outs of car insurance? Check out our blog about how car insurance works.
How do I choose the right insurance company?
When buying car insurance coverage, it's important to find the right auto insurance company that suits your specific wants and needs. Every insurance provider is different and offers clients unique benefits. Some insurance companies have strength in their claims department, and others boast up-to-date digital options. When buying car insurance, you have to decide what's most important to you.
No matter which insurance company you choose, you should find one that has a good reputation for claim settlement. As a potential customer, you should do some research, read client testimonials and reviews, and shop around. Request auto insurance quotes from insurance companies to find cheaper car insurance that provides the coverage you need.
If you don't have time to read reviews, research, and shop around, consider reaching out to a licensed insurance broker. Your broker will do all the heavy lifting for you, including getting multiple quotes from various insurance companies in a matter of seconds. Even if you can do it yourself, finding first-time car insurance can be overwhelming. Your broker will explain everything to you when you buy car insurance to ensure you get the policy you need and the affordable auto insurance rates you deserve.
Does my insurance policy provide the right coverage for my needs?
Before you get insurance for the first time, you should re-read and double-check everything in order to ensure you understand the agreements and specifications of your policy. Double-check that you have enough coverage for both bodily injury and property damage. Also, ensure that your car insurance policy complies with your provincial regulations. If you are unsure, you can always ask a broker for help.
If your car insurance doesn't provide enough coverage, you will have to pay more out of pocket. Coverage limits exist, and so do deductibles. Your coverage limit is the maximum amount of money your insurance company will provide when compensating you after making a claim. A deductible is the agreed-upon amount that you have to pay before your insurance company helps pay for the damages.
Factors that affect auto insurance rates
Take your time when reviewing your car insurance policy. Making an impulsive decision can lead to getting an expensive policy with coverage you don’t need. Asking for help from a broker can prevent this, but it’s important to note that some aspects are beyond your control. Many factors affect your insurance rates — the most common ones include:
Location
Where you live plays a huge factor in insurance companies calculating your insurance premium. That's because where you live changes your risk level. For example, those living in larger cities with more traffic are more likely to get into accidents than people living in rural areas with quiet roads. The crime in your area can also cause auto insurance companies to increase your rates because of the risks of theft and vandalism.
Age
Unfortunately, young drivers will always start with a high insurance premium. That's because even as an occasional driver, those with less experience are at a higher risk on the road than their counterparts. Even after passing the road test, new drivers pay more for more insurance. This is especially true for those under the age of 25, specifically males. However, as young drivers gain more experience on the road and maintain a clean driving record, they can expect their rates to go down.
Driving Experience
Car insurance companies also look at your amount of driving experience when giving quotes for first-time car insurance. Inexperienced drivers are more likely to get into an accident than their counterparts. As a result, being on the road comes with a much higher risk. Whether you recently got your driver's licence or haven't had insurance before, you are considered a new driver. Getting insurance early on can help you save money in the long run.
Driving Record
Insurance companies base rates on how safe of a driver you are. This is done by reviewing your insurance history and seeing if you have made claims for at-fault accidents in the past. An insurance agent will also check your driving history to see if you have had any recent tickets or traffic violations. The good news is if you have a clean driving record and maintain it for a couple of years, you can reap the benefits of lower insurance premiums. You can become a better driver by following our safe driving tips.
How much will my first car insurance policy cost?
If you're purchasing auto insurance for the first time, you might be concerned about having high insurance rates. Until you become a more experienced driver, your auto insurance rates may seem high, but it's important to note that the exact price will vary from person to person. As you keep driving and maintain a clean driving record, your car insurance rates may start to go down! Expect to pay more for first-time car insurance. In the meantime, we have compiled a list of tips and tricks to help you save money on your car insurance rates. Review our blog post about how to save money on your car insurance to learn more.
Consult a BrokerLink broker today
If you're a new driver, you likely don't have an insurance history. Because of this, you will be paying much more for car insurance than an experienced driver does. That's why you should check out all of your options when buying car insurance for the first time. The best way to find deals and discounts on car insurance is by consulting a broker. It doesn’t matter whether you’re renewing your car insurance policy or updating an expired car insurance renewal.
Whether you're purchasing first-time car insurance or updating your existing policy, we can help. At BrokerLink, our car insurance brokers are experts when it comes to all stages of insurance. Working with an insurance broker can help you save money and find the best car insurance rates, maybe even some discounts! To get started, give us a call, visit one of our locations across Canada, or complete a quote online.
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First car insurance policy FAQs
Can I get another insurance policy for my secondhand car if it's already been insured?
When purchasing a used vehicle, it doesn't matter whether or not there was an insurance policy in the previous owner's name. You will need to buy your own car insurance coverage as the vehicle owner. The policy has to be your name to drive the vehicle in Canada legally. Consult with your insurance broker to explore the many types of auto insurance coverage available.
Can I get car insurance for multiple cars and drivers?
Of course, you can! If you have more than one driver or vehicle at your home, brokers recommend looking into getting one policy for all of them instead of separate ones. Having multiple cars and drivers on one policy will help save you money because you could qualify for a multi-vehicle insurance discount. In contrast, having multiple auto insurance policies can get expensive quickly. Speak with a broker to learn more about insuring multiple vehicles on one car insurance policy.
If you have any questions, contact one of our local branches.
