We buy auto insurance because the law mandates it and we want to protect our assets. Both are good reasons to have insurance, but no one wants to pay too much.
When I was having dinner with some friends, a woman mentioned that she had just received an insurance quote for her son. He's nineteen, going away to university and she was giving him the family car. She was shocked when her broker quoted her $9,500 to insure her son as the principle driver! I gave her the best advice that I could- shop around.
Being curious, I decided to check insurance quoting sites to determine what options were available for a nineteen year old male. I used two test vehicles, a 12-year-old North American sedan and a two-year-old, high end SUV. The coverage I requested was $1,000,000 liability and a $1,000 deductible for collision and comprehensive. I selected two well known sites; Kanetix and Insurance Hotline.
Both sites are fairly similar. First I supplied my postal code, which can make a big difference in the price. I was led through a series of questions about my nineteen year old alter ego and the model vehicle I wanted to insure. The process was easy and both sites generated no-obligation quotes quickly, although I had to provide an email address to Insurance Hotline before the quote would appear.
For the older car, Kanetix provided four quotes, ranging from $2,830 to $6,785. Insurance Hotline provided only one at $3,969, from an unidentified company. For the newer SUV, Kanetix again provided four quotes, which were from different insurers. The premium ranged from a low of $7,424 to a shocking $13,621! Insurance Hotline had the slightly better price of $7,209, once again from an unidentified company.
Overall, I preferred viewing several quotes to just the lowest. Also, Insurance Hotline charges $8.50 to identify the insurance company, which Kanetix does not do. Both sites offer useful information and tips. I liked that Kanetix included the company's claims satisfaction rating with their quote, as this can be an important consideration. When premium is only a couple of hundred dollars apart, the lowest price may not be a bargain if the claims service is poor.
No matter your age or driving experience, it does pay to compare auto insurance pricing. The internet has many insurance quoting sites, which can be quickly searched for quotes and options before buying insurance. Try several of these, as the final premium offered can differ, even when the insurer is the same. In your on-line search, you may discover that your current insurance company is available at a cost than you are paying now.
Before starting your internet search, it does help if you know the identity of the companies selling auto insurance. A quick way to find this is through the "rate tutorial" posted at www.fsco.gov.on.ca . Here, FSCO describes 4 driver profiles and provides the premium that might be charged by over 50 insurers, based upon their filed rates. Disregard the quotes as they may be misleading, but you will find the list of company names helpful in your search.
By accessing the insurance company websites, you will learn about the products and services they sell. You will determine which companies are potential insurers for you and which ones you can strike off your list. Be warned that the internet provides limited ability to customise your policy and for this, you will have to speak to an insurance agent or insurance broker to select your final insurance coverage. This is when the tough decisions begin.
Next week I'll be discussing the basic mandatory auto insurance policy and some of the optional coverage available to you.
Susan Saksida, CIP is an insurance consultant who has held senior positions within the insurance companies and brokers. She is currently conducting research into the root cause of consumer misunderstanding of the insurance industry. If you have an auto accident related story please email this to insurancecompliancematters@rogers.com .
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