7 things you should know before buying car insurance

Here are seven things you should know about car insurance.

Tips for buying car insurance: 1-4
"Many people pay between $500 and $1,500 more than they have to for car insurance each year," says Lee Romanov, an auto insurance expert and consumer advocate in Toronto. "The industry is regulated and provincial governments have to approve rate increases, but insurers can attach whatever price they want to the policy depending on the profile of their target customers." This means your age and postal code determine your likelihood of filing a claim – at least in the eyes of the insurer.

Here, Romanov and Nancy Lee Martin, manager of consumer relations at the Insurance Bureau of Canada, show you how to keep costs down and ensure you get what you need.

1. Shop around
There are more than 100 insurance companies in Canada competing for your business. "Get as many quotes as you can," says Martin. Romanov created an online rating guide called Insurance Hotline, with a list of profiles and rates from more than 30 insurance companies.

2. One insurer is the way to go
If you aren't already using one insurer for your home and vehicles and putting all vehicles/drivers onto one policy, you're missing out on a multi-policy, multi-vehicle discount. This could save you anywhere from five to 15 per cent, says Martin.

3. Ask questions
If you do go with a broker, ask him if he is quoting you the insurer's lowest price, because he isn't obligated to, says Romanov. Also ask about the cancellation rules. Every policy has different rules and it's important to know what they are, otherwise an accident or a couple of tickets could lead to you being dropped.

4. Know your needs and wants
Ask yourself what you really need, then find out what companies are offering. One of the ways insurance companies differentiate themselves is through the "extras" they offer, such as 24-hour claim service, first accident forgiveness, disappearing deductibles, and claim service guarantees.

Page 1 of 2 – Find out more tips for buying car insurance on page 2.

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