Auto insurance is sold in Ontario either through insurance brokers, agents or direct writers.
- Brokers sell insurance for more than one company and can provide you with price quotations from the companies that they represent.
- Agents sell insurance for only one company.
- Direct writers are companies that sell their insurance directly to consumers using a call centre instead of a sales force of agents.
Remember one thing. While the standard auto insurance policy is the same across Ontario, prices vary based on each insurance company's claims experience in the marketplace. You have to find the company that is in a position to offer you lower rates, based on its experience. Insurance is a competitive industry, and insurers do change their rates over time. The only way to ensure you have the best deal is to make sure you ask other insurers for the same coverage. Here are some tips for shopping around.
- Know what coverage you need. The minimum third-party liability coverage that you must buy in Ontario is $200,000. However, depending on your comfort with risk, you may want to increase it to $2 million in liability coverage. You may also purchase higher accident benefit coverages beyond the standard coverages which will allow you to customize your policy to suit your needs. Talk to your broker, agent or direct writer and ask for advice. Similarly, you may want to go without optional collision or comprehensive damage coverages, especially if your car is worth less than $2,000.
- Consider a policy with higher deductibles. Many consumers have remained with the standard deductible amounts of $300 or less. The Ontario government requires insurance companies to offer $300 and $500 deductibles for Direct Compensation-Property Damage Coverage, a $300 deductible for Comprehensive Coverage and a $500 deductible for the Collision Coverage. You can ask for an even higher deductible. Raising it to $750 or $1,000 may result in a lower insurance premium. Just be sure you can afford that deductible if you are in an accident.
- Ask about discounts. Many insurers offer discounts for insuring multiple vehicles on the same policy. Many offer discounts for mature drivers. From January 1, 2016, all insurers offer discounts if you install winter tires on your vehicle during the winter months. And most insurers offer a discount if you combine your personal property insurance or home insurance with your automobile insurance policy. You should also ask if your current insurer provides discounts to reward your customer loyalty. Ask you insurer how to qualify for any or all of these.
- Check out defensive driving courses. Some insurers provide discounts for new drivers who have taken these courses.
- Verify how you are using your vehicle. Are you still driving your vehicle to work, or are you using it only for pleasure? Insurers charge different premiums depending on the use of your vehicle and the distance travelled.
- Finally, don't switch insurance companies midway through the year. Wait until renewal time to avoid penalties for cancellation.