The Co-operators : Top 10 tips for managing insurance costs

GUELPH, ON, Dec. 4, 2006 – Insurance protects the financial security of our family and friends when they need it the most; but that doesn’t mean it makes for interesting dinner conversation. Having accepted the hard truth that not everybody finds insurance as interesting as we do, The Co-operators has developed a series of educational materials titled “Insurance 101” to help Canadians understand the fundamentals of insurance. In that spirit, we present The Co-operators top 10 tips for managing insurance costs.

  1. Compare apples with apples. With more than 200 insurance companies in Canada, the industry is very competitive. When comparing quotes, be careful. Consider not only the premium, but also what you’ll get for your money. One company may offer a lower price than a competitor, but if it’s based on less coverage or a higher deductible, it may not be the best deal.

  2. Get the coverage you need — no more, no less. Make sure you have enough insurance so that when you have to make a claim, you’re fully covered. However, there’s no point in paying for coverage you don’t need. If the value of your possessions is greater than the amount of contents coverage stated in your policy, for example, have it changed to more accurately reflect the cost of what you’re insuring. Anytime you make a major change to your home, such as a renovation or renting out a room, inform your insurer to make sure you’re fully covered.

  3. Consider increasing your deductible. A deductible is your “share” of the claim. The higher the deductible, the lower the premium.

  4. Ask about discounts. Many companies offer discounts, sometimes as high as 50%. Discounts for insuring more than one vehicle or for purchasing more than one type of insurance with the same company are two of the most common. Premiums may be reduced if you have approved anti-theft devices or for new drivers who have completed a driver training course. There are many possibilities, so check with your agent to make sure you’re getting the best deal.

  5. Ask about special reward programs. Some companies have programs to reward claims-free clients. For instance, the most cost-effective way to protect your auto insurance premiums from increasing due to a collision is to purchase “accident forgiveness” coverage, which is available in some provinces. Normally, when you have an at-fault accident, your premiums increase; however, your premiums are protected if you have this coverage. In some provinces, you may be eligible to receive this coverage at no extra charge.

  6. Be vigilant about safety. Your driving record is one of the main factors that determines the cost of your auto insurance. Driving carefully will not only keep you safe; it can save you money. Traffic violations and at-fault accidents will result in higher premiums. Speeding, failing to wear a seatbelt, neglecting to harness children properly in child car seats or booster seats may affect your premiums.

    You can control your home insurance costs by preventing a claim in the first place. Consider installing safety devices such as burglar alarms, locked windows, smoke detectors on every floor and deadbolt locks. They will enhance your safety and reduce the likelihood that you will have to make a claim.

  7. Consider insurance costs when buying a vehicle. Some vehicles are safer than others; some are stolen more frequently, and some are more expensive to repair. All these factors impact rates. The Vehicle Information Centre of Canada publishes a comparison of cars in terms of their relative insurance costs and their safety features. Checking these ratings before buying could save you in the long run. Remember that Ferrari you’ve had your eye on will cost more to insure than a Firefly.

  8. Adjust your driving habits. The more you drive, the more likely you are to be in an accident, and the higher your premiums will be. Consider taking public transit rather than commuting to work — it’s better for the environment and can save you money on gas and insurance.

  9. If you drive an older vehicle, think about collision coverage. Collision covers the cost of car repairs or replacement. It may not be a worthwhile investment if the car you’re insuring is worth less than $3,000, because the cost of repairing it may be more than the vehicle’s book value. Remember, if you go without collision, you are responsible for any repairs if you’re at fault in an accident, so weigh the risk carefully.

  10. Don’t change companies in mid-policy. Wait until the policy expires, because penalties may apply if you switch insurance carriers before then.

About The Co-operators:

Based in Guelph Ontario, The Co-operators is a group of Canadian companies focusing on home, auto, life, group, commercial and farm insurance, as well as investment products and property development. Owned by 33 Canadian co-operatives, credit unions, and like-minded organizations, The Co-operators has assets of over $6.5 billion.