It’s no secret that many of us are feeling the effects of inflation. Cost of living, gas prices and groceries, are all skyrocketing. It’s no wonder then that many of us may be looking for opportunities to save money – and insurance is no exception. However, it’s important to know how your rates are calculated. Once you have a better understanding of the concept of premiums, you can learn the tips and tricks to help select the right insurance that best suits you and your lifestyle.
How are Insurance Rates Calculated?
Insurance is available to help you (and your family and friends and neighbours) pay for damage that may occur to your property or car. It can also compensate others on your behalf if you are responsible for injuring someone or damaging their property or car. To help pay for claims (also known as “losses”), the insurance company collects payments (often called “premiums”) from each of its customers and puts the money into one large pool. If a customer is unfortunate enough to experience a loss for either their property or their car, the collected funds are used to help pay for the damages incurred. Because your insurance policy is an annual contract, the premiums collected from all customers to help pay for damages operates in one-year cycles. Insurance companies will then use their discretion to either raise or lower rates to ensure that there is enough money available to cover the claims of anyone who needs assistance.
So now that you know your payments are used to cover claims costs for all customers with your insurance company (and their payments are used to help you when you need it most), you may be asking yourself…
How Can I Save Money on My Insurance?
Rather than reducing coverage, which could come at the expense of necessary protection in the event of a claim, here are five tips that may help.
How Else Could I Save?
Beyond the tips above, there are other discounts many insurers can offer. Here are some that Allstate provides its customers for home and auto insurance.
- Driver Training Discount – For newly licensed drivers, a discount could apply if they have completed a recognized Driver Training Course and live in Ontario, Alberta or Nova Scotia.
- Anti-Theft – If you live in Quebec, and your vehicle is equipped with an anti-theft tracking device or vehicle marking you may be eligible for discounts.
- Installing Security Systems – By installing monitored home security systems, you may be eligible for discounts.
- Installing Water Protection Devices – Similar to the home security discount, by installing a water leak detection system you could save on your home insurance policy.
That’s just a start. Ultimately, the best way to find savings opportunities with your home or auto policy is to have a discussion with your insurance professional. There are also home or auto discounts specific to certain provinces which may be worth exploring with someone who is familiar with your policy.
For many people, insurance is a customizable product that provides coverage unique to an individual’s needs. This provides the opportunity for it to change as your needs evolve over time. It’s good practice to review your policy at least once per year, but there’s no harm in doing so a little early, especially if there are savings to be found!
*Subject to terms, conditions and availability. Savings apply to major coverages only. Requirements for app downloading, enrollment, and trip recording apply.
Terms and conditions apply. This contains information about coverage and discounts offered by Allstate but does not list all of the conditions and exclusions which may apply. The wording of the actual policy and local law will govern.
This information has been provided for your convenience only and should not be construed as providing legal or insurance advice.