Tips to Help Save Money on Your Insurance

Woman pictured putting money into a piggy bank

Each year, January marks Financial Wellness Month, a month where you can reflect on the importance of evaluating your finances and uncovering ways to save.  

Many of us may be looking for opportunities to save money. 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. 

Many people also might not be aware that there are many ways to have a savvy insurance policy. For instance, you can bundle your insurance policies (combining your home and auto policies), reach out to your insurance provider to uncover potential discounts, and review your policies regularly. These are just a few examples of how you can make the most out of your insurance. 

Keep reading to learn more! 

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.

  1. Bundle and Save: If you have different insurers protecting your home and vehicle, you may be missing some potential savings. Combining your property and auto insurance with a single insurance company could result in reduced premium costs for both.
  2. Consider usage-based auto insurance: Safe drivers can save up to 30% with a usage-based insurance program like Drivewise®*. With a smartphone and a data plan, speed and movement sensors activated by a special app can help reward good driving behaviours with personalized discounts. We wrote a dedicated article to help you learn more about this type of auto insurance. 
  3. Lifestyle changes can mean savings: As time passes, your needs and circumstances can change, which means so do your insurance requirements. A call with your insurance professional to update your coverage might yield some opportunities to consider. For example, if you’re working from home more than in the office, your daily commute has changed and may impact your auto policy. If you paid off your mortgage or are a recently retired Ontarian, there are additional discount opportunities that may apply.
  4. Increase your deductible: Raising your deductible – the amount you pay in a claim – can help reduce the cost of your policy without affecting your overall coverage. However, if you do make a claim, you will be responsible for paying more of the cost for repairs.
  5. Review savings opportunities with your policy: Some purchases you may have already made (or plan to) could translate into lower premiums in part because they can reduce the risk of a collision or loss with your home or vehicle. For example, Allstate offers a discount for drivers in Ontario and Alberta that install winter tires on their vehicle during the colder months. In Quebec, anti-theft tracking devices or vehicle markings are eligible for a discount. Investing in a vehicle with built-in safety features such as forward collision mitigation, park assist camera, lane departure mitigation to name a few could also lead to potential discounts. For homeowners, a monitored security system can result in savings on their policy. If you’ve recently made changes to your vehicle or home, that could translate into savings opportunities. 

How Can I Save On My Auto Insurance Policy?

Beyond the tips above, there are other discounts many insurers can offer. Here are some that Allstate provides its customers for auto insurance.

  • New Car Discount – If you live in Quebec, you can save on your policy if you insure a new vehicle purchased within the last three years. The vehicle can be a model from last year, this year, or the upcoming year.  
  • Occupational Discount – Get a discount based on your profession or career if you live in Alberta. 
  • Private Parking Discount – Get a discount if you park your vehicles in a private space for parking, such as private garage or driveway in Ontario. 

I’m a Student or Retiree. What Discounts Are Available to Me?

You’re in luck! Allstate offers discounts on auto insurance policies for you, too.  

  • Good Grades Discount – No, we’re not kidding. Licensed drivers in your household under 25-years-old in Ontario and Alberta could be eligible for a discount based on their good grades! 
  • 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. 
  • Away At School Discount – If you have an occasional driver who is under 25-years-old in your household in Ontario, who is away at school (more than 100 km from your postal address), you may qualify for a discount. 
  • Retiree Discount – If you are retired, living in Ontario and over the age of 65, you can enjoy a special discount! 

How Can I Save On My Home Insurance Policy?

  • 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.  
  • New Home Discount: Enjoy savings based on the age of your house.  
  • Mortgage-Free Discount: Customers who don’t have a mortgage on their home may be eligible for special discounts.  

Ultimately, the best way to find savings opportunities with your home or auto policy is to have a discussion with your insurance professional. Keep in mind – there are 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! 

Disclaimers:

*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.