Have you ever been surprised by an increase in your insurance premium at renewal time? In this article, we’ll explain a few of the reasons why your auto or home insurance rate may have increased.
We’ve also invited BrokerLink insurance expert Tishon from our Toronto office to share his knowledge! He has some tips about what you can do to manage your insurance premium increases at renewal time.
Why do home or auto insurance rates increase?
Everyone’s insurance policy is different. Whether it’s your home, car or business, your insurance company considers your specific risk factors to determine your rate. If your insurance premium has increased, here are a few of the most common reasons why:
You submitted a claim
If you've been involved in an accident, we understand how stressful the aftermath can be. Luckily, with the different types of auto insurance available, you can rest assured knowing your auto insurers are going to take care of you. The same goes for homeowners who need to file a claim.
One of the top reasons your insurance premium may have increased is because of a claim, whether it be under your collision car coverage or your comprehensive car coverage. For example, your car insurance premiums may increase after a claim if the accident was your fault, depending on your insurer and the situation.
However, the increase can vary depending on other factors, including your history (driving record), loyalty, the likelihood of whether you’ll file another claim in the future and whether you have purchased optional Accident Forgiveness coverage.
What is accident forgiveness coverage?
Accident forgiveness coverage can keep your rates from going up if you are involved in your first at-fault accident. In addition, you will maintain a good driving record as long as you stay with the same company.
Things happen, and that’s what insurance is there for. But you should still do everything you can to avoid claims. Drive safely and keep your home well-maintained.
Tishon’s tip
Check out these tips on how to save on your home insurance premium and these tips on how to save on car insurance!
You got a ticket
If you are surprised by an increase in your car insurance premium when it is renewed, think back… did you get a speeding ticket? Depending on how fast you were going, speeding tickets can cause significant increases in your car insurance premium. According to the Government of Canada, 23 per cent of fatal car accidents were caused by speeding. You could also see an increase if you received a ticket for distracted driving, which is the cause of 21% of fatal car accidents.
Tishon’s tip
A speeding or distracted driving ticket can cause an increase in your car insurance premiums! Don’t risk it: drive at the speed limit, leave your phone in the backseat, and keep your eyes on the road!
You moved
Moving can impact your home and car insurance premiums. Different provinces, cities and locations have different risk levels that can impact your premium. Every area has its own risk factors, such as:
- Traffic patterns
- Access to emergency services and resources, like a fire hydrant
- Proximity to water that could cause flooding
Climate change and extreme weather
Believe it or not, climate change and extreme weather may cause your insurance premiums to increase. As events like flooding, hurricanes, and forest fires increase, they cause more damage, and claims increase as well. When insurance companies receive more claims, they must raise premiums to ensure they can provide coverage for everyone.
More expensive car parts
New cars and more expensive cars have more technology built into them than ever before. While they make our lives easier and our roads safer, the parts and systems are often costly to repair and replace. Sometimes, the parts are specialized, and the systems must be recalibrated with specific equipment, which means only specially trained mechanics can repair the damage. All this means car repair costs are increasing, which can lead to higher premiums across the board.
Tishon’s tip
You know that camera at the back of your car that helps you park? It’s expensive to replace or repair. That’s why a minor incident like a fender bender can cause your premium to increase.
Other factors that can increase your insurance premium
We’ve shared some of the direct causes that could increase your insurance premium. However, there are factors outside of our control that may influence insurance premium costs indirectly, such as inflation.
Inflation is an overall rise in prices in an economy in which the general level of prices for goods and services increases. Simply put, inflation means things get more expensive across the board, including insurance.
Is it possible to prevent an increase in insurance premiums?
There are a few things you can do to help manage increases in your insurance premiums.
Tishon’s tip:
Call your broker at renewal time! Your broker is your best resource when it comes to finding savings on insurance. It’s a great idea to give them a call at least once a year to see if there are any opportunities for you to save and to make sure you have the right coverage in place. Other ways to save on your car insurance coverage and homeowners insurance include:
Have fewer claims
Avoid car insurance claims by driving safely. Observe the speed limit and keep your eyes on the road – and don’t text while you’re driving! Good drivers can always expect lower prices for auto insurance than those with numerous speeding tickets and other violations on their driving records.
Take a safe driving course
New drivers with little to no driving experience should consider taking a driving course – some insurance companies offer discounts if you’ve graduated from an accredited course.
Check out our guide for more safe driving tips!
Keep your home well-maintained and install safety features
Keep your home well maintained to avoid costly repairs and damage, which could result in claims. You may also want to consider installing video cameras and alarm systems, which can also result in lower premiums with available discounts.
Pay your home and car insurance companies on time
Always pay your insurance bill on time. Failure to pay your insurance bill could result in the cancellation of your policy for non-payment, which could affect your insurance premiums in the future.
Bundle your home and car insurance
Bundle your home and auto insurance policies. This could save as much as 15 percent off your annual auto insurance costs!
How can I save on my insurance rates
To save on car insurance rates and home insurance coverage, consider doing the following:
Shop around with an insurance broker
When purchasing auto insurance, don't be afraid to compare rates with different home and car insurance companies to find the best deals.
Just remember that sometimes, the lowest rates aren't the best. When it comes to protecting your vehicle and home, the key is to find a balance between insurance rates and insurance coverage that doesn't end up compromising your overall level of protection.
Ask about other insurance discounts
Don't be afraid to ask an insurance professional about available discounts. Many insurance companies offer discounts for different reasons, whether it be insuring multiple vehicles, bundling policies, being a long-time customer, installing dash cams, equipping your home with security features, and more!
Increase your deductible amount
The deductible is the money you pay out of pocket to your insurer when filing claims before your insurance company pays for the rest and your insurance policy kicks in. By choosing a higher deductible, you can save money on your premium by taking on more financial responsibility in the event you need to file a claim.
Contact BrokerLink for your insurance needs
Whether you’re looking for home, auto or business insurance, BrokerLink can help. Our brokers will take the time to get to know you and create a customized plan just for you. Looking to reduce auto insurance costs? We'll help you make it happen!
With locations across Canada, there's a chance that BrokerLink may be in your neighbourhood! To learn more about auto insurance rates, home insurance, or another insurance policy, feel free to come visit us in person at any time! If you can make it into our office, give us a call to speak with an insurance broker over the phone.
Alternatively, if you're looking to compare rates and avoid higher prices for insurance coverage, use our online quote tool from the comfort of your own home or while you're on the go!
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FAQs: Why did my auto insurance premium increase?
What is uninsured motorist car insurance?
Uninsured motorist coverage is mandatory auto insurance for Canadians in most provinces and territories. Essentially, this car insurance protects motorists in the event they are involved in a car accident with another driver who does not have enough insurance to cover their claim or is completely uninsured.
Another portion of this car insurance policy is that it will protect you should you be involved in a hit-and-run collision where the other driver flees the scene. The goal of this vehicle coverage is to ensure drivers are able to be fairly compensated following an incident, so you don't have to pay out of pocket for other drivers' behaviours.
Is it illegal not to report an accident?
Whether or not reporting a car accident is illegal or not really depends on the province and territory you live in, as well as the circumstances surrounding the incident that took place. For example, in Ontario, you need to call the police if the total damage between both vehicles or property is over $2000, if injuries or fatalities have occurred if there is an impaired driver, or if the driver left the scene if the collision involves a pedestrian, government vehicle, or cyclist.
As a safe driver, it's your responsibility to learn the rules and regulations in your province or territory so you know how to respond appropriately following an incident.
Do I need to call my insurance company after a minor vehicle accident?
Calling insurance after a minor accident is always recommended. A lot of the time, the effects of the incident, whether it be damages to your car or injuries, are not immediately felt or seen right away and often manifest within the next couple of hours or days. So, if you haven't reported your collision to your insurance provider, then there's a high chance you've missed the reporting period and will not be able to receive compensation from your car insurance and accident benefits coverage.
Another reason why you should report your collision, even if it's minor, is that the other drivers involved may not have enough auto insurance to cover your compensation costs—again, leaving you responsible for paying any damages or repairs out of your own pocket.
What should I do if I've been in a car accident?
You may be wondering, "What to do if you're in a car accident?" Ultimately, the best thing you can do is remember to stay calm and assess whether you or others involved need medical assistance. Next, it's up to you to determine whether reporting a car accident is needed in your scenario. Remember that your local rules and regulations are in accordance with the province or territory in which you live. Afterward, make sure to document the scene and exchange information with others involved. Once you're at a safe location, you can then go ahead and inform your auto insurer.
How long do traffic tickets and other claims stay on your record?
The amount of time traffic tickets remain on your driving record and impact auto insurance rates will depend on which province and territory you live in. For example, tickets can remain on your history anywhere between three to six years from the date of your conviction, which means the day you pay your ticket off.
What does shared fault mean?
In a collision where more than two or more vehicles are involved, "at-fault" is a term used in the auto insurance market to determine who is essentially "responsible" for the incident. Determining fault is important as it may impact who is required to financially compensate the other driver involved. So, what about shared fault? Shared fault, also known as shared liability, occurs in scenarios where determining fault may not be as straightforward. In this case, both drivers will share liability for the collision.
What does a standard home insurance policy include?
When purchasing home insurance, the main policies included in this coverage include contents coverage, liability insurance, and additional living expenses. However, there are optional coverages you may want to consider to ensure that your home and personal belongings are comprehensively protected against insured risks.
Is home insurance mandatory?
No, home insurance in Canada is not mandatory like how it is for car insurance. That said, your home is a big investment, which you'll want to protect at all costs regardless. By having a home insurance policy in place, you can have peace of mind knowing that you're protected against the unexpected.
If you have any questions, contact one of our local branches.
