What is the CLEAR system for car insurance?
In the world of insurance, vehicle ratings, also known as vehicle rate groups, are assigned to each year, make and model of vehicle. These numbers are typically based on claims data and play a part in your car insurance premium (which we’ll get to next).
Across the Canadian insurance industry, data is collected on the various types of auto claims that occur, including how much they cost. This data is then used for the Canadian Loss Experience Automobile Rating (or CLEAR) system. In a nutshell, the CLEAR system uses this claims data to assess the likelihood that a vehicle will be involved in a claim and to estimate how much that claim will cost.
Through the CLEAR system, ratings are assigned for collision, comprehensive, Direct Compensation – Property Damage (DCPD) and accident benefits coverage. If a certain car is at a higher risk of being involved in a claim, it is assigned a greater number under the CLEAR system, and in turn a higher insurance rate.* For example, if your year, make and model of vehicle is frequently targeted by thieves, this will increase its rating (just another reason to
Although other rating systems can be used, CLEAR allows insurers to more accurately predict future losses, as well as reward those who choose to buy cars that are less likely to be involved in a claim.
What are the four coverage categories of CLEAR?
The CLEAR vehicle rating system is broken down into four main categories, where numerical values called “Rate Groups” are assigned. Here’s the details on each coverage category:
Direct Compensation for Property Damage
DCPD is a basic part of auto insurance – it’s what your insurers cover in the event of a collision with another vehicle. It’s a part of the no-fault system for auto insurance, and it works differently in different provinces; for example, it’s part of civil liability in Quebec, while Ontario has recently changed DCPD to be non-mandatory as of 2024.
Accident Benefits
In Ontario specifically, all auto insurance policies are required to have accident benefits. If you get into a car accident, it’ll help pay for certain types of healthcare and other expenses while you recover, and provide compensation if you or others are killed.
Collision Coverage
Collision coverage for your vehicle is optional, but it’s handy because it covers the cost of car repair or replacement if your vehicle is damaged in a collision – regardless of who was at fault. It’s separate from coverage like DCPD, but it doesn’t cover damage from events like weather, fire, or theft (that’s comprehensive coverage).
Comprehensive Coverage
As we just mentioned, this type of coverage takes care of many things that collision coverage doesn’t – including damage from fire, theft, falling objects, animal collisions and more. It’s optional for your auto insurance, but it’s a good idea if you want your vehicle to be fully protected.
How do CLEAR rankings impact my car insurance?
Vehicle rate groups determined through CLEAR are used in calculating the premium charged for physical damage coverage under most auto policies (it’s what we use here at Sonnet).
If you have a high CLEAR ranking
Having a high CLEAR ranking on your vehicle means that your vehicle is a higher risk, therefore your insurance rates and premiums might be much more expensive. Factors that can raise your CLEAR ranking include having fewer theft prevention features (or none at all) as well as limited safety features equipped.
If you have a low CLEAR ranking
A low CLEAR ranking is like playing golf - the lower the score is, the better. Or, in other words, a vehicle with lower ratings across the board will be priced less for insurance (with all other factors being equal). Your vehicle can obtain a lower CLEAR ranking if it has safety features like airbags and anti-lock brakes, as well as theft prevention features.
Keep in mind, your premium is based on more than just your car. It also looks at your driving and claims histories, as well as your location, among other things.
It’s worth noting that vehicle ratings can change from one year to the next. This is because rate groups are updated every year in order to reflect the aging of vehicles and changes in claims.* This could mean that even though you had no tickets or claims, your auto premium could go up at renewal if your car’s rating has increased.
How do I find my vehicle’s CLEAR ranking?
You can check out your vehicle’s rate group on your certificate of automobile insurance (at Sonnet, we call this your Policy Summary and you can access it directly through your Sonnet account). On the other hand, if you’re currently shopping for a new car, visit the Insurance Bureau of Canada’s website to view and compare
How can I manage my vehicle insurance premiums?
It’s clear that a lot goes into auto insurance prices and