back to articles | July 30, 2021 | Arthur Brown

Categories: Useful Automotive Information

7 Key Factors That Affect Your Car Insurance Rates

Almost everywhere in the world, you must have car insurance before taking a vehicle on public highways. In Canada specifically, you must have at least a mandatory level of coverage. However, some provinces require different additions on top of this.


But, what can make your car insurance more or less expensive? There are a surprising number of things taken into account when you apply for car insurance. Below, you will find seven of the most important factors that will affect your car insurance rates. If you’re looking to insure a car, read on to find out everything you need to know.

Type Of Coverage

As mentioned, every province in Canada has a mandatory minimum coverage requirement. However, there are various coverage options on top of this. These include liability insurance to cover others and their possessions, your own personal accident medical cover, or collision insurance for the vehicle itself.

It goes without saying that the more options you request from your insurer in terms of coverages, the higher your rates tend to be. However, not having them could leave you with a much higher bill if you do happen to be involved in a collision. So, think wisely about which you feel you should be adding, while also making sure you are hitting your area’s minimum insurance requirements.

Your Age

Believe it or not, your age plays quite a large part in an insurer’s pricing. It is widely known that most accidents that happen involve young, newly qualified drivers. So, it makes sense that insurers hike the premiums up for younger drivers, as they are more likely to cost the insurer money. There’s then a gradual decline until late middle age, where premiums can start to creep back up slightly due to older people being, once again, more at risk on the roads.

Your Gender

Gender also plays a huge part in the decision-making for insurers, often whilst being cross-referenced with a customer’s age. Sadly, it’s most commonly young men who get involved in accidents or are the more erratic of drivers. This leads to huge price differences between teenage boys and girls when it comes to insurance rates. On the whole, women tend to drive slower - and have smaller cars - so often get lower premiums throughout life.

Driving Record

If you claim on any insurance policy, that claim sticks around for a little while. This is to help insurers understand what kind of driver you are, your risk profile, and your driving history. So, if you have had accidents in the past, your insurance rates are likely going to be pushed a little higher. However, if you have a squeaky clean driving record and no recent claims, you’ll get a much cheaper rate each time you apply for a new policy.

Where You Live

Somewhat unsurprisingly, where you live affects how your premiums are priced. Basically, the insurance company will take into account how much crime and how many accidents there are in your area. If your car is often parked on the street in a neighborhood with multiple car thefts reported, they will probably look to charge you more for the insurance. On the other hand, if you have a car parked in a garage in a quiet neighborhood, you’ll see lower premiums.

Your Chosen Car

It almost goes without saying, but the car you choose has an impact on how much the insurance may cost. If you decide you want to drive a 3-liter turbocharged sports car, your insurer is going to view you as a higher risk. If you drive a small electric car, you’ll seem less risky. It’s as simple as that - big and fast, more expensive. You can always refinance this car to save money.

Deductible Amount

Insurance premiums have deductibles. That is the amount of money that you will have to pay when you make a claim, or the minimum amount that the insurer will payout. So, if your deductible is $250 but you make a claim for $1,000, your insurer will give you $750. If your deductible is $1,000, you’ll receive nothing. A higher deductible brings your rates down, as it means in the event of an accident, your insurer will pay out less. Balancing out the risk and reward is your decision.

These are the main factors that contribute to the overall cost of your insurance policy. Take note of these, as some you may be able to have a little bit of influence over. Others, like your age, are not things you can change. But, as you age and spend longer behind the wheel, you’ll see that price slowly drop!