Top 5 things you need to know if you’re clueless about car insurance
Girl on phone after a car accident

Is it your first time buying auto insurance? It doesn’t have to be daunting if you know what to look for ahead of time.
We’ve put together our top five tips on what you need to know if you’re feeling slightly clueless about buying car insurance.

What you need to know about car insurance as a new driver

1. The type of car you drive affects your auto insurance rate

Many details that determine your coverage are driver specific. Things like your age, gender, driving history, and where you live will be factors in deciding how much you pay for car insurance. However, the type of car you drive will also reflect the cost of insurance.

For example, if you own an expensive sports car, it’ll probably be pricy to fix if you get into an accident. Think of it this way, from the perspective of your insurer, it’s riskier to insure a car that has a track record for getting stolen.

Factors that affect your car insurance:

  • Price
  • Age (used vs new)
  • Fuel type (diesel, gas, or EV charger)
  • Basic vs luxury model

Did you know? It’s a myth that red cars cost more to insure. A car’s colour does not impact premiums.

2. It’s a good idea to shop around for auto insurance

Yes, we’re actually telling you it’s okay to check out other insurance companies! It could make a difference in your price. For instance, every insurance company has its own pricing structure and will weigh information differently.
Like any important purchase you make, it’s always smart to shop around before you make your final decision.

On the flip side, if you have a good track record of driving, you’ll be rewarded. Here are a couple of discounts to look out for when comparing auto insurance providers.

  • Claims free — If you’re a claims free driver, this could mean extra cash in your pocket.
  • Multi vehicle — If you insure more than one vehicle with your provider, you’ll most likely save more.
  • Multi policy — If you combine a home and auto policy, you could also save more money.
  • Winter tires — For those who live in Ontario, you can save more if you put winter tires on. It pays to be safe.

Did you know? Sonnet customers can save even more with several discounts on home and auto insurance. Plus, when you bundle your home and auto policies you could save up to 20%. Learn more about Sonnet’s discounts: Canadian University Alumni discount, professionals discount, and eligible employees and members discount.

How to choose an insurance provider

Here are a few questions to think about before selecting a provider:

  • Do they have good reviews on Trustpilot?
  • How easy is it to file a claim?
  • Do you mind sitting on-hold waiting to speak to an actual person on the phone?
  • Do you prefer to manage your own accounts easily online?

Many people think insurance just comes down to price. But shopping on price alone could end up hurting you if you end up with less coverage than you need, or if the service standards are not what you expect.

You should feel confident and comfortable with your insurance provider. If you have to submit a claim, the process should be smooth. The traditional way of purchasing insurance has changed. Many people consider online insurance for its ease of use, transparency, and efficiency. Review the benefits of buying home and auto insurance online.

Do I need to insure a car before or after I buy it?

Definitely before! You’ll need to have auto insurance to legally be allowed to drive home. If you currently have a vehicle, notify your insurance provider if you’re adding or replacing your vehicle.

To be able to register your vehicle with the Ministry of Transportation (MTO), you’ll have to show proof of a valid auto insurance policy. You’ll also need to have a valid driver’s licence.

3. “Cheaper” car insurance doesn’t always mean less expensive in the long run

If you’ve saved up and bought your first car, congratulations! Owning a vehicle is a big responsibility and it comes with some necessary costs. Maintenance and insurance expenses can add up quickly. You might be looking for ways to save on car insurance but there are a few things to consider.

Optional coverage auto insurance to consider adding

Most insurance companies will also offer additional coverages — but they cost extra. While it’s tempting to remove coverages to save money, if you have to submit a claim, you’ll be thankful that you have protection. When deciding “how much auto insurance do I really need?” it’s important to review your financial situation, your experience driving, and the condition of your car. Here are some optional auto coverages to consider including in your policy.

Optional auto insurance coverages

  • Accident coverage
  • Ticket forgiveness
  • Damage to non-owned vehicles
  • Roadside assistance

Deductibles explained

Another decision you’ll need to make is what you want your deductible amount to be. Signing up for a higher deductible may be tempting because it means paying less monthly. But it’s important to know that if you submit a claim, you’ll be on the hook for paying out of pocket first before your insurance covers the rest.

If you’re a new driver, having a higher deductible might not be a good idea. You’re still learning how to drive which means there’s an increased risk of getting into an accident.

What should my deductible be?

First think about how much money you’d be willing to spend if you got into an accident tomorrow. Then you’ll want to consider things like how much your car is worth and the road conditions where you live. Most insurance providers have a range of deductible options. You need to choose the best option that works for you.

4. Taking a young drivers course can help you save on insurance

Typically, drivers under 25 years old pay more for car insurance because they are statistically more likely to get into an accident. Depending on which province you live in, you could save money on car insurance by completing a government-approved driving training course. Like anything, learning a new skill takes practice. Having expert guidance can help with your confidence and keep you safe on the roads.

TIP: If you live in Ontario, check out these government approved driving schools to help you get your G2 and G licence. Or if you live in Alberta, take a look at these government approved driving schools to help you get your Class 7 and Class 5 licence.

5. Not all loss or damage is covered by insurance

Rusting, corrosion, mechanical breakdown, tire damage and general wear and tear aren’t covered by your auto policy. It’s your responsibility to keep your car in good, running condition to try and avoid expensive repairs. Also, if any personal items (e.g. your phone, purse, sports equipment) are stolen from your vehicle, it’s not covered either – it may, however, be covered by your home, condo, or tenant insurance policy.

TIP: Try not to have your purse or laptop visible through the window if you need to keep valuable items in your car. Either put the items in your trunk or cover them with shopping bags. Never keep expensive items in your car overnight if you can avoid it.

While all drivers need auto insurance, your coverage needs are unique. Do your research, know what coverage you need, and review your policy yearly. And don’t let insurance-heavy words overwhelm you, get familiarized with our home and auto insurance glossary. You’ll be driving off into the sunset in no time.

Coverage your car’s always wanted at a competitive price.