Car insurance rates in Alberta are higher for some drivers than for others, and consumers have a right to know how they’re evaluated by insurance providers. Understanding how vehicle insurance rates are determined can help you get the coverage you need at a price you can afford, and knowledge is an essential tool when you’re shopping around for a new policy.
The first factor that determines your car insurance rates is the type of coverage you’re getting. In Alberta, you have four main options in this regard:
- Standard (basic) coverage. People in all Canadian provinces are required to carry mandatory minimum coverage, which provides a set level of financial protection if the driver’s actions cause injury or property damage.
- Liability coverage. Liability coverage provides for the costs of legal action against in the case that you are found responsible for property damage or injury while operating a vehicle. In Alberta, the minimum third-party liability amount is $200,000.
- Collision coverage. Adding collision coverage to your policy gives you two-way protection in the event of injury or property damage, covering you and your vehicle as well as others and their property.
- Comprehensive coverage. A comprehensive policy covers you from all possible perils, except for those that you choose to specifically exclude.
Standard coverage is the least expensive option, while full comprehensive coverage usually carries the highest premiums. However, with standard coverage you will be left to shoulder any costs that exceed your policy limits out of pocket if you’re involved in a major crash, which, given the cost of vehicles today, can number in the tens of thousands.
Your Deductible Plays a Factor in Your Car Insurance Rates
The next factor that influences the end cost of your premiums is the deductible. A deductible is an amount that is automatically subtracted from any payment your insurance company makes on a claim. For example, if you have a policy with a $500 deductible and you make a claim of $1,000, your insurance company will cover the claim minus the deductible, giving you a $500 reimbursement.
Most policies come with a minimum $500 deductible with the option to increase. Increasing or reducing your deductible is one of the most common ways people adjust the cost of their monthly premiums.
Additional Factors that Determine Your Car Insurance Rates
Moving beyond policy types and options, insurance companies also assess the specific risks you pose. At this point, they consider factors including your driving record, your home address, where you store your vehicle, and what type of vehicle you drive, among others.
Here’s a closer look at how each factor influences your costs:
- Driving record. Insurers consider not only how safe your driving record is, but also how long you’ve been driving. More experienced motorists qualify for lower rates, especially if they have proven safety records.
- Where you live. Insurers consult statistical tables to determine how likely a vehicle is to be stolen in your neighbourhood. The higher this risk, the higher your premiums.
- Where you park at night. Do you park on the street, in your driveway, or in a covered garage? These pose varying levels of risk in terms of vehicle damage and theft, with garages being safest.
- What you drive. Some makes and models are hot targets for thieves, while others are more valuable and carry a higher replacement cost. High-performance cars are also considered riskier from an insurance perspective, and the Insurance Bureau of Canada can help if you’d like to know how your vehicle stacks up.
Do You Qualify for Any Discounts?
Some insurance companies also offer discounts to customers who:
- Complete advanced driver training programs
- Have multiple policies with the same provider
- Belong to certain professions or organizations
- Are married
- Have high grades in post-secondary
These discounts aren’t always offered automatically, so be sure to ask about them before finalizing your new policy.
Trust Lane’s Insurance for Excellent Coverage at Highly Competitive Rates
Finally, you should also remember that insurance brokers are uniquely positioned to help you secure the lowest possible rates. Brokers can get insurance companies to bid on your business, helping drive your costs down all while providing you with excellent customer support and complete resources.
The experienced and caring brokers at Lane’s Insurance are here to help you with all your auto insurance needs. Get started by visiting Lane’s for a fast, free auto insurance quote.