Shopping for a new auto insurance policy can be quite the difficult process. But whether you’re interested in saving a few bucks, unsatisfied with your current insurer, or just got a new car, shopping for auto insurance in Canada is often unavoidable.
You don’t have to struggle to shop for auto insurance alone. With this guide, you can get a great rate, choose the right company, and ensure you’ve got the coverage you need. Here are some tips on how to shop for auto insurance in Canada.
1. Understand How Much Coverage You Really Need
The first step to buying auto insurance is to understand how much coverage you need.
In Canada, you must have liability insurance to legally drive. Liability insurance covers damages that another driver may suffer if you hit them and are found at-fault.
Collision insurance is often mandatory for vehicles which you do not yet own – such as a leased vehicle. Collision insurance covers your damages if you’re involved in an accident.
Comprehensive insurance covers damage and loss that is unrelated to traffic accidents. This can include theft and vandalism, as well as natural disasters and extreme weather, such as hail damage.
A liability-only policy is the least expensive coverage option. Collision insurance and comprehensive insurance are more expensive, but may be worth the investment if you drive a more expensive vehicle.
2. Build a Budget
Next, you need a budget. Typically, you’ll want your car payment and insurance to total 10-20% of your monthly income. For example, if you make $40,000 a year after taxes, spending $480 a month on driving expenses is a good target to hit.
With the cost of your current car payments in mind, think about the budget you have for car insurance. This can help you determine whether or not comprehensive insurance is right for you, and how much liability coverage you’ll want to buy.
3. Collect Your Information
You’ll want to collect your important personal information before shopping for insurance. Have the following ready:
- Name and address
- Date of birth
- Type, year, model, and make of your vehicle
- Vehicle Identification Number (VIN)
- Vehicle ownership status
- Driver’s license number
- Auto insurance history
While not all of these documents are always necessary, having them on-hand when talking to insurance companies makes it much easier to get a quick quote.
It may also be wise to make a note of any modifications or safety features added to your car, such as an alarm or a wireless RV backup camera.
4. Research to Find a Good Insurer
Don’t just settle for the lowest possible rate. Not all insurers are built alike – and if you choose a cut-rate insurer, make sure you do your research and evaluate factors that are important to you, such as: good customer service, ease of accessibility and the coverage offered.
So don’t just account for cost. Do some research on insurance companies, read online reviews, and see how other customers have been served when they’re filing a claim.
Asking friends and family about their experiences with their insurance companies is also a good idea. They can provide you with first-hand information about the process, and whether or not it was easy to get the money they deserved.
Once you’ve found a few promising companies, it’s time to start getting insurance quotes.
5. Get Quotes from Multiple Companies
Each insurance company will likely offer you a different rate – even if you are applying for identical levels of coverage. This is because each insurer has their own method of calculating your insurance rates, based on:
- The value of your vehicle
- Your driving history
- Your address
- Your desired level of coverage
- Discounts and rewards programs
- Optional programs (such as safe driving monitoring devices)
Because of this, it’s a good idea to get quotes from at least 3 companies. An easy way to compare multiple insurance quotes is using an online tool. They allow you to fill out a form once and give you quotes from multiple insurers as if you filled out the forms individually per insurance site.
Shopping for auto insurance isn’t easy – but with these tips, you can simplify the process, and make sure that you get the right coverage for your unique needs.