Car insurance: I cut my costs $300 by asking

When I set up my budget for the year, I noticed that I decided I was spending too much on car insurance.  I've been using the same insurance broker for years, but my premiums keep rising.

I looked at ways to save, put together a list of discounts that might apply to me, and then called up my broker to negotiate.  I managed to lower our premiums by over $300 this year.

Here are eight ways to save on car insurance:

Shop around – Get a few car insurance quotes online and contact at least one local insurance agency for a quote over the phone.  Try services like InsuranceHotline.com and Kanetix.ca.

Bundling discount – Insure your home with the same company and save an additional 10 per cent off your car insurance. Having several vehicles with the same insurer can also save you 10 per cent or more.

Higher deductibles – Increasing your deductibles by $250 to $500 can reduce your collision and comprehensive costs by 15 to 30 per cent.  The trade-off is you’re required to pay more for small claims.  By increasing your deductible you avoid unnecessary coverage.  Since small claims increase your car insurance premiums, filing fewer claims will reduce the chance of your premiums rising in the future  For an above average driver, the savings in premiums should more than pay for your claims over time.

Avoid collision on older cars – Collision coverage protects damage to your own vehicle, but if your car is worth $2,000 or less, will you really salvage it after a major wreck?

Low mileage discount – Insurance companies offer a discount for low mileage drivers.  This applies to drivers with a short daily commute of 10 or 15 kilometres.  The discount also applies to your second vehicle which may not get out on the road as often.  Ask your insurance company if the low mileage discount applies to you.

Good driving record – Being accident and ticket free over the past 10 years has saved me between 5 and 20 per cent on my premiums.  Savings kick-in after three years of accident and ticket free driving.

Cheaper car – Expensive cars cost more to repair and therefore cost more to insure.  Check the insurance rates before you decide to buy a new car.

Pre-pay – Most insurance companies charge up to 3 per cent to set-up a monthly payment plan.  Avoid this fee by pre-paying your insurance at the start of the year.

Consumers can find ways to lower their car insurance rates by taking advantage of available discounts and taking the time to understand other cost-saving options. 

We now pay less than $1,150 per year to insure two vehicles.

Also Read:

Why insurance costs more in Brampton

Why more insurance is costing me less

Robb Engen is half of the Boomer & Echo personal finance blogging team with his mother, a former financial advisor.  Reach him at robbengen@gmail.com