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If you’re a long-time reader of Y&T you might have wondered to yourself over the years why we didn’t have a definitive auto insurance post that we could guide readers to.  The reason for that is simply because I didn’t know much about auto insurance and how to get the best rates.

Growing up in Manitoba there was no need or reward for doing any research on the topic because we have a provincially-run insurance program that simply sets the rates for people in each demographic and there is very little choice involved.

After reading how much people are paying for car insurance in Ontario, I was pretty surprised to find out that the increased competition for every insurance dollar in Canada’s largest province hadn’t led to substantially lower rates than our government-ran monopoly.  The topic piqued my interest (that might be the first time those words were written about the scintillating subject of auto insurance) and here we are.

The Globe and Mail article revealed that, “Ontario has the highest auto insurance rates in Canada, with the average annual premium at $1,544.86 in 2012– 45 per cent more than in Alberta, the second-most costly.” 

Then the article went on to add, “The Consumers Association of Canada (CAC) deems private auto insurance to be one of the biggest rip-offs that Canadians face. After studying the industry for years, CAC concluded that a properly run public insurance system was the best choice, but found itself locked into a debilitating public relations battle with the private industry.

The CAC’s investigation of the insurance industry yielded interesting insights into the way it operates, and why costs are so high. In 2004, for example, CAC learned that private insurers had paid $290-million in secret commissions to insurance brokers who steered business their way. This practice had a direct impact on consumers – instead of hunting for the best price for their customers, brokers sold the policy that offered them the highest commission.”

So it appears the auto insurance tip that would have the largest impact is simply to move to a province that has substantially lower insurance costs!

Here in Manitoba and in neighbouring Saskatchewan there is little you can do if you want to pay less for auto insurance, but the good news is that we’re generally doing pretty well anyway.  This is especially true for folks like myself who fall into the “high risk” category, also known as young males.

Having spent a significant amount of time in vehicles with young males over the past decade or so, let’s just say I understand where the reputation comes from.  I couldn’t believe the rates that young guys get hit with in other parts of Canada.  The difference between what I currently pay and what I would pay in Ontario is enough to fund a two-week tropical vacation every year!

I’m Not the Cut and Run Type – So Now What?

If moving to Saskatchewan or Manitoba and enjoying “The Long Winter” (sorry, binge watching Game of Thrones right now) isn’t your thing, some other quick and easy ways I found to save on car insurance are:

  • Maintaining a good driving history – duh!
  • Pay your premiums upfront and on time.
  • Don’t buy coverage you don’t need. Become familiar with auto insurance terms such as liability, collision, comprehensive, all-perils, uninsured motorist, no-fault, accident benefits, and roadside assistance, so that you understand what insurance coverage has value in your specific situation.
  • Negotiate your car insurance as a bundle, using your significant other’s vehicle and other insurance options as leverage (no one wants to lose a home insurance policy over a few bucks on a car insurance deal).
  • Look for provincial discounts on risk-lowering purchases such as winter tires and anti-theft devices.
  • Choose an option with a higher deductible which lowers your monthly premiums – especially if you’re a low-risk driver.

Finally, just like with any other product on the open marketplace, the easiest and most effective way to save money on your auto insurance is simply to compare rates.  Twenty years ago this practice was monotonous and time consuming.

One would have to go to an insurance broker to get quotes, but could never be sure if the broker was truly giving the best rates or if they were being given incentives by specific insurance companies in order to recommend their plans first.  So then, in order to be a truly educated consumer, you would have to see multiple brokers, perhaps make several calls in order to see what could be negotiated directly with companies (sitting on hold for hours on end) before arriving at the best price for your situation.

Today, it is very simple to compare auto insurance rates online and sometimes you can get extra perks by doing that.  With ten minutes of browsing, a consumer can see what the entire marketplace is offering and choose the option that best fits their needs and budget.

A note of caution here: make sure that you are comparing apples to apples when you are looking at insurance coverage online and not only looking at the price of the monthly or annual premium.  This is a common mistake and leads to major misunderstandings when people don’t read the fine print.  If possible, use a rate comparison site that provides a filter that allows you to compare policies that are similar or even identical in order to get the true best value for your hard-earned cash.

Once you have determined the best plan for yourself, don’t be content to just blindly send your automatic payment to your insurance company for the next ten years.  Studies show that most brands in major industries (insurance included) do not reward loyalty.

This means that if you check in periodically you can see what offers are out there in order to get you to switch over to a new insurance provider.  At the very least you can use these offers from other companies to leverage yourself a better deal with your current provider. (A favorite tactic of mine when it comes to negotiating my cell phone bill.)

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