2019/03/14
KBD Insurance

Permanently lower your car insurance premium

Car insurance Montreal – Who wants to save money on their car insurance?

I don’t think anybody will object to the question of this article! As a Montreal Insurance broker, we put a lot of emphasis on educating our clients about the do’s and don’ts of car insurance. While Quebecers have the benefit of choosing from a large pool of insurance companies who all provide competitive rates, the tips we are about to dive into will help you save money on your car insurance, regardless of which company you choose to do business with.

So, for starters, why have car insurance rates in Quebec been on the rise? Well, there are multiple factors that help contribute to this phenomenon. The number one reason is the fact that the average cost to repair a vehicle has increased significantly due to higher repair costs for new vehicles, which are packed with sensitive and expensive technology. To give you just a small example, the average repair bill for a fender bender in 2019 costs more than 25% in comparison to just 2015.

Even though Quebec is going through a market correction, car insurance in Montreal have always been and will continue to be affordable, especially in comparison to other Canadian provinces, due to the healthy competition amongst insurance companies. They are all competing for your business, so let’s dive into some habits that you can practice so that your car insurance quotes are as low as possible!

1 – Don’t treat your car insurance policy like a maintenance package

Claims frequency is arguably the most important factor when car insurance companies attempt to determine your premium. This is something at KBD we focus on tremendously when informing our customers; you want to look and treat your policy like a “just in case” type of product, not a maintenance package. What do we mean by this? We suggest to pay out of pocket for small nicks and scratches, especially if the bill is under $1,000. Why? Because your rates are determined by the actuarial data of insurance companies. Let us elaborate: when you make a claim, whether it be responsible or not, the insurance company will calculate that you are “x” percentage more likely to make a claim within the next “y” number of months or years. This will cause your premium to rise due to the fact that you are now (according to mega data) more likely to make a claim within a given period of time. Every company works essentially the same way; whether your car is insured through Desjardins Insurance, Belair Direct, La Capitale or Intact Assurance, they will all penalize you for claims frequency. Individuals with a higher claim’s frequency will pay higher premiums, regardless if your claims are considered at fault or not. This is why we suggest on using your policy for when it counts; you want to use your insurance for that $15,000 accident, not the $300 glass breakage claim.

2 – Consider using the mobile applications that benefit good drivers

More and more insurance companies are developing and perfecting mobile driving applications that collect your driving data and give you discounts based off of your driving habits. The downside? Well, they have your data. If they don’t like your driving habits? I think you know the answer. Insurance companies are not going to spend millions of dollars on R & D to just give away discounts; they are spending the money so that they can further segment their clients and determine who is profitable and who is not (based off the premium that they are paying). Bad drivers who claim more frequently should be paying more for their insurance premiums. Some clients find these applications are too much like big brother, but the reality is that insurance companies are improving their segmentation; they are more accurately able to determine a fair price for your insurance based off of further data points. Traditionally, an insurance broker like KBD Insurance would ask you for your annual KM driven, how many claims, how many tickets, etc. This data still helps determine your car insurance premium. Mobile driving applications take this to the next level, and trust me when I say, if you are a good driver, you will absolutely be rewarded for your good driving habits. More specifically, here is the data the Driving Applications collect on you:

Insurance is a pool of money; hence you pay a higher price due to other clients who drive more recklessly and claim for frequently. These driving applications have started the segmentation process where you will no longer going to be paying a higher premium due to Mr. ‘X” who has three DUI’s, two driver’s license suspensions and four claims.

3 – Increase your deductibles!

What is a deductible? It’s the amount that you pay out of pocket before submitting a claim to the insurance company. The higher your deductible, the lower your car insurance premium will be, as you are taking on more of the risk. As I mentioned under point one, we want our clients to use their policy when it’s worth it, like in the event of a total loss accident. If you have a deductible at $750, you are absorbing the first $750 of any accident, and the insurance company will reward you for this by giving you a lower premium. If you are someone who is not going to make a car insurance claim for under $1,000 or even $2,500, then we suggest on putting your deductibles to this amount!

4 – Have good credit!

Yes, this is not a typo. Having good credit will help you in all walks of life; getting a mortgage, purchasing credit cards, etc. This will also help lower your car insurance quotes. Actuarial data points to the fact that people who have good credit claim less, and hence will pay lower on their car insurance premium. This principle applies to home, condo, tenant and commercial insurance as well. And again, this will help lower your premium with every insurance company, from Desjardins Assurance to Intact Assurance.

5 – Insure your car and home with the same insurance company

Here are a few statistics. If a company insures just your car, the average life span of a car insurance policy (how long a client remains with the same company) is two years. When your home and car are insured with the same company, the longevity jumps to five years. When you insure your car, home and business with the same company, this jumps to nine years. A company like Intact Assurance will reward you for this loyalty, as actuarial data suggests that loyal clients claim less. You can receive up to 20-25% off your car insurance and your home insurance when everything is bundled together; discounts will also apply for bundling your spouse’s car with the same insurer.

To conclude, next time you type into Google “car insurance near me” to receive quotes, remember these five points to help keep your premium as low as possible. 😉

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