While motor vehicle accident-related fatalities and serious injuries are trending downward in Canada due to many successful safety campaigns, car crashes are still a daily fact of life. With the number of licensed drivers reaching all-time highs, Canadian roads are busier than ever. Good Calgary car insurance coverage is a solid start, but it’s also important for drivers to maintain a reserve fund. This ensures that you’ll be able to finance repairs and other accident-related costs that may not be covered by your policy without having to disrupt your day-to-day budget.
How Deductibles Affect Your Budget
For some people, keeping monthly Calgary car insurance premiums as low as possible is the top priority. One of the most common ways drivers reduce their monthly vehicle insurance costs is by increasing the deductible attached to their policy. Your deductible is what you will need to pay if you file a claim, and your insurance company will automatically subtract its amount from your reimbursement payment. Although they may seem a little unfair, deductibles are a way insurance companies keep rates low for everyone. They lower the overall impact of a large claim to the insurance pool, and also ensure policy-owners will not make claims for trivial matters.
The standard Calgary car insurance deductible is $500, but all providers offer a range of options. The lower your deductible is, the lower the immediate financial hit when you file a claim. However, low deductibles will also increase the overall cost of your policy.
Here’s an example to help you understand how deductibles work, and why it’s especially important to keep a reserve fund if your policy has one:
Assume you were in an accident and your vehicle suffered $3,000 in damage. The damage is covered by your policy, but you have a $500 deductible. Thus, your insurance company pays out $2,500 of the $3,000, leaving you to cover the $500 deductible out of pocket. Unless you keep at least $500 in your reserve fund, you’ll have to find a way to come up with that money on the fly.
Maintenance Costs Add Up
Even if you have the most complete car insurance policy on the market, maintaining your vehicle is your financial responsibility. As this comprehensive article explains, automobile maintenance costs add up very quickly over time.
Recent consumer studies indicate that the average American household spends about US$820 on car maintenance and repairs every year. Adjusted at current exchange rates, that’s getting close to CAD$1,100 per year. On top of that, Canadian drivers have to factor in the cost of swapping their winter tires in and out each year.
By simply tucking away $100 per month, you’ll be able to build a reserve fund that will completely finance average vehicle maintenance costs. This will take the sting out of your expenses, regardless of whether they’re planned or unexpected.
Saving Money on the Road
If you’re having a hard time putting away an extra $100 every month, you can also trim your expenses by making some simple adjustments. First, make some changes in the way you get around by learning about green driving tips. Not only will green driving help reduce the environmental impact of vehicle use, but it also holds the potential to dramatically decrease your operational expenses.
Here are some other simple ways you can cut costs, both on and off the road:
- Avoid driving when it isn’t necessary; walk, bike, or take public transit instead
- Keep your vehicle well-maintained, with proper fluid levels, tire pressure, and clean filters
- Move your savings to a high-interest account
- Unload unused household items by having a garage sale
- Avoid making impulse purchases, especially expensive ones
- Eat at home more often, and dine out less often
- Look for inexpensive ways to keep children entertained. Most kids are perfectly happy to play cheap, simple games that activate their imaginations
- Cook in large batches and freeze or refrigerate leftovers for later consumption
- Turn off lights and appliances when they’re not in use
- Invest in a programmable thermostat to reduce home heating and cooling costs without sacrificing comfort
If you’re burdened with debt, it’s also a good idea to talk to your creditors about consolidating your credit cards, doing a balance transfer, or qualifying for relief-level interest rates.
Calgary Car Insurance From Lane’s: Get the Most from Your Coverage
For the most complete protection on the market, pair a comprehensive car insurance policy with umbrella insurance to ensure there are no gaps whatsoever in your coverage. The knowledgeable, caring brokers at Lane’s Insurance also help you save up to 20 percent by bundling your home and auto insurance together.
Get started today by visiting Lane’s Insurance online for a fast, free, no-obligation Calgary car insurance quote.