Meet Alex, a 32-year-old graphic designer living in Vancouver. After years of relying on public transit and rideshares, he finally bought his first car—a used but reliable hatchback that suited his city lifestyle. Excited to hit the road, he began the next step: getting car insurance.
He expected the process to be straightforward. But when his car insurance quote came back, the price stopped him cold. Nearly double what some of his friends said they were paying. “Why is it so high?” he asked himself. They were around his age, lived in the same city, and some even drove newer cars. What was he missing?
Alex began to dig deeper. As he explored his options and compared policies, he discovered that car insurance in Canada is far from one-size-fits-all. It isn't just about the kind of car you drive or how often you use it. A long list of variables determines your car insurance quote—your driving record, where you live, your past insurance history, and yes, even your age.
In fact, age plays a significant role in how insurers assess risk. While 32 might not seem young or old, insurers rely on decades of data that show certain age groups are more likely to be involved in accidents. Younger drivers, especially those under 25, often pay much more because they lack experience. Older drivers—typically over 70—can also face higher rates due to slower reflexes and increased health-related risks.
So even though Alex had never made a claim and considered himself a safe driver, his relatively short insurance history and urban postal code worked against him. Like many Canadians, he realized that understanding how insurers calculate premiums is key—not just to budgeting wisely, but to finding ways to lower those costs over time.
Here, we break down the key factors that affect your car insurance quote in Canada, and what you can do to get the best deal for your needs.
Your driving record and personal profile are some of the most important elements insurance companies consider. These factors provide a direct look at your individual risk.
A clean driving record is arguably the best way to keep your insurance costs low. Insurers track your driving history to predict your future risk.
At-fault accidents: One of the quickest ways to see your rates increase is being deemed at fault for a collision. An at-fault claim can impact your premium for several years.
Traffic violations (convictions): Tickets for speeding, distracted driving, or other major infractions signal risky behaviour to insurers. Insurers will consider the number and severity of your convictions in your premium calculation.
Years of experience: New drivers, especially those under 25, typically face higher rates because they lack a proven history of safe driving. Years of driving experience without claims or convictions can lead to substantial discounts.
Insurers factor in certain demographic and personal history details into the risk assessment. These factors can play a key role in your car insurance quote change.
Age: Drivers under 25 and over 70 often face higher premiums due to statistical risk profiles associated with those age groups. Rates often stabilize and decrease for middle-aged drivers with a good record.
Gender and marital status: While becoming less of a factor, gender and marital status may still play a role in some areas, based on historical claims data.
Insurance history: A gap in your insurance coverage or a history of policy cancellation (e.g., for non-payment) can signal higher risk to a new insurer. This may result in a higher premium.
Your postal code plays a huge role in your premium. Car insurance rates vary significantly by province, and even within a province, city, or neighbourhood.
Urban versus rural: People living in large urban centres generally pay more for insurance. This is because dense traffic, higher rates of collisions, vandalism, and auto theft are all more common in populated areas.
Claims frequency: If your neighbourhood has a statistically high number of claims (accidents, thefts, or vandalism), the pooled risk for all drivers in that area increases. This can lead to higher rates.
The car you drive and how you use it directly impact how much an insurer might have to pay out in a claim.
While researching what affects car insurance quotes, you may not expect it, but the specific car you drive contributes to the cost of your insurance.
Cost of repair: Cars with expensive, specialized, or imported parts cost more to repair after an accident. Newer cars with complex technology (such as advanced sensors and cameras) often have higher repair costs, which translates to a higher insurance premium.
Safety rating: Cars with excellent safety ratings (e.g., proven collision protection and safety features) may qualify for lower rates. This is mainly because the risk of severe injury and costly accident benefits claims is reduced.
Theft likelihood (CLEAR Rating): Insurers use the Canadian Loss Experience Automobile Rating (CLEAR) system. This rating considers the likelihood of a specific make and model being stolen and the average cost of theft or damage claims. If your car is on a "most stolen" list, your comprehensive coverage premium will likely be significantly higher.
Car type: Sporty or high-performance cars typically carry a higher risk for both collisions and theft. This often results in higher insurance costs compared to minivans or standard sedans.
Insurers need to know how often and for what purpose you use your car, as this impacts its risk exposure.
Annual mileage: Drivers who put fewer kilometres on their car each year spend less time on the road and are therefore considered lower risk. Be accurate about your estimated annual mileage—it can save you money.
Commuting: If you use your car daily for a long commute to work or school, it increases your exposure during high-traffic times. Insurers will charge more for "commuting" use than for "pleasure" use.
Commercial use: When you use your personal car for business purposes, such as making deliveries, transporting goods, or professional travel beyond regular commuting, it requires commercial auto insurance. This is almost always more expensive than a personal policy.
The choices you make about your policy's coverage limits and deductibles are what affect car insurance quotes in major ways. However, these factors are mostly within your control.
| Coverage Type | Description | Impact on Price |
|---|---|---|
| Mandatory Coverage | ||
| Third-party Liability | Covers damage or injury you cause to others. | Higher limits increase the premium. |
| Accident Benefits | Covers medical costs, rehab, and income replacement after an accident, regardless of fault. | Included in base premium. |
| Uninsured Automobile | Covers injury or death caused by an uninsured or hit-and-run driver. | Included in base premium. |
| Direct Compensation – Property Damage (in some provinces) | Covers damage to your vehicle when another driver is at fault. | Included in base premium in applicable provinces. |
| Optional Coverage | ||
| Collision Coverage | Pays for repairs or replacement if your car hits another object or vehicle. | Increases premium, especially for newer or financed cars. |
| Comprehensive Coverage | Covers non-collision damage (e.g., theft, fire, vandalism, weather). | Raises premium depending on vehicle and location risk. |
| Endorsements (Riders) | Add-ons like: | |
| -Accident Forgiveness | Prevents your rate from rising after your first at-fault accident. | Slight increase in premium for long-term protection. |
| -Loss of Use | Pays for a rental vehicle while yours is being repaired after a covered claim. | Adds to premium, useful for daily-use vehicles. |
A deductible is the amount of money you agree to pay out of pocket before your insurance coverage kicks in for an eligible claim.
Higher deductible = Lower premium: Choosing a higher deductible (e.g., $1,000 instead of $500) lowers your premium because you take on a larger portion of the initial risk in the event of a claim.
Assess your comfort level: While a higher deductible saves money on your premium, ensure you can comfortably afford to pay the deductible amount should a claim occur.
| Deductible amount | Impact on premium | Financial risk to you in a claim |
|---|---|---|
| Low ($250 - $500) | Higher | Lower out-of-pocket cost |
| High ($1,000 - $2,500+) | Lower | Higher out-of-pocket cost |
| Discount Type | Description |
|---|---|
| Bundling | Combine your auto and home insurance policies with the same provider to receive a significant discount. |
| Multiple Cars | Insure more than one car on the same policy to qualify for a multi-vehicle discount. |
| Anti-Theft Devices | Install an approved tracking or immobilizer system (e.g., TAG) to lower your premium. |
| Winter Tires | Receive a discount for using approved winter tires during the specified winter period. |
| Clean Record / Claims-Free | Long-term, claims-free drivers often qualify for the lowest rates available. |
It’s important to note that in some provinces, such as British Columbia (ICBC), public insurers play a significant role in insurance discounts and what they cover. Due to government regulations, insurance discounts and coverage can vary from state to state. Hence, it’s essential to do your research and consult with local insurance experts about terms, and discounts specific to your region. Some of the biggest drivers of premium changes are entirely outside of your control. These factors stem from wider trends in the insurance marketplace and the economy. This is what often accounts for an unexpected car insurance quote change.
At Begin Insurance, we simplify your insurance journey by acting as your dedicated broker. We shop the market on your behalf, comparing options from multiple leading Canadian insurance providers to help you find affordable, reliable coverage tailored to your unique needs.
We can explain your car insurance quote change, policy options, answer your questions, and ensure you get the right balance of protection and value. Get a free quote today.
Posted Jul 26, 2021