Do Drivers Who Have Filed Claims Choose Higher Auto Insurance Deductibles?

With the rising cost of auto insurance in recent months, drivers seeking ways to save money may wish to consider choosing a higher deductible in exchange for a lower car insurance premium.

What Is an Auto Insurance Deductible?

An auto insurance deductible only applies to you if you have collision coverage, comprehensive coverage, or both. Deductibles may also apply to your direct compensation-property damage coverage depending on which province you live. In essence, a deductible is how insurers and drivers share risk, and they help insurers keep rates as low as possible, since people are less inclined to file a claim for minor incidents. If you opt to not add either collision or comprehensive coverages to your policy and only sign up for the mandatory coverages, you will not have any deductibles for your car insurance.

How Do Auto Insurance Deductibles Work?

If you file a claim as the result of being in a collision, for example, before your insurance policy kicks in, there is a deductible you are required to pay. Many people select a low deductible on their collision coverage of $500. The trade-off is this: the lower your deductibles, the higher your overall premium is and vice-versa. By increasing your deductible, your insurance premiums will be lower, but make sure you put funds aside to pay it in case you’re ever in an accident.

Which Drivers in Ontario and Alberta Chose Higher Deductibles?

We looked at different age groups of drivers in Ontario and Alberta and their choice of deductibles for their auto policies based on the insurance transfers we collected through from January 2017 to December 2019. We wanted to see what the differences are between drivers who have filed a claim and those who have not by demographic.

The drivers’ options for selecting collision and comprehensive coverage deductibles included:

  • Minimum (no coverage)
  • Standard (a $1,000 deductible and $1 million liability coverage)
  • Enhanced (a $500 deductible and $2 million liability coverage)
  • Custom (flexible options for choosing collision, comprehensive, and liability coverages as well as loss-of-use and rental car endorsements)

What Deductibles Did Ontario Drivers Select?

Year Number of Claims Minimum Standard Enhanced Custom
2017 0 27% 55% 6% 11%
2017 1+ 16% 53% 13% 19%
2018 0 27% 56% 6% 10%
2018 1+ 14% 55% 16% 14%
2019 0 27% 57% 7% 8%
2019 1+ 13% 59% 16% 12%
  • Regardless if they have filed claims or not, the majority of Ontario drivers (56%) tend to select standard coverage year-over-year.
  • A higher proportion of drivers with at least one claim (15%) are more inclined to opt for enhanced or custom coverages than drivers with no claims (7%).

What Deductibles Did Different Generations of Ontarians Select?

Generation Number of Claims Minimum Standard Enhanced Custom
Baby Boomers 0 25% 54% 10% 11%
Baby Boomers 1+ 13% 55% 18% 13%
Gen X 0 24% 57% 8% 11%
Gen X 1+ 14% 57% 15% 13%
Older Gen Y 0 24% 59% 7% 10%
Older Gen Y 1+ 12% 56% 15% 17%
Young Gen Y 0 30% 57% 5% 8%
Young Gen Y 1+ 18% 60% 13% 10%
Gen Z 0 52% 39% 3% 7%
Gen Z 1+ 23% 54% 4% 19%
  • Across generational divides, of Ontario drivers with no claims, 55% chose standard coverage with the exception of Generation Z, who mostly opted for minimum coverage.
  • Of drivers with at least one claim, 56% (from Baby Boomers to Generation Z) elected for standard coverage. With that said, we also saw a greater proportion of drivers from this group (13%) choose enhanced coverage versus their claims-free counterparts (7%).

What Deductibles Did Alberta Drivers Select?

Year Number of Claims Minimum Enhanced Standard Custom
2017 0 37% 7% 2% 59%
2017 1+ 24% 9% 6% 63%
2018 0 33% 18% 3% 46%
2018 1+ 18% 26% 6% 50%
2019 0 21% 51% 11% 17%
2019 1+ 8% 47% 18% 27%
  • Overall, 46% of Albertan drivers tend to choose customized coverages regardless of whether or not they have filed any claims.
  • A higher proportion of drivers (10%) with at least one claim were more inclined to select enhanced coverage than claims-free drivers (5%).

What Deductibles Did Different Generations of Albertans Select?

Generation Number of Claims Minimum Standard Enhanced Custom
Baby Boomers 0 24% 30% 8% 38%
Baby Boomers 1+ 7% 47% 9% 38%
Gen X 0 24% 32% 8% 36%
Gen X 1+ 15% 30% 20% 36%
Older Gen Y 0 24% 33% 6% 36%
Older Gen Y 1+ 11% 35% 15% 39%
Young Gen Y 0 31% 30% 4% 36%
Young Gen Y 1+ 11% 41% 2% 45%
Gen Z 0 62% 17% 0% 21%
Gen Z 1+ 86% 14% 0% 0%
  • Across all generations of drivers with no claims, between 24% and 30% selected minimum coverage, with the exception of Generation Z, who mostly opted for minimum coverage (61.9%).
  • Of Alberta drivers with at least one claim, a greater proportion (9%) opted for enhanced coverage versus their claims-free counterparts (5%) with the exception of Baby Boomers and Millennials (aka Young Generation Y).

How to Choose Auto Insurance Deductibles

There are a few things to consider before you choose your auto policy deductibles:

  • You can customize your deductibles to suit your needs. For instance, a lot of people choose a lower deductible for comprehensive coverage since it tends to be a relatively inexpensive optional coverage you can add
  • For collision coverage, calculate the differences between a high and low deductible on a monthly basis to see how each option affects your premium. Moreover, think twice before electing to not include collision to your policy, since this type of coverage is what will pay for damages to your vehicle if it is involved in an accident with another car, or a streetlight, road sign, or any other stationary object. However, if your vehicle is more than 10 years old, you may not want to buy collision coverage for it
  • Do you have the wherewithal to pay for a high deductible if you must? Don’t put your monthly budget at risk if you don’t think you can afford to pay a $1,000 deductible after filing a claim
  • How likely is it you will have to file a claim? You may be a safe and courteous driver with an impeccable driving record, but that doesn’t mean you may not be involved in a car accident. Consider how great the risk is of filing a claim depending on how much you drive, where you drive, and when

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