If you think your perfect (no accidents and no tickets) driving record is getting you the lowest possible car insurance rates: think again. There’s no question that you’ll be penalized by your insurance company for a bad driving record but you may be surprised about what else is impacting your premiums. You probably know that the type of car you’re driving has a bearing. For example, cars with a higher than average probability of being stolen will cost you more to insure (even if they are not luxury cars). The size of the engine, whether the car has 2 doors or 4, and whether it has all-wheel-drive can affect your rates for better or worse.
An important issue in recent years is the vehicle’s safety rating. This is especially true if the IIHS (Insurance Institute for Highway Safety) has rated it less than a Top Safety Pick. Lowering insurance premiums on the safest cars is one way the insurance industry can influence car makers to improve the safety of the cars they produce. For the insurance industry, safer cars means fewer claims.
But insurance companies keep trying to find new ways to identify risky customers and therefore charge them extra. A customer of mine recently moved from a small town in southern Ontario to a Toronto suburb and because the crime statistics for the Toronto suburb are much higher than the small town, his insurance premiums doubled! So, besides choosing the right car, you need to be choosing the right neighbourhood.