Are you in the market for car insurance? Buying insurance is important, which is why you want to avoid making the most common auto insurance mistakes. From not shopping around to automatically renewing car insurance with the same provider, check out this list of the top car insurance mistakes customers make.
Mistake #1: Not shopping around and weighing your options
Whether you are looking to buy a single car insurance plan or multiple auto insurance policies, the biggest mistake you can make is not shopping around and weighing your options. Approach buying car insurance like you would buying a car. You wouldn’t purchase the first car you come across, right? No. You would visit a dealership, or several, take various cars out for a spin, do some independent research online, speak with a dealer, and then make a decision. You should approach purchasing a car insurance plan the same way. Not all insurance companies offer the same insurance products, the same insurance discounts, or use the same formulas to calculate rates. Thus, it is extremely important to reach out to multiple insurers, obtain quotes from each of them, and compare your options. You may find that one provider offers the same or better coverage at a lower price than another. If you don’t have time to shop around on your own, enlist the help of an insurance broker. BrokerLink has a team of licenced insurance brokers and over 200 locations across Canada. Contact us and any one of our car insurance specialists would be pleased to help you compare policies and weigh your options. We specialize in finding tailor-made car insurance coverage at competitive prices for our customers.
Mistake #2: Comparing policies incorrectly
Beyond simply comparing multiple car insurance policies before deciding which to purchase, you need to make sure that you are comparing insurance products correctly. Many customers might be surprised to learn that there is a right way and a wrong way to compare car insurance plans. The right way is to make an apples-to-apples comparison. What we mean by this is comparing every single aspect of the policy, rather than only one part of it, such as the price. Car insurance policies differ significantly, so you will want to ensure that when you’re obtaining quotes, you are requesting the same deductibles, coverage levels, and coverage types from each company. For example, if your car insurance quote for one company includes optional coverage like accident forgiveness coverage or comprehensive coverage, make sure that the next insurance quote you obtain also features those types of coverage with the same limits and deductibles. Only then can you make an accurate and fair comparison.
Mistake #3: Being unprepared when requesting a car insurance quote
When you request a car insurance quote, whether through an insurance broker like BrokerLink or directly through an insurance company, you will need to answer some questions. Answering these questions is crucial if you want your auto insurance estimate to be as accurate as possible. If you do not answer the questions correctly, it could lead to an inaccurate quote - or worse, you end up purchasing more or less insurance than you need. When obtaining a car insurance quote, customers should be prepared to answer questions about the make and model of their vehicle, their driving habits, and their personal information, such as their age, gender, and home address. In addition, if you can provide further information, such as your annual mileage or the distance of your daily commute to work or school, this can help make your quote more accurate. If you are interested in requesting a free car insurance quote, contact BrokerLink today. Using our online quote tool, you can receive a free quote in as little as five minutes.
Mistake #4: Lying on your car insurance application
Another common mistake - whether intentional or not - that customers make is lying on their car insurance application. Sometimes it’s innocent, with a customer forgetting to provide information about a friend or neighbour who frequently borrows their cars, and sometimes it’s intentional, with a customer pretending to live at a different address in an attempt to benefit from a cheaper rate. Either way, if you are caught lying or misrepresenting yourself to your car insurance provider, they can cancel your policy or not pay out in the event of a claim. A cancelled policy stays on your insurance record for years and will likely lead to higher insurance premiums down the road. It can even make it difficult to obtain a new insurance policy, and since car insurance is a legal requirement in Canada, your inability to obtain a policy would mean the difference between being able to drive and not being able to drive. Thus, honesty is always the best policy when it comes to car insurance. Be upfront about every aspect of yourself, your vehicle, and your driving habits.
Mistake #5: Failing to understand mandatory car insurance coverage in your province
Auto insurance is mandatory in every Canadian province and territory, but that doesn’t mean that mandatory coverage is the same. Therefore, it is important to understand the minimum coverage requirements in the province you live in. Otherwise, you may purchase a policy that doesn’t meet these requirements and is therefore invalid. Since car insurance requirements vary, we will use one province’s requirements as an example: Ontario. In Ontario, all drivers are required to carry a minimum of $200,000 in liability insurance, as well as accident benefits coverage, uninsured automobile coverage, and direct compensation - property damage coverage. If you purchase a policy that does not feature these types of coverage, you will be categorized as an uninsured driver and could face serious consequences if caught. Get in touch with BrokerLink to learn more about mandatory car insurance coverage where you live and for help finding a policy that complies with local laws.
Mistake #6: Forgetting to notify your insurance company after a major life event
Notifying your insurance company following any major changes in your life is crucial, especially when you consider that some changes can impact your insurance premium. Examples of significant changes that you should talk to your insurance provider about include getting married, getting divorced, moving into a new home, or a new driver, such as your teenage child, being added to your household. The reality is that all of these details - marriage, your home address, the members of your household who drive your car - will impact your car insurance rates in Canada. Meanwhile, a change in location, especially if you move to an entirely new neighbourhood or city, will also affect how much you pay for car insurance. If the crime rate in your new neighbourhood is lower than that in your last one, you might benefit from a lower premium. Finally, the people in your household who drive your vehicle can also influence car insurance costs. The more drivers added to your policy, the more expensive it is likely to be - especially if one of those drivers is a new or young driver.
Mistake #7: Adding all drivers in your household to every car insurance policy
If you choose to add all drivers in your household to every car insurance policy you own, this could be a mistake. For example, just because your teenage son just got his G2 driver’s licence in Ontario does not mean that they need to be added to multiple car insurance plans.
They must be added to the policy with the vehicle that they will be driving. If you have a policy for both your used Honda Civic and your 2020 Ford Mustang GT, consider adding them to the insurance policy for your Honda Civic only, if this is the vehicle they will primarily be driving. The same goes for if you have a driver in your household with a poor driving record. If you must add them to your policy, choose the one with lower rates. However, depending on the extent of their poor driving record, you may want to consider not adding them to your policy at all or speaking with your insurance company about excluding them from your policy. Overall, adding any driver to your policy will likely increase your premium. However, there are smart ways to go about it that can mitigate how much they increase by.
Mistake #8: Not buying enough auto insurance coverage
Anytime you purchase a car insurance policy in Canada, it is up to you to ensure that you buy enough coverage. By “enough coverage,” we mean coverage that not only meets the minimum coverage requirements in the province you live in but also coverage that meets your needs as well as any other legal obligations you are under. For example, as mentioned above, mandatory car insurance coverage in Ontario consists of third party liability insurance, accident benefits insurance, uninsured automobile insurance, and direct compensation - property damage insurance. If you do not purchase all four of these mandatory coverage types or purchase less than $200,000 of each, your policy will not be valid. Similarly, if you lease or finance your vehicle, your lender or bank may require you to purchase additional types of coverage, like collision coverage or comprehensive coverage. Failing to purchase these optional car insurance coverages would put you in breach of your loan contract, which can lead to it being voided. In a worst-case scenario, the financing company could even take legal action against you.
Mistake #9: Buying the minimum car insurance coverage only
While buying less than the minimum coverage requirements in your province may not only be a mistake but also an illegal act, buying the minimum car insurance coverage only is also not a wise choice. Although it can be tempting to purchase the bare minimum coverage, especially if you are on a tight budget and like the lower price tag that comes with it, this is generally not recommended. For example, the $200,000 minimum for third party liability coverage in Ontario is low, meaning if you were ever involved in an accident that you caused, this coverage limit may not be enough to cover the cost of the damage. In addition, optional coverages offer many benefits to drivers that go far above and beyond what mandatory coverage offers. For example, comprehensive coverage pays for damages caused by non-collision-related incidents, such as if a tree branch fell on your car while it was parked or your vehicle was stolen. If you drive an expensive vehicle, optional coverage like collision or comprehensive coverage is often worth it.
Mistake #10: Buying more car insurance coverage than you need
Just as not purchasing enough car insurance coverage is a mistake, so too is buying more car insurance coverage than you need. There is such a thing as being over-insured. You will want to avoid this reality, especially if you are looking to keep car insurance costs low. While you always want to make sure that you meet the minimum coverage requirements in your province, there are some types of optional coverage that may not be worthwhile depending on your circumstances. For example, if your vehicle is not worth much, collision and comprehensive coverage probably don’t make sense. Speak with a BrokerLink insurance advisor for a professional opinion on the best car insurance coverage for your needs.
Mistake #11: ot choosing your deductibles carefully
When it comes to making decisions about your policy, the deductible you choose is one of the most important factors. All car insurance policies have deductibles, and the deductibles you select have a major impact on your premium. However, given how deductibles work - that policyholders must pay them in the event of a loss before the insurance company covers the rest - it is crucial that you choose a deductible you can reasonably afford to pay. When buying a car insurance plan, you will likely need to select a deductible for each type of coverage you include with your policy. Note that the higher your deductible, the lower your premium will be. However, on the flip side, this means that you will need to pay more money toward an insured loss. Oppositely, the lower your deductible, the higher your premium will be since you are putting more financial responsibility on the insurance company. Review your financial situation and think long and hard before selecting your deductibles. You can also reach out to a BrokerLink car insurance expert for advice. Keep in mind that you can alter your deductibles down the road. So if your financial situation changes, you can contact your insurer and adjust your deductibles before your policy renews.
Mistake #12: Not bundling your insurance policies together
Insurance bundling is one of the most effective ways to save money on car insurance, which is why forgetting to bundle your policies can be a serious mistake. Bundling insurance is best suited to customers who are looking to buy more than one insurance policy. This could be two car insurance plans - one for each vehicle in your household - or one car insurance plan and one home insurance plan. By purchasing more than one insurance product from the same provider, your insurer is likely to give you a discount on each policy. To learn more about insurance bundling and to find out more about what conditions must be met to qualify, contact BrokerLink today.
Mistake #13: Staying with the same insurance provider
Many customers make the mistake of sticking with the same insurance provider for years or even decades. While it’s possible that you’re consistently getting the possible rate from your insurer year after year, it isn’t likely. That is why experts generally recommend switching insurance providers periodically. At the very least, when your policy is up for renewal, we recommend shopping around to make sure that your current provider still offers the best rate. If you find that another insurance company is offering the same or better coverage at a cheaper rate, it might be worth making the switch. If you are happy with your current provider, you could even present your findings to them, and they might be willing to offer you the same deal.
Mistake #14: Not taking advantage of car insurance discounts
There are all types of car insurance discounts out there. So many, in fact, that not taking advantage of at least one is one of the biggest mistakes you can make as a driver. Beyond the discount you can receive for bundling insurance policies, as discussed above, there are several other types you may be eligible for. Swapping summer tires for winter tires, driving a hybrid or electric vehicle, installing an anti-theft device in your car, completing an approved driver’s education program in your province, and much more could garner you a major discount on your auto insurance policy. There are even employment and alumni-based insurance discounts you can ask about. To take advantage, all you have to do is ask. So the next time you are shopping for car insurance, be sure to ask your broker about the various auto insurance discounts you may qualify for.
Mistake #15: Buying a car that costs a lot to insure
Buying a vehicle that costs a lot of money to insure is a common mistake that drivers make. While a luxury sports car or vintage collectible might seem enticing, the reality is that the more expensive the car, the more expensive the car insurance. So if you want to keep car insurance costs down, buying an expensive car may not be the smartest idea. It’s worth noting that trim levels and engine choices can also impact how much an insurance company charges you for a policy. This is because the more valuable or unique your car is, the more money it will cost to be repaired or replaced. Thus, the insurance company will charge you more to protect your vehicle. To find out how much car insurance will cost for a specific make and model of car compared to another, contact BrokerLink for a free quote, it can be a good idea to obtain a quote before purchasing a vehicle, so there are no unexpected surprises after purchasing a new vehicle. A BrokerLink insurance advisor can also provide insight into the vehicle-related factors that impact car insurance, like trim level, safety rating, reliability, rate of theft, and more.
Get in touch with BrokerLink to learn more car insurance mistakes
We hope this article has been informative and will help you avoid the car insurance mistakes listed above. At the end of the day, finding the right car insurance plan is easier than you might think - especially if you have the help of a professional broker. BrokerLink’s team of dedicated and licenced car insurance advisors can help customers find everything from standard auto insurance to motorcycle insurance. We can also provide information on car insurance discounts, safe driving tips, and much more. Get started with BrokerLink by contacting us today. We can be reached online, over the phone, or in person at any one of our branches in Canada (we have over 200 of them country-wide). You can also begin your car insurance journey right now by taking advantage of our online quote tool. We can’t wait to hear from you!
Get an auto insurance quote [phone]
