Like most things these days, computer algorithms play an important part in determining auto insurance rates. While no one expects you to become an expert in how these algorithms work, it is not all that difficult to understand the factors that can increase or decrease insurance rates. We are going to look at a number of surprising things that can have a strong influence on your premiums and some simple, practical steps you can take to hack the algorithms so that they work for you by giving you a smaller monthly premium on your Ontario car insurance.
The first thing you should do is start looking at your insurance history in the same way you consider your credit history. The types of algorithms that auto insurers use are not dissimilar to the one that credit ratings agencies use. They both try and rate the likelihood of future events from past history. While your credit history will look largely at how you manage debt and your auto insurance will look at your driving and claims history there is also a degree of overlap. It might be readily apparent that having your coverage cancelled for your driving will be a huge red flag, but you might be surprised to know that having your coverage cancelled because you failed to keep up the payments will also have a huge detrimental impact on premiums. If you find it difficult to make the payments on time because you are out of the country or for any other reason you might want to consider cancelling or suspending the policy yourself rather than having the insurer do it.
Where you live can also have a huge impact on your premiums. The general rule of thumb is that the more rural the area you live in the lower your premiums will be. This may make it very tempting to claim your cottage as your permanent address on your car insurance, but if your insurance company finds out you normally live and work in a city you will at best likely face a bill for the difference in premiums and at worst face lose of coverage and have to bear the entire costs of any accident. Do yourself a favour and don’t try this stunt, as you are likely to get caught and the costs will be much higher than if you were just honest.
If you are a cautious driver you might want to take advantage of some insurance carriers that will give you a discount if you install a GPS monitoring device in your car. While some people are reluctant to give up their privacy, if you’re the kind of steady driver, who is not prone to rapid acceleration and braking, being able to share this information with your insurance carrier could save you a substantial sum on your premium. They also track how frequently you drive and in what area, so if you drive the vehicle only occasionally and in mostly rural setting, you could also see a reduction in premiums when you renew. It all depends on how comfortable you are letting your insurance company look over your shoulder while you are driving.