In short, yes, car insurance rates are indeed on the rise. According to the Consumer Price Index, car insurance rates increased across Canada by 5.3 per cent on average between June 2008 and June 2009.

This will come as no surprise to drivers in Ontario and Alberta where:

  • Ontario car insurance rate changes are published quarterly. Over the last 12 months (July 2008 to June 2009), regulators published their quarterly rate approvals showing that Ontario car insurance rate increases averaged 7.59% based on the entire market.

  • Alberta car insurance regulators, last year, approved a 5% increase in premiums for mandatory auto insurance. The result was an estimated $30 per year more. This year however, regulators have decreased the premiums for mandatory auto insurance by 5%, effective November 1st, 2009. The effects of last year's increase however, will continue to be felt for the majority of this year.

What can you do if you see an auto insurance rate increase?

If you see your auto insurance rates increase, what can you do? Plenty.

Let's first look at addressing some myths when it comes to shopping around for insurance, because there are many:

  • All insurers are the same
    False. What you pay now with your current insurer is not the same as what you would get with another. Rates vary considerably between insurance companies, and it's up to you to find the company that can offer you the lowest auto insurance rate. By not shopping around, you could be paying significantly more, in some cases hundreds of dollars, for your car insurance coverage.

  • Shopping around is only for 'bad drivers'
    False. Too often, good drivers think that only those with bad driving histories have to shop around. Every driver, good or bad, should shop around to make sure they're getting the best car insurance price.

  • Getting auto insurance quotes is a painful, tedious process
    False. Long gone are the days when you had to set aside hours to get car insurance quotes. In a fraction of the time, through comparison sites like, you can get quotes easily online from competing insurers. In a matter of minutes, you'll be able to see if any of the providers featured through Kanetix offer you a better car insurance rate.
Now, let's look at ways people save money on their auto insurance premiums. A couple may seem obvious, but hopefully there are some nuggets that will help:

Drive carefully

Your driving record is an influential factor in determining your insurance rate. With tickets and at-fault accidents, you can find yourself paying a lot of extra premium over the years.

Pick your car wisely

If you're looking to buy a car, consider the cost of insurance before buying. Insurance rates for cars are based on the previous claims history for that vehicle. The more likely a car is to be stolen for example, the more you'll pay for insurance. So before buying, compare auto insurance quotes to get an idea of how it rates.

Ask about discounts

If available and if you're eligible, the following common car insurance discounts can save you money:

  • Multi-vehicle discount: A discount for customers who insure more than one car on the same policy.
  • Multi-line discount: A discount for customers who insure both their property and auto through the same insurance company.
  • Anti-theft discount: A discount available to policyholders who install an approved anti-theft device thereby ensuring the car is less likely to be stolen.
  • Winter tire discount: A discount available to drivers who seasonally change their tires to match the season's driving conditions.
  • Low mileage discount: Available if your vehicle is not driven often.
  • Group discount: Some companies offer a 'group' discount if you belong to certain employer groups, trade unions, or alumni and professional associations.
  • Auto club discount: Available if you are a member of an auto club, like CAA.

Increase your deductibles

The higher your deductibles, the lower your premium. Keep it affordable though, because this is how much you'll have to cover should you need to submit a claim.

Think about dropping collision coverage if you drive an older car

There comes a time, when dropping the collision coverage on your policy makes sense if your car is older. For example, if you had a 10-year-old car worth $1000, and your deductible was $1000, that collision coverage is not going to help much. Talk to your insurer. They can help you make this decision.

Moving? Compare car insurance quotes

Chances are if you moved, or are moving, it will affect your car insurance premiums. Don't assume your current insurer will continue to offer you the best auto insurance rate at your new address. After moving, it would be wise to compare car insurance quotes from competing insurers to what you're paying with your current insurer. It's the only way to know you're still getting the best insurance rate possible.

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