Do Insurance Policies Vary In Canada?

It is against the law in Canada to drive a car without insurance and with 35 million drivers on Canadian roads, there are hundreds of car insurance providers to meet the demand. With so many options available, it can be hard to choose between them. But does every car insurance company in Canada offer the same terms? 

What are the factors that dictate the cost of insurance? In this article, we look to answer these questions.

Different Rates Depending on Location

The first factor that will be taken into account when Canadian insurance companies are calculating the rate to offer will be where you live. A few considerations come into play here including how densely populated the city is, how many cars are on the roads, the crime rates where you live, and the typical weather conditions.

You should do your research and find out the typical rates in whatever city or province you live in. One can simply go online and find a site that will allow them to calculate insurance rates from providers that are based in their localities, and there are similar resources offering the same for other locations all over Canada.

If you live in a town or province where there are fewer people, less traffic, less crime and not too many snow days, typically, car insurance rates will be lower. On the other hand, if you live in a big Canadian city with lots of cars and people where there is snow most of the year and where car theft is common, your insurance premiums will be higher.

Different Rates Depending on the Driver’s Age

Another factor that insurance companies always take into account when calculating your insurance is the age of the driver. If you are a young driver, your insurance policy will typically be more expensive because young drivers are more likely to get into accidents.

Insurance companies believe that young drivers lack experience and will tend to drive faster than older drivers and so, to mitigate the greater likelihood of having to make a payout, the insurance companies raise their rates. 

Different Rates Depending on What Kind of Car You Have

Another major factor that causes insurance policies in Canada to vary is what kind of car you are getting insured. AS a basic rule of thumb, the more expensive and powerful the car, the more expensive your insurance policy.

This is because if something happens and the insurance company has to pay out to have your car repaired or replaced then it will be more expensive. Also, if your car is very powerful and has a high top speed, the possibility of speeding is greater and therefore so is the likelihood of a crash.

Different Rates Depending on Your Driving Record

As well as the driver’s age, car insurance companies will also check your driving record to see if you have been in any accidents previously. If you have never had to make a claim on your insurance then you will have multiple years of ‘safe driver’ or ‘no claims’ bonuses which will significantly reduce the rates you are offered.

Typically, these kinds of bonuses are not available until drivers reach the age of 25 which is the age when most companies do not consider them young drivers anymore. Another way your driving record can reduce your premiums is if you can prove with your odometer that you do not drive your car very often or on long journeys. The less the car is driven, the cheaper the insurance policy. 

Different Rates Depending on Where Your Car is Parked

The last factor that will dictate the price of your insurance policy is where you park your car, both at home and when you are at work. If your company is in a safe area and has a private car park with security cameras or guards, then your policy will cost you less.

Likewise, if you have a private driveway at home, your insurance policy will be cheaper than if you park your car on the street. It is important that if your circumstances change, like your residence or employment, that you notify your insurance company so that they can reevaluate your rates.

There are many factors that affect the rates of car insurance policies in Canada so it is important that you check out all the different providers to find the best deal for you. Make sure that you read all the small print and understand every detail of your policy so that there are no unpleasant surprises if the need to make a claim arises.

Consider all the different factors we have laid out in this article and it will give you a good idea of what to expect when applying for new car insurance.