Helping you save: The value of deductibles and discounts

Have you ever wondered what the real value of discounts can be on your auto insurance, or how choosing higher deductibles can save you money? You might be surprised how much you could save by choosing the right deductibles or by asking about discounts you may be eligible to get.

The scenario
With the help of the Kanetix.ca online car insurance quote comparison service, a set of quotes were obtained for a fictional 35-year old in Toronto driving a 2007 Honda Civic. From this original set of quotes, we layered in details which would improve the chances of getting a cheaper car insurance rate and looked at how each affected the lowest quote provided.

Deductibles matter
A deductible is the portion of an insurance claim you agree to pay. Your insurance company picks up the rest. By agreeing to take on more financial responsibility in the event of a claim, the insurance company will adjust your premiums accordingly. In other words, the higher the deductible you choose, the lower your insurance rate. How much lower? Well it depends on the insurer and how much your rate is already, but based on the lowest quote in our scenario around $52 was knocked off the rate when the deductible was changed from $500 to $1,000.

Discounts: Anti-theft alarms
If you’ve already taken measures to ensure your car is less likely to be stolen, then you might be interested to know that some insurance companies offer an “Anti-theft discount” when certain anti-theft devices are installed. In our scenario, by having an anti-theft device an additional $11 was saved on the lowest annual car insurance rate quoted.

Discounts: Winter tires
Do you install snow tires before the winter season begins each year? Some insurance companies offer a discount when all four of tires are changed seasonally so that in the winter the vehicle is equipped with tires designed specifically for driving in the cold and snow. By changing the tires seasonally, another $74 was saved.

Discounts: Multi-line
Whether you own your home, condo or rent, you should have some sort of property insurance coverage. If you get your property insurance from the same insurer as your car insurance you will likely qualify you for a discount called the "Multi-line Discount". In our scenario, combining our home and auto insurance coverage knocked another $166 off the lowest car insurance quote.

Discounts: Low mileage
If you have a car but limit how often you drive it by taking public transit or carpooling then ask your insurer if they have a low mileage discount. The fewer kilometers you put on your car, the more likely you are to get a cheaper rate.

In our scenario, we originally indicated the driver drove 35,000 kilometers a year of which 80 were to get to and from work (not unreasonable since this is about the distance from Toronto to Oakville, Toronto to Pickering, Calgary to Airdrie, or Montréal to Beloeil).

Given the price of gas and parking, many drivers alternate between driving to work and taking the train or carpooling, effectively reducing the commute mileage put on the car by half. If your current policy is set up in such a way that it assumes you commute every day without consideration for the times you take the train or carpool, talk to your insurer because in our scenario we knocked off another $33 off the car insurance rate quoted.

The total savings
All in, the options chosen in the scenario and the available discounts translated into a potential savings of $336 off of a car insurance quote that was already competitively priced. Of course, this is just an example, and the savings will vary by insurer, but the fact remains: there are savings to be had. Don’t hesitate to talk to your insurer and ask about discounts.

Other popular discounts you might want to ask about include the:

•    Age discount: A discount on your insurance as you pass certain age milestones. If available, the qualifying age differs from insurer to insurer.
•    Internet discount: Sometimes available from insurers who offer car insurance quotes online.
•    Occupational discount: Offered if you work in a certain field or hold a certain degree.
•    Group discount: Some companies offer a ‘group’ discount if you belong to certain employer groups, trade unions, or alumni and professional associations.
•    Auto club discount: Available if you are a member of an auto club, like CAA.

While the availability of discounts varies by insurer, where you live and whether you meet the eligibility requirements, asking about them about discounts could save you a significant amount of money.

Compare car insurance quotes today.