When Will My Car Insurance Go Down?

Aug 12, 2020

So you've received your car insurance renewal. Of course, we all hope the premium has gone down. Don’t we all hope! In reality, it’s usually an increase. Good news though: Sometimes you can get an insurance decrease without having to actually do anything to get better rates. So “What makes my car insurance go down?” Let’s explore some ways that might save you some money.

How Long Does My Ticket Stay on My Record?

Tickets or convictions stay on your record for 3 years, after which an insurance company can no longer make your rates higher for this infraction.  You can check your Motor Vehicle Record (MVR) by going to the MTO in person or online here

When we say tickets, we mean convictions such as speeding tickets, seatbelt, stop sign, DUI, etc.  If you fight the ticket in court and are successful, then those don’t count on your driving record. And all those parking tickets on your dash? They won’t impact your insurance rates. Whew.

Another thing that doesn’t count is demerit points.  Demerit points have zero impact on your insurance rates. It is a widely held myth!  Demerit points are only used to suspend or rescind driver’s licenses.  Many minor tickets don’t come with any demerit points, but the tickets will still affect your insurance rates.

Answer: 3 years

How Long Does an Accident Stay on My Record?

Accidents stay on your record for 6 years. However, many insurance companies will look at your record for 10 or even 20 years and reward you accordingly.  In most cases, it takes 6 years for your accident record to clear up.  After your 6th full year since the accident, your rates will go down on your renewal date automatically.  This is also a good time to shop around.

Answer: 6 years

How Long Do Non-Payment Cancellations Impact Rates?

Cancellations for non-payment stay on your record for 3 years total. Make sure you don’t get cancelled by the insurance company because you can’t pay. This has impact on your rates should you want to get insurance again.

Answer: 3 years

At What Age Will My Insurance Rates Drop?

This question gets asked a lot by younger drivers. One reason to wish to age another year: Your rates could possibly drop up to 50% once you reach age 25. For young men, your rates also go down at 19, 21, and 23 years of age.

Once you hit retirement age, you can qualify for another discount.  If you are over 65 OR are receiving income under the Canada Pension Plan, you can receive a discount of around 3%.  It’s not much of a saving, but you may as well take advantage of anything you can get.

Answer: 25 years of age

Car Is Older Now; Can I Save Money?

This might be the biggest myth about insurance rates.  As your car ages, the value usually depreciates.  The less the vehicle is worth, the less it costs to repair or replace.  Your car insurance rates should go down as your car gets older, all things being equal, right?

However, not all factors are equal when determining car insurance rates.  Where you live, other drivers in the home, your driving record, market conditions, all have a much higher impact on your rates versus the age of your car.  So don’t expect an automatic car insurance decrease just because your vehicle is older now.

The smart thing to do is wait until your car gets to the age or value where you decide you could replace it out of pocket if necessary.  At that point, you should delete collision, fire & theft coverage.  This could save you quite a bit of money since you are the one assuming the risk should it get stolen or in an accident.  So put the car in your garage, drive safe, and save money on coverage you might not need.

Answer: Not automatically

Do Insurance Companies Lower Their Rates?

Most insurance companies change their rates at least once per year.  Some companies change their rates several times per year, or even monthly.  Similar to the real estate market, insurance rates have fluctuations based on a number of things.  Variables such as the number of claims, fraud, severe weather and the economy, to name a few, all factor in.

While your driving record could get better or you’ve just turned 25, you could receive a renewal with a big increase because of flooding in another province or the economy not doing so well.  On the other hand, the economy could be doing very well and claims are down.  COVID is a good example of what can happen when millions of people stay at home and claims lessen.  The insurance companies will start decreasing your rates on renewal.

Answer: Dependent on outside factors

Do I Qualify for VIP Discount?

While there is no such thing called a VIP discount, many insurance companies have rates for “Preferred, Elite, or Valued” clients.  Once you’re claims free for 9, 10 ,20 years and you have your home insurance bundled with your auto, and you’re a good payer, you might start getting bonus discounts automatically on renewal.

Savings of 10-20% are not unheard of just for being a responsible client for a long period of time.  The best part is: Nothing needs to be done to qualify. The discount just pops up on your renewal.

Answer: For Preferred, Elite or Valued clients

There are a lot of factors that can make your insurance rates go up or go down and not all of them are within your control.  It’s best to be aware of some of these factors, shop around once in a while, and find a broker online who can put together a long-term strategy for you. Give us a call or start a quote now:

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