My new car costs less to insure? You’ve got to be kidding.
You drive a 2010 Honda Civic and your neighbour drives a 2017 Ford F150 pickup. You both have clean driving records and travel the same distance to work. You know his truck is worth twice as much as your Civic and then the shock comes – you are paying more for auto insurance than he is. How can this be?
Every vehicle available today in Canada is rated according to the Canadian Loss Experience Automobile Rating (CLEAR) system. What this system does is assess and compare each and every vehicle based on its individual expected claims frequency and cost.
Vehicles that are more likely to be stolen will cost more to insure than those less likely to be a target. Vehicles whose replacement parts are more expensive will be rated higher than those with less expensive replacement parts. Vehicles with safety features that help the driver avoid accidents will have a better rating than those without advanced features. Most importantly, vehicles that provide better driver safety when they do get into an accident will lower the amount of injuries and thus the cost of medical treatment for the driver.
So let’s revisit your neighbour and his new truck. Why would it cost him less to insure his $45,000 vehicle than it costs you to insure your $3000 car?
The Honda Civic is generally one of the most frequently stolen vehicles in Canada; this drives the cost for theft coverage up quite a bit. Replacement parts for vehicles such as the Honda Civic are generally much more expensive than most other vehicles on the road; this will impact the cost of repairs after a collision. Finally, and most importantly, a 2013 Ford pickup will be equipped with the latest in accident avoidance and passenger safety technology which will allow it to avoid more accidents than the Civic and better protect the driver if the accident cannot be avoided.
So what are you to do? The choice is CLEAR. When the time comes to replace your vehicle be sure to talk to your insurance broker to compare your make and model and ensure you’re not paying more than you have to.
If you have any questions, we'd be pleased to take your call: 519-736-8228