Understand what your insurance policy covers, the available optional coverages, and the key terms and processes.
All drivers in Alberta are required to carry valid auto insurance. Drivers cannot register their vehicles without proof of insurance.
Driving without insurance is a serious offence, and you can be ticketed or have your driver’s license suspended.
An auto insurance policy covers drivers, passengers, and potentially any pedestrians involved in a collision with a vehicle.
The insurance company refers to the main driver of the vehicle as the principal driver and any other listed drivers as occasional or additional drivers. An auto insurance policy may also provide coverage for damage to the vehicle.
Insurance companies have access to significant amounts of data, such as personal characteristics like age, years licensed, and marital status, to predict the risk of you making a claim. These factors affect your rate.
If you live or drive in a city, your auto insurance will likely be higher due to the greater risk of vehicle theft or accidents. Also, insurance companies determine risk by examining the number of kilometres driven. The more you drive, the higher your risk of being in an accident, which raises your insurance costs.
Insurance companies use your driving record to determine how much of a risk you pose on the road. Generally, the better your driving record, the lower your insurance rate. For example, a driver with at-fault accidents poses a higher risk to an insurance company. Your rate may also increase if you have had more than one traffic conviction in the last three years, such as speeding or careless driving.
When looking at your driving record, insurance companies consider the following:
Your vehicle make, model, and year affect your insurance rate. Insurance companies consider the cost of replacing your vehicle if it were stolen or damaged. Your insurance rate might be lower if data shows the vehicle model is less likely to be stolen or involved in an accident. It also might be lower if the vehicle has better safety and handling features or is less costly to repair. Generally, auto insurance rates are higher for new vehicles and sports cars, but a vehicle’s safety features may help lower the price. The Insurance Bureau of Canada has a thorough list rating how expensive a vehicle is to insure.
The more coverage you have, the higher your auto insurance costs. You can customize your insurance to meet your needs by adding or removing specific types of coverage, such as collision or comprehensive. If you drive an older vehicle, you may remove collision coverage, or if you are leasing or financing your vehicle, you may be required to carry collision.
Understand how your auto insurance rate is calculated and what role you can play to lower your rate.