What are vehicle ratings and how do they impact my insurance?

When shopping for a car, not all makes and models are priced the same. You wouldn’t expect to pay the same for a base model and the top trim level. Vehicle prices are based on a variety of factors, such as the features included. Auto insurance works in much the same way, in that different cars cost different amounts to insure. But why is this the case? And how do you know what your vehicle is rated? We want to give you the inside scoop on what are vehicle ratings and how they can affect your car insurance.

What are vehicle ratings?

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 protect your car from theft).

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.^*

How do vehicle ratings impact my 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). Like in 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). 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.

TIP: Because your vehicle affects your premium, it’s a great idea to get insurance quotes while car shopping. This way, you can see a full picture of how much a vehicle will really cost overall and it may even help you pick out your next car.

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 out my vehicle’s rating?

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 vehicle ratings for past years.

It’s clear that a lot goes into auto insurance prices. Although your vehicle’s rate group is one factor that isn’t in your control, it’s still important to understand its role in your car insurance premium.

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

Canadian Loss Experience Automobile Rating (CLEAR)