Jenna Kardal was taken aback by the initial quote she received for car insurance, especially since she had been driving under her parents’ plan for years and owned a used car that was already a decade old.
During her graduate school years, Kardal frequently discussed ways to save money, leading her to secure a new insurance quote of $130 per month for her 2002 Nissan Maxima, named Maxwell. This amount later dropped to $108 after demonstrating good driving habits over the following years.
Although not the most thrilling expense, car insurance is crucial for drivers. With insurance costs on the rise, experts recommend reviewing driving behaviors and policy specifics to potentially reduce expenses.
Premiums for car insurance experienced a temporary decrease in the middle of the COVID-19 pandemic due to reduced driving activity and discounts offered by government insurers in certain provinces. However, Statistics Canada reported a 36% increase in premiums from 2014 to 2024, pointing to various factors such as auto theft, inflation, and the rising costs of vehicle construction and repair.
According to industry expert Sherif Gemayel, modern vehicles with advanced technology components contribute to higher repair expenses. Additionally, inflation has driven up the costs of repairs, replacement parts, and labor, as highlighted by Aaron Sutherland from the Insurance Bureau of Canada.
Sutherland anticipates that factors like the Canada-U.S. trade conflict and more frequent extreme weather events will further escalate insurance premiums. Therefore, he advises Canadians to carefully evaluate their policies to ensure they are getting the best coverage.
Here are some recommendations from experts:
1. Speak up and explore different insurance options to potentially find better deals in Canada’s competitive insurance market.
2. Consider raising your deductible to lower costs, as higher deductibles can lead to reduced premiums.
3. Assess your driving habits to determine if pay-as-you-go insurance, which tracks mileage, could be a cost-effective choice.
4. Evaluate the necessity of collision coverage for older vehicles to potentially decrease premiums.
5. Explore newer insurance offerings like usage-based programs that reward safe driving habits.
Reviewing insurance policies annually may not be thrilling, but it can be crucial in ensuring financial protection in unforeseen circumstances, as emphasized by Gemayel.