If you’re shopping around for a new insurance policy or if you want to improve your current rate… you are aware that certain factors which affect the bottom line are out of your hands.

These factors include your age, gender, and your previous claims record.

So let’s focus on what you CAN do to get a lower rate.

Here are 8 factors which are 100% in your control. Address them, and I guarantee you will get the lowest possible rate on your insurance!

#1 SHOP AROUND

Different companies will offer you different policies at a different price.

Don’t make a rushed commitment unless you want to pay double! Shop around to get a real sense of lower-priced policies.

Many independent sites allow you to compare insurance rates throughout Canada. And they can be incredibly helpful.

Just keep in mind that most of these sites earn a profit by charging a small commission on each sale. So contact your top company choices directly before signing anything!

Kanetix – www.kanetix.ca

This site will allow you to compare rates as well as to set up your coverage online.

What I find convenient is the way they have broken up the rate requests for classic cars, commercial vehicles, RVs, and motorcycles. The interface is very simple and user-friendly.

Insurance Hotline – www.insurancehotline.com

The process this site will put you through is very similar to what you would experience with a broker.

You’ll be asked a few basic questions before you’re shown relevant insurance quotes.

What is annoying is that once you provide your e-mail address, you’re also asked for a phone number before you’re shown any quotes.

And they only offer you “special discounts” over the phone, so you’ll end up dealing with a rep.

Whether you use a site or not, remember to ask these important questions:

• What is the minimum coverage I am required to purchase by law?
• Can you give me specific examples of a loss that would be paid under each coverage?
• What would be covered under each optional coverage (Specified Perils, Comprehensive Perils, Collision Perils, and All Perils)?
• Do I have the option to purchase "new for old" coverage and, if not, why not?
• As an insurance professional, what coverage and limits would you recommend?

#2 OPT FOR HIGH DEDUCTIBLES

The deductibles in your policy are what you’ll actually be asked to pay out of your own pocked in the case of damage.. before your insurance coverage kicks in.

If you truly want a lower rate, opt for a higher deductible. This can lower your rate by up to 40%.

And in the end it could actually make the most financial sense.

Here’s how:

Let’s assume your deductible is at $1,000.

If your vehicle is vandalized and the damage is appraised at $6,500 you will have to pay the full deductible ($1,000) while your insurer makes up the difference ($5,500).

Yes – that’s money that’s coming out of your pocket.

But, if you save $200 on your monthly insurance rate because of the high deductible, you’re reaping in annual savings of $2,400.

That means you’re ahead by $1,400 annually!

$2,400 annual rate savings - $1,000 deductible you have to pay = $1,400 total savings

..and that’s assuming you’re vehicle actually is vandalized!

Going this route does mean that you’re facing more risk behind the wheel.

BUT – you won’t be asked to pay deductibles for damage caused in a collision for which you are not found at fault.

So, probably, you will save more money with a higher deductible.

#3 SKIP UNNECESSARY COVERAGE ON OLDER VEHICLES

If you’re driving an older vehicle which is covered by comprehensive or collision coverage you may actually be paying more for your insurance than your vehicle is worth!

And here is a handy formula you can use to determine if you’re overpaying:

Comp & Collision Premium x 10 < Vehicle Value

In other words, your vehicle’s value should be at least 10 times higher than what you’re paying for comp and collision insurance monthly.

And if you think that ditching the extra coverage leaves you overexposed, keep in mind that an average policyholder makes a claim only once in a decade!

Chances are that your vehicle will be sold or will become completely depreciated before you ever need to make a claim.

#4 CHECK YOUR CREDIT SCORE

A raising trend in the industry is for insurance companies to use your credit score in their calculation of your rate.

And the numbers are not pretty.

If you have a bad credit score, you could be paying an additional 40% - 50% on top of what your rate would be otherwise.

So pay your bills on time and make sure there’s nothing in your credit history that doesn't belong there!

#5 CHECK YOUR DRIVING RECORD

One of the biggest drivers behind a high insurance rate is your driving record.

What better way to predict your future behaviour on the road than by checking your past behaviour on the road?

Insurance companies will check for prior violations and accumulated demerit points when calculating your rate.

If you’re considered a high-risk driver you’ll definitely be hit by a high insurance rate because you’re more likely to file a claim.

The solution?

It’s simple - sign up for a safe driving course or defensive driving course. These courses go by different names but they bring about the same result. Your demerit points will go down, and so will your insurance rate.

You might even be eligible for additional discounts!

#6 NEGOTIATE FOR DISCOUNTS

There are many types of discounts that could lower your monthly insurance rate. So make sure you ask for them!

Low-Mileage Discounts

If you have a short commute to work, use a car pooling service, or don’t travel long distances with your car your annual mileage is probably lower than most!

As a result many companies may offer you a discount.

Group Insurance Discounts

It is common practice for insurance companies to offer special discount for a variety of organizations, professions, or demographics.

For example, if you’re a veteran, teacher, or work for a certain company you could be eligible for a lower rate!

Other Discounts

You can use a variety of reasons to ask for a lower rate!

Maybe your vehicle is equipped with additional safety features like an anti-theft device or motorized seatbelts. Maybe you’re a senior. Maybe you’re a student and you’re high grades meet some type of requirement.

But don’t be fooled!

It is often the case that insurance companies who offer the most discounts actually charge the highest industry rates!

#7 PAY IN FULL (IF YOU CAN)

If you decide to pay your insurance bill in installments, you’ll be subjected to unnecessary admin fees. These fees are approximately $8 - $12 per installment, depending on the insurance company.

You could be saving serious cash if you pay your insurance bill in full.

#8 DON’T LAPSE WITH YOUR COVERAGE

Affording a break in your insurance coverage will cost you!

You would be giving your insurance company grounds for raising your premium. And it could disqualify you from certain discounts.

Be smart and pay your coverage on time.

And if you’re switching to a new carrier, make sure your old policy doesn't expire prior to when your new policy takes effect!

Let us know how you were able to lower your insurance rate in the comments below!