High Risk Car Insurance-What Canadian Drivers Should Know

“Low-risk drivers are an asset for car insurance companies because they pay on time and rarely get into an accident,” he wrote in a guide posted on the company’s website. “Now, providers don’t have to spend a lot of time and energy dealing with low-risk policyholders.”

“In contrast, high-risk drivers generally spend more time and energy in the long run because they are more likely to be involved in a car accident and are more likely to miss a payment. With all this in mind. It’s easy to see why many car insurers aren’t keen on covering high-risk drivers, “the company added.

read more: Dealing with high-risk commercial vehicle insurance customers

However, because Canada requires car insurance, the insurance industry cannot prevent high-risk drivers from taking out insurance. However, car insurance for dangerous drivers often comes with a high price tag.

What does it mean to be a high-risk driver?

High-risk drivers are policyholders who are more likely to claim car insurance than the average driver.

“If you file more claims than the average Canadian driver, you’re basically taking more than a fair share of the collective policyholder contribution,” Surex explained. .. “When this happens, the car insurance company is obliged to charge the driver more for compensation.”

Due to several factors, insurers may classify drivers as high risk. These include:

1. Previous insurance claim

Policyholders with a large number of claims in a short period of time are considered dangerous by most car insurance companies, especially if the driver is involved in an accident. Some insurers also consider insurance companies that have made different types of insurance claims to be more likely to claim car insurance and classify them into high-risk categories.

2. Traffic violation

Having been convicted of various traffic violations, including drunk driving (DUI), drivers are undoubtedly in the high-risk category. However, dangerous drivers can reimburse themselves by practicing safe driving, as traffic tickets will disappear from the record after 3 years and accidents will be removed after 6 years.

read more: IBC: 75% of Canadian drivers are distracted while driving

3. Bad credit rating

Some insurers look at an individual’s credit score to determine if they are in a stable financial position to make timely premium payments. Poor credit history can also inform insurance companies that policyholders are likely to make future claims.

4. Driver age

Drivers between the ages of 16 and 24, and just-licensed drivers, are considered high risk because many car insurance companies recognize them as “inexperienced” and are prone to making mistakes on the road. Often. Some insurers also believe that policyholders in their age group are more likely to be involved in an accident or commit a traffic violation. Many car insurance companies likewise classify older drivers as high risk.

5. Missed payment

Drivers who miss regular premium payments and, as a result, their insurance policy is canceled, are often marked as high risk by most car insurance companies.

6. Home ownership

Home ownership, or lack of home ownership, can affect how insurers perceive policyholder risk levels. Some car insurance companies consider people who do not own real estate to be at high risk because they see their homes as a sign of financial stability.

7. Luxury car

Owners of sports cars and other expensive cars, or those who drive vulnerable models, are considered dangerous by some insurance companies. So is the owner of a car that has been modified to improve performance.
read more: Obviously – 10 Cheapest Cars to Insure in Canada

How Much Does It Cost to Compensate for a High Risk Car?

Premium prices vary by insurance company, but there is one thing for sure. That is, the cost of high-risk car insurance is significantly higher than the cost of standard car insurance.

Markham-based insurance broker ThinkInsure estimates that the average price is $ 2,500 to $ 5,000 a year higher than regular car insurance. Meanwhile, Surex said high-risk drivers should expect to pay 25% to 100% or more.

How can high-risk drivers save on insurance premiums?

Nonetheless, according to these experts, there are still ways for high-risk drivers to reduce their premiums. Here are some of their tips.

  • Safe driving practice: As mentioned earlier, driving tickets and accidents will be removed from the record after the set number of years. By adopting safe driving, high-risk drivers can set a clean record after a few years.
  • Take a driving course: Taking special driving courses, such as courses for defensive driving, especially for new drivers, not only helps reduce the risk of accidents and violations, but can also lead to premium discounts. ..
  • Choose a cheap and efficient vehicle. Luxury cars and cars that have been modified to improve performance can be very expensive to insure. To save on insurance premiums, drivers can choose a car that is affordable and easy to maintain.
  • Improve credit rating: Drivers with poor credit history can improve their score by meeting a minimum monthly payment. This can affect the premiums you pay.
  • Compare quotes. Experts advise high-risk drivers to search for different policies to find the coverage that suits their needs. Talking to an experienced insurance broker can also help drivers access professionals who can offer the best value.

High Risk Car Insurance-What Canadian Drivers Should Know

Source link High Risk Car Insurance-What Canadian Drivers Should Know

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