Top 5 Mistakes to Avoid When Shopping for Auto Insurance in Canada
When it comes to shopping for auto insurance in Canada, you may be quite confused about what kind of coverage you need. This can lead to you making costly mistakes - such as failing to protect your assets with the correct auto insurance policy.
But don't worry. With this guide, we'll outline the top 5 mistakes that Canadians make when shopping for auto insurance. With our help, you're sure to find the coverage you need.
1. Failing to Shop Around
This is the #1 mistake Canadians make - not shopping for insurance at all! Many Canadians simply renew their insurance policy every year, without taking a look at the insurance market to see if they can find a better price by comparing their auto insurance.
Tickets and accidents can increase your insurance rates. Shopping around for a new policy is especially important if you have driving infractions on your record. The reason why it's important is because if you stay with the same insurer, your current policy may reflect the price of coverage immediately post-accident - meaning you could be overpaying for your current policy.
2. Purchasing Only Minimum Liability Coverage
Many Canadians think that "minimum liability coverage" means that they're protected when they get in an accident. In a way, this is true - minimum liability coverage allows you to drive legally in Canada.
However, it does not guarantee the safety of your assets. It also does not guarantee that an accident will be fully covered by your insurance policy.
For example, if your minimum liability coverage policy covers $25,000 in damages, and you get involved in an at-fault wreck with an expensive car such as a BMW or an Audi, you can be held liable for damages above $25,000.
While it's tempting to only purchase minimum liability coverage to save money, this is usually a bad idea. Do a bit of research, and consider your current financial situation. Protecting yourself with a higher liability policy is usually worth the investment - even if it results in a slightly more expensive policy.
3. Focusing Only on the Price of Insurance
A cheap policy might be a great fit for your wallet, but when it comes to the coverage it offers, it may not be enough. Instead of buying the cheapest insurance policy you can find, take the time to figure out what coverage is important to you as well as level of service.
If it's important to you to have an easy claims process and a high level of customer service, you should consider how much that's worth. The cheapest policy may not be the best policy that offers you everything you really need.
4. Choosing a Deductible That's Too Low
Choosing a low deductible is a very common mistake when shopping for auto insurance. If you choose a low $500 deductible, for example, you may end up paying thousands of extra dollars in premiums over the next several years - even if you're never involved in an accident.
A higher deductible allows you to keep more cash in your pocket - and still be covered in case your car is totaled or catastrophically damaged in an accident. So while choosing a higher deductible may increase your out of pocket expenses during a claim, it's often well worth it and the savings offered by a lower monthly premium can easily make up for this.
5. Lying On Your Auto Insurance Application
Some drivers may lie about their driving records - while others may lowball the total number of miles they drive each year, or neglect to mention that they're driving their vehicle for business purposes.
Insurance companies will fact-check every aspect of your application. If you do manage to get away with misrepresenting the truth, you're putting yourself at risk.
If your insurer sees that you've failed to disclose or hid facts on your application, they may void the insurance contract. Non-disclosure cancellations stay on your record, which means you won't be able to purchase insurance through a regular market. Instead, you'll have to turn to "high risk" insurance carriers, which means a higher insurance rate . Lying is not worth the savings you may get.
Follow This Advice - And Get The Coverage You Need!
By avoiding common insurance shopping mistakes, you can make sure that you get all of the automotive coverage you need - with no surprises. So next time you shop for auto insurance, think of this advice.
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