As you probably know, having auto insurance with a coverage of at least $50,000 is required for all vehicle owners in Québec. While Québec automatically offers every resident a so-called public insurance plan, known as the Société de l’assurance automobile du Québec (SAAQ), this kind of coverage only applies to injuries obtained by being involved in an accident with a car. So if you’re on your bicycle and you get hit by a car, for example, you could receive compensation via this plan.
However, this kind of plan doesn’t cover damages to your car or someone else’s car, which is why you need private auto insurance. And while having auto insurance is not only a legal necessity but a good idea if you want to save yourself thousands of dollars in the case of an accident, no matter how small, not all insurance premiums—meaning the amount you pay each month to your insurance provider—will be the same. While different insurance providers will charge different premiums depending on what kind of coverage you’re looking for, there are several factors that will affect how high your premiums are, regardless of providers.
Here’s a look:
1. The Car Itself
What kind of car you have will directly affect your monthly premium. When calculating your rate, an auto insurance provider will ask about your car’s model, make, the year it was built, whether it was customized, and more. An older car with specialized equipment may be more expensive to repair, since the replacement parts may not be easily obtained. Similarly, a souped up coupé with loads of features may also drive up your premium, since an expensive car is more expensive to repair or replace if required
2. Your Driving History and Personal File
Another important factor that affects your premium is your driving history. Your insurance provider will ask you many questions about your driving habits and history, including:
- How long have you been driving? An inexperienced driver may need to pay a higher premium.
- How old are you, and what’s your gender? While it may seem unfair, insurance providers will take your age and gender into account when calculating your premium. In Canada, women tend to pay slightly less for auto insurance than men. So if you’re a young male driver looking for insurance, the chances are that your premium will be higher since insurance providers will assume that young men are more likely to engage in riskier activity while driving.
- Have you had any claims/accidents before? A history of getting into accidents or filing claims will affect your premium negatively.
- How often do you use your car, and what do you use it for? If you use your car every day to drive to work and tend to cover a lot of kilometers, insurance providers may see a higher risk for accidents and raise your premium. Someone who only uses their car on the weekends to run errands will have a lower premium.
- Does someone other than you use your vehicle? If you’re not the sole user of your car—meaning if your adult child sometimes uses your car or if you let your sister use it to pick up her kids from daycare occasionally—your premiums will be higher since there’s more risk involved.
3. Your Place of Residence
If you live in a city, your insurance provider may charge a higher premium. That’s because the risks of theft, vandalism, accidents, and regular scrapes and scratches are considered to be higher in a city. If you live somewhere remote where there’s less traffic, the chances of getting into an accident are considered to be lower, thereby affecting your premium.
4. Your Chosen Coverages and Deductibles
As is the case with every type of insurance, how much you wish to have covered and what kind of deductible you go for will affect your premium. While the only requirement in Québec is that your auto insurance covers a minimum of $50,000 for so-called civil liabilities, you can add more coverage that’s more suitable to your situation.
That minimum $50,000 coverage is also called “one-way insurance” because it only covers any damages you have caused to other people or property. So if you’ve overestimated your parallel parking abilities and scratch your neighbor’s car in the process, or knocked over someone’s mailbox, your insurance will cover the damages. If you’ve injured someone and their medical costs for some reason aren’t covered by SAAQ, then this civil liability coverage will kick in as well.
Then there’s the optional coverage. This is a sort of add-on that insurances offer in addition to the mandatory civil liability coverage. Depending on the provider, this kind of coverage can include damages to your car, even when you were at fault. Some insurance providers may also cover damages to your car that weren’t caused by an accident but were instead caused by natural forces such as fire, vandalism, and theft. As always, you should read all policies and coverage options carefully and decide what risks your car may face in the area you live in.
Deductibles can also affect your premiums. Some insurances require that, in the case of a claim, you first pay a certain amount—the deductible—before the insurance kicks in and takes over. The higher the deductible, the lower your monthly premium usually is. While this sounds good at first, make sure you choose a deductible you can actually afford—in the case of an accident, you don’t want to suddenly face a giant bill you don’t know how to pay.
As you can see, choosing the right auto insurance depends on a number of factors, and a high premium can sometimes be unavoidable if certain factors simply aren’t in your favor. However, at YouSet we strive to find the best auto insurance price for you and your needs. Check us out!