If you’re like most people, you want to keep your car insurance rates as low as possible. One of the easiest ways to do so is to compare quotes from several insurers each year to make sure you’re receiving the best price for your coverages. You should also do everything possible to keep your driving record free of blemishes. That means driving safely and acknowledging the road rules of your province or territory.
Each day, countless vehicle incidents result in higher premiums for drivers. Some can be avoided. Unfortunately, others can occur even if the owner of the car is nowhere in sight. We’ll cover several such incidents below. Keep in mind that each one will affect your rates differently.
Your Vehicle Gets Stolen
Auto theft is covered by your comprehensive coverage. This feature is optional. If you don’t have it on your policy, and your car is stolen, your insurance company is unlikely to cover the loss. You’ll be responsible for replacing your vehicle in the event the police are unable to recover it.
Suppose you have comprehensive coverage and your car gets stolen. After paying your deductible, your insurer covers the loss. Will your rates rise? After all, the theft wasn’t your fault. Despite what many people think, the answer is “probably.” From your insurance company’s perspective, the event increases the risk you’ll submit a future claim.
Your Car Is Vandalized Or Otherwise Damaged
Any type of damage to your vehicle that is unrelated to an accident is covered by the comprehensive portion of your policy (similar to auto theft). This includes damage from vandalism, floods, fires, and even falling rocks. If any of these non-accident events occur, you would submit a claim to your insurer for compensation to pay for repairs. The question is, would these types of claims cause your premiums to rise?
This depends largely on your insurance company. Some companies will keep your rates steady after a single comprehensive claim, but raise them if you submit several in quick succession. Others may increase your rates after the first incident. This is a good reason to shop around when looking for coverage.
You Cause An Accident
An at-fault accident will almost always result in a rate increase. Moreover, that increase will apply for at least a few years, and possibly as many as six. The exception is if your insurance company offers accident forgiveness, a feature that protects your premiums in the event you cause a collision. Not all companies offer it. Those that do offer it only to policyholders with clean driving records.
Without accident forgiveness, you can expect your premiums to rise after an accident. The amount by which it does so will be based on your insurer, your driving record, and the circumstances surrounding the collision.
You Commit A Minor Traffic Violation
Running a stop sign, making an illegal turn, and driving without your seat belt are relatively minor violations when compared to speeding and drinking and driving. But they will still result in tickets, points, and fines. Each infraction increases the risk for your insurer, and thus is likely to cause your premiums to rise.
Even if you “forget” to mention minor traffic violations to your insurance company, it will eventually find out about them. The tickets are listed on your driving record, which your insurer checks periodically. Your rates may remain steady for several months, but will increase once a routine check is conducted.
You Get Caught Breaking The Speed Limit
Speeding is obviously risky driving behavior; it increases the likelihood of an accident in nearly every circumstance. For this reason, if you receive a ticket for breaking the speed limit, your insurer will likely charge you more for your coverages.
It’s worth noting that speeding by a few kilometers per hour is far less serious than breaking the posted speed limit by 50 kilometers per hour. The infractions are treated differently, not only by the police and courts, but also by your insurer. This will affect the amount by which your rates rise.
You Are Convicted Of Driving Under The Influence
Driving while impaired by alcohol or drugs is a major offense. Not only will it result in the loss of your driver’s license for twelve months, but you’ll also need to pay a hefty fine.
Insurance companies treat DUI convictions very seriously. There are few behaviors that imply as much risk as the decision to operate a vehicle while intoxicated. Most companies will increase the policyholder’s premiums by a substantial amount – in some cases, double or triple the individual’s previous rates. Some companies will simply cancel the policy, or refuse to renew it when it expires.
The most important thing to remember is that insurers treat the above incidents according to their own predictive risk models. That means they do things differently from one another. Thus, when your policy is about to expire, shop around to ensure you’re getting the best deal possible for the coverages you need.