At the end of December our vehicle was up for insurance renewal, and since I was so successful at reducing our home owner’s insurance costs, I set out to learn how to save money on our car insurance as well.
How do you save money on car insurance in British Columbia? The simple answer is to talk to an insurance broker who is able to shop the rates of multiple insurance companies from one place. In BC you legally must carry basic car insurance through ICBC, however, you are allowed to purchase optional additional coverage through alternative companies – This is often where you will find savings rates that ICBC cannot match.
While this is the quickest way to start searching out cheaper methods, I also have included several things for you to consider when speaking with your agent.
What is considered optional insurance?
Firstly, insurance coverage can be confusing, and it is helpful to have a basic understanding of what each of these types of insurance will cover. All of these optional insurances may be covered by private companies, are considered to be above and beyond ICBC’s basic car insurance:
- Extended third party liability (protects you from the financial liability of an at-fault crash. Basic insurance covers you up to $200, 000, but extended liability increases this amount between 1-5 million depending on the options you choose.)
- Under-insured motorist protection (protects you if the person who hit you does not have adequate coverage)
- Loss of use (this provides you with transportation from the time of the crash until your vehicle is back in working order. It can include costs of public transit, rental vehicles or taxis)
- Collision (covers the cost of the accident, even if you are at fault)
- Comprehensive (covers vehicle damage not caused by another vehicle. For example hitting a dear, rocks hitting the windshield, ect.)
- Rental vehicle coverage (covers insurance for rental vehicles)
- New vehicle protection (can include full replacement costs of a new vehicle – read more here.)
- Specialized Coverage (this can include off road vehicles, vehicles in storage and optional coverage for luxury vehicles. Learn more here.)
If you are anything like me, and these terms are extremely confusing when speaking to an agent, this basic understanding will keep you from buying additional insurances that you may not need.
If your broker is any good, they will do an amazing job at explaining the differences in coverage of these options to you.
Don’t compromise your coverage
One of the things that I made sure to do when shopping for new rates, was to not compromise our coverage. Now that I have a basic understanding of additional coverage’s, I knew exactly what is was that I wanted to be covered, and why. I did not eliminate things like third-party liability.
When life hits your family in unexpected ways, as it did to ours, it changes the way you look at insurance. These insurances protect my family from the things that we don’t see coming, and will hopefully protect us from experiencing the full financial weight of an accident, even if we are at fault.
I wanted to make sure we had all of the coverage we wanted and needed without having to pay premium prices for it. We’ve now done that once and I would prefer to never go back to that place.
Allow a soft credit check
Recently when we renewed both our house insurance and our home owners insurance, they asked to run a soft credit check. Since we have a good credit score I allowed it, and it decreased our insurance rates by a small percentage.
This may be something worth asking about next time you renew.
Low yearly mileage may save you
In 2019 insurance companies started offering reduced rates for people who put on less than 5,000 kilometers in a year. If you are someone who lives in a city, and are using city transit the majority of the time, it may be worth asking about this.
10 years of driving experience
There is a big discount that comes when everyone driving your vehicle has 10 years of driving experience or more. If this is applicable in your household, make sure to mention it for maximum discounts.
**Once you are at an age where you suddenly have driving teens, make sure that you update this on your insurance. You do not want to be caught without insurance because your teen was driving at the time of an accident.**
Increase your deductible
By increasing your deductible to $1000 you will automatically pay less. Since we are a family who believes in a minimum of $1000 in an emergency fund we are comfortable with this amount.
Understand insurance is to protect your family from “the big ones”
Do not make claims for minor repairs, as this will impact your insurance premiums for many years to come. Case in point, my brother was in a fender bender as a teen, and the repair costs were a couple thousands dollars. At the time he did not have the cash to pay out of pocket for the repair, so he paid his deductible and claimed it using insurance.
Over the course of the next five years, he paid the cost of his accident in increased premiums five times over. From this point on, our family understood that insurance is really meant to cover major loss or injury, and since we have paid out of pocket for minor events.
Pay for one full year at a time
This is something that our family has not taken advantage of this year, but for those who are curious, I was quoted roughly a $50/year administration fee for using the month-to-month payment option. If you are like us, and could not afford the lump pay out at the time of renewal, it may be worth considering turning annual insurance into a sinking fund.
If you have read any of my articles before, you will know I rarely turn down the opportunity to save money, even in small amounts such as this.
**Something that I learned this year is that if you are late or miss a payment, the company *could* automatically withdraw your coverage with or without your knowledge. Paying in one lump sum completely eliminates this as a possibility.**
If you are late on a payment or have an NSF on an automatic payment, the insurance provider may pull coverage without your knowledge.
Know the cost of your windshield
Seems a little bizarre I know, but hear me out, if your windshield replacement costs are inexpensive it doesn’t make sense to buy insurance for it. There are windshields that cost less than your deductible, however, certain windshields are wildly expensive, and would be well worth having insurance to cover.
Know where your vehicle sits on that spectrum.
Use an anti-theft device
This is especially true in cities with a high rate of vehicle theft, and may save you on your comprehensive insurance rates.
ICBC just updated this policy, be sure to ask if your device qualifies.
** I am just a mom looking to save her family some money, not an insurance professional. This blog is made up of the things that I learned while I was trying to become more educated on the topic of insurance for myself. If you have further questions, please see an insurance broker. **
How have you saved money on insurance? Let me know in the comments below!