What You Need to Know About Your Auto Insurance Rate

Huestis Insurance Group • Jan 10, 2023

Understanding the Cost of Car Insurance 

Are you seeing an increase in your car insurance rate, or wondering why it isn't going down as you gain more driving experience?  As a general trend, car accidents are becoming more frequent, more severe, and more costly. Here we'll break down why rates are increasing, and some of the ways in which you can control your cost. 

Brokers are consumers too - which is why we want to help our clients understand the reasons behind rate increases in the insurance industry!

How Does Insurance Work?
To better understand why rates are increasing, it's important to understand how insurance works. Insurance is built on the foundation that the contributions (premiums) of many, pay for the losses (claims) of few. This means that even if you have a perfect driving record with no accidents or moving violations, you may be seeing insurance rate increases based on the trend of claim payouts.  

What Factors Influence the Overall Cost of Insurance?
Currently the insurance industry is facing several challenges which are impacting insurance rates:

Severity and Frequency of Accidents  
Distracted driving is being linked to more frequent and more severe accidents. Reports indicate that there are often no signs of stopping or slowing down in accidents involving distracted driving. This means more severe injury and damage, and higher insurance payouts.  DYK: 8 out of 10 accidents are now attributed to distracted driving. 

Cost of Repairs 
The cost of repairing a vehicle is becoming increasingly more expensive as vehicles become more complex. Features such as traction control, lane and parking assist, tire pressure sensors, in-car WIFI, and central computer capabilities, all lend to higher costs of repair following an accident. A side mirror that may have cost hundreds of dollars to replace in the past, could now cost thousands due to sensor technology. 

Insurance Fraud 
Insurance Fraud is a growing and complex that hurts consumers and businesses. Fraud can include situations where claims are made for previous damage to an automobile, along with damage from a new accident; claims for non-existent injuries; and claims for accidents which never happened. Auto insurance fraud is under investigation throughout Canada as it is leading to higher and invalid payouts, and therefore increased insurance rates for Canadians.  

How to Control Your Rates

Now for the good news! You can control your insurance rates. Here are some easy ways to save on your car insurance premium:


Bundling your Home and Car Insurance

Combine your property and automobile insurance for the best discounting. Some companies offer up to 15% discounting per vehicle for combined policies. You can also maximize on bundling discounts by insuring multiple vehicles with the same company.


Protecting your Driving Record

We recommend purchasing Accident Forgiveness so that your first accident won't be held against you. This coverage could save you hundreds of dollars as an at fault accident stays on your insurance record for 6 years.  And, be selective and cautious on who you allow to drive your vehicle - when you lend your vehicle, you lend your insurance.


Leveraging your Credit Score

Many insurance companies are now offering credit score discounting. If you have a high credit score, you may eligible for up to a 25%* discount!  Since a credit check cannot increase the cost of your insurance, and the soft credit check does not impact your credit score,  we strongly recommend taking advantage of this discount.  Learn more about Credit Scoring and Insurance.


Policy Reviews

Regular reviews can save you money and help you to identify any coverage gaps. Let your Broker know about any changes in your occupation, daily commute, drivers in your household, and annual mileage to ensure your rates are up to date and accurate.


Knowing when to Make a Claim

Insurance is meant to be there for you when you need it, but there are times when we will recommend that you consider covering the cost of repair for small accidents yourself to avoid impact to your driving record.  We would only recommend this when there is absolutely no risk of injury. Compare the cost of making the claim in terms of future rates, against the cost of the repair. Anytime there is risk of injury, you should submit a claim to your provider.


Consider Usage Based Insurance

Some insurance companies are making an effort to personalize insurance rates and reward good drivers through technology called Telematics. Prior to this new technology, insurance companies grouped together all drivers into broad categories. Telematics offers usage based insurance which tracks individual driving habits including your acceleration, hard braking, time of day driving, and daily kilometers to assess your personal risk factor. This technology works through a mobile app. and can save you up to 25%-30% on your insurance rates, plus a standard enrollment discount.


Talk to Us! As the trend of higher insurance rates pushes forward, an Independent Insurance Broker will help you navigate and control the rate you pay. Huestis Insurance Group is Atlantic Canada's largest Independent Insurance Broker, and is backed by the best insurance companies in Canada. 

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