How you can lower car insurance costs

Here a few things that may help you reduce your bill when your policy comes up for renewal.

As usage-based insurance programs are gradually rolled out in Ontario, they will offer one way to reduce the cost of insuring your car.

The average annual saving will likely be in the 10-to-15 per cent range, if you’re prepared to have a GPS tracking device installed in your car, give up some privacy and trust your insurer not to misuse the information it collects about you.

The technology is widely used in Europe and the U.S. and insurers here will gradually unveil products that are tailored to special groups. We may see some this spring when more of these plans become available in Ontario. For example, drivers with good records, who drive infrequently and live in a rural area with low claims rates, could end up with larger discounts. Drivers with terrible records, who may be almost uninsurable, could get a new life by allowing companies to monitor how they drive now.

In the meantime, anyone who drives in the GTA is looking for ways to trim their bill. The provincial Liberals say they are moving closer to meeting their pledge to reduce Ontario insurance rates by 15 per cent. Last Tuesday, they introduced legislation aimed at combating fraud and speeding up dispute settlements.

Finance Minister Charles Sousa said car insurance costs have fallen by an average of 4.66 per cent since August 2013, when the deal was made with the NDP. He said last week’s measures should help him meet his target of a year-over-year drop of 8 per cent by this August with the full 15 per cent coming within a year.

Related: Car insurance relief for young Ontario drivers in sight

If your policy is up for renewal, here are some things you can do now:

Shop around : It seems obvious, but comparison shopping is something you should do every year, even if you’re happy with your insurer. Quotes from insurance companies differ widely because each company assesses risk differently. They all look at where you live, your driving record and the type of car you drive. But each has a different experience paying out claims in your community, so rates can vary significantly.

“I’ll go a mile for a shoe sale,” says Anne Marie Thomas, sales manager with InsuranceHotline.com, a website that allows you to compare quotes. “I should be able to take the time to go online or make a few calls for my car insurance.”

Thomas says InsuranceHotline represents about 30 companies. Its parent Kanetix, compares quotes from 58 Canadian insurers. A third online source is myinsuranceshopper.ca , run by the Insurance Brokers Association of Ontario. However, it refers you to a broker and does not provide quotes.

Broker pros and cons: A popular misconception is that your broker is able to find the best rate out there. Brokers typically represent half a dozen or so companies, so what you’re getting is the best of his bunch, not necessarily the best of the bunch.

Even so, brokers offer personal service and will likely know about your family circumstances and how that has changed. The person at a call centre knows nothing about you and may or may not know much about the insurance being offered. It all depends on the training.

For example, when I renewed my policy with TD Meloche, the agent could not know my wife no longer drives to work or that my daughter has an apartment downtown and no longer needs to be on the policy. Both lead to discounts.

Ryan Michel, chief actuary with Allstate Canada, says buying insurance is not just about price. It’s also about making sure you get what you need.

“Shopping around is important,” he says, “but I would reach out to my current provider first and then have a look at other carriers.”

Related: 10 things you need to know about car insurance

Other things : You can also look at raising deductibles and removing unneeded coverage. Bundling car, home and other policies will also help. As examples, Intact Insurance says on its website that bundling will save 15 per cent on your car policy and 12 per cent on your home policy. Grey Power , an insurer which targets those over 50, offers a similar package.

Many insurers offer a 5-per-cent discount if you drive with winter tires. Other discounts apply for hybrid vehicles and anti-theft devices.

And here’s one you might not think of: Check if you are eligible for group insurance through your employer, union, professional or alumni association, says Joe Daly with Desjardins. Group insurers generally offer better rates, he says.

More articles by Adam Mayers

Reach Investing & Personal Finance editor Adam Mayers at amayers@thestar.ca

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