How Drivers in Toronto Can Reduce Auto Insurance Rates During COVID-19

During the COVID-19 pandemic, the changing economic landscape has had an impact on the day-to-day lives of most Canadians. People around the country face new realities caused by the global pandemic and lockdown. Saving money has become more important than ever, and reducing car insurance payments may help you manage your budget more effectively.

Seeking ways to cut your car insurance premium is worth your time anyway, but in a COVID-19 world, it is doubly important. In Toronto, paying less for insurance should be near the top of your financial to-do list. After all, motorists in Canada’s largest city pay more for car insurance than any other region other than drivers in British Columbia.

Toronto: High Insurance Rates

In Toronto and the surrounding cities that comprise the Greater Toronto Area (GTA), drivers can expect to pay more for auto insurance. Average annual car insurance premiums in the region hover around $2,000, which is $166.67 each month. That’s not a small amount for families weighing their monthly cashflows.

Compared with Ontario as a whole, Toronto drivers pay 32.89% more for coverage than the provincial average of $1,505 a year, or $125.42 per month. There are several reasons why Toronto is one of Canada’s most expensive car insurance markets, such as an increase in vehicle repair costs, there’s more risk driving in a big city, and fraud.

During the ongoing pandemic, the situation surrounding Toronto’s auto insurance rates is a cause for concern. People are already feeling the financial pinch from the crisis, and for some, making insurance payments is getting harder.

What You Can Do to Reduce Auto Insurance Premiums

Whether you’re in Toronto or anywhere else, cutting your insurance rate can save you a lot of money every month. Here are some ways to lower your premium:

• Insurer Relief Measures and Rebates

The insurance industry’s response to the COVID-19 crisis was for many companies to offer rebates and other relief measures. In April, the Financial Services Regulatory Authority (FSRA) made changes to Ontario’s Insurance Act to allow insurers to offer rebates.

By July, $685 million in relief had been issued, amounting to an average saving of $150 per customer. Measures include allowing motorists to defer payments, waiving non-sufficient payment fees, rebates, and premium discounts. Find out from your insurer what, if any, financial relief measures they may provide.

• Try Usage-Based Insurance

As Canadians adjust to the demands of the COVID-19 pandemic, many are living under strict stay-at-home measures. Many people are working from home and only use their vehicles for essential purposes.

Usage-based insurance (UBI) has become increasingly popular since arriving in the province in 2013. Several insurers in Ontario provide UBI coverage.

As the name suggests, UBI provides insurance based on the use of your vehicle. There are two types of UBI programs, pay-how-you-drive that uses telematics through the use of a mobile app to monitor driver behaviour (speed, braking, distance, and location), and pay-as-you-go, which monitors how many kilometres you drive. Both programs offer discounts, whether for good driving behaviour or if you use your vehicle to driver fewer than 9,000 kilometres a year.

• Shop for Quotes

Finding out if you can get a cheaper rate should be at the top of any driver’s list, not just those in Toronto’s volatile auto insurance market. Using an online quote engine to compare auto insurance quotes is the fastest way to get an overview of what price you can expect to pay for the policy you want.

Finding quotes based on your specific criteria takes minutes, and you can select the best deals before contacting a broker or insurer. It is worth noting choosing a policy with the cheapest quote may not be the best way to go. Instead, buy a policy that suits your insurance needs at the most affordable price.

• Speak to Your Broker

Sometimes, a simple call to your broker or insurer can lead to discounts. You never know until you ask, and your insurer can offer you ways to cut your premium costs. Your broker or insurance provider can give recommendations on how to lower your rate.

• Change Your Deductible

Many insurance customers may not understand what a deductible is. Essentially, the deductible is a way to share risk between yourself and the insurer. It is the amount of money you need to pay if you suffer an insurance loss. For example, if you are in a collision, the deductible will be “deducted” (removed) from the claim your insurer pays.

If you’re willing to take more risk by having a higher deductible, your car insurance premium may be lower. For clients who don’t like assuming risk, a low deductible would mean a higher premium. Just remember, your deductible is the amount you are on the hook for if the worst happens.

Other steps you may want to take to reduce your premium include:

• Boosting your vehicle’s security by installing an alarm
• Removing any high-risk drivers from your policy
• Bundling home insurance with your auto policy as many insurers will offer a discount if you purchase both policies from them

Adding Up the Savings

As drivers in Toronto adjust to the financial challenges they face because of COVID-19, even small changes can make a big difference. Lowering your auto insurance bill is one way many Torontonians may be able to cut back and save money.

Some other steps you may want to take include boosting your vehicle’s security by installing an alarm, removing any high-risk drivers from your policy, and bundling home insurance with your auto policy as many insurers will offer a discount if you purchase both policies from them.