Why You Should Choose Private Auto Insurance

If you’re a Canadian driver, then you’re probably aware that you can get public and/or private insurance coverage depending on your location. While both coverage programs are available in most provinces, there are a few regions that are run as insurance monopolies by the government. This is for example the case of Ontario, British Columbia, and British Columbia. In such areas, the cost of insurance is particularly high as it can amount to $1,500 a year. This, coupled with other vehicle costs, can make car ownership very expensive for you. This article explains why you should stay away from government-run insurance programs

Public insurance is expensive

If you live in one of the provinces where only public insurance is available, you should expect to spend at least $1,000 for auto insurance annually. There are two leading reasons for this:

  • Insurance fraud
  • Bad weather

Insurance fraud has been identified as the main reason for the high cost of auto insurance in Ontario. Fraud is conducted in various ways but perhaps the most common one is address manipulation. As you might know, insurance providers calculate premiums’ levels based on a number of factors including address location. For instance, if you live in a low crime neighborhood, you’ll be assessed low premiums.

By using false addresses, policyholders are often able to save hundreds of dollars on premiums. Another explanation for the high level of car insurance premiums is the rise of claims. This is what occurred recently in the province of Manitoba as auto insurance underwriting losses have been steadily increasing due to bad weather.

How is private insurance better?

In a report published in 2011, the Fraser Institute explained that government-run car insurance monopolies cannot outperform the insurance programs offered by the private sector. One advantage of private insurance firms is that, unlike government entities, they rarely set limits on the types of coverage that they provide. This may be observed in the province of Quebec where you won’t be able to subscribe for a 100% coverage policy if you choose public insurance.

Indeed, although you’ll be able to benefit from low car insurance rates, your protection will be limited. If you were to experience a collision, you wouldn’t be allowed to sue your wrongdoer for all the wrong that they have done to you whether mental or emotional. Such limitations don’t exist with private insurance firms.

What can you do to cut your auto insurance bill?

One way to spend less on car insurance is to switch to usage-based insurance. This will allow you to be assessed premiums that reflect your monthly usage and will help you generate lots of savings. Nevertheless, you must keep in mind that you’ll be required by your insurance provider to approve the installation of a tracking device inside your car. The purpose of this device is to foster drivers to develop safe driving habits when on the road.

So if you consider yourself a good driver, this shouldn’t be a problem for you. Even if you’re not a good driver, this is maybe the motivation that you needed to become one. Indeed, as your driving skills improve, the discounts to which you’re entitled also increase.

If you currently reside in a province featuring a government-run insurance monopoly and really want to save on premiums, then you should consider relocating. According to a news release from the Bank of Montreal, auto costs are the third largest monthly expense for a Canadian household after housing and food as they represent 15% of the budget. Moving to a province where the auto nsurance sector is open will help you reduce this percentage while offering you better protection.

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