What auto insurance discounts are you eligible for?

What auto insurance discounts are you eligible for? | Insurance Business Canada

What auto insurance discounts are you eligible for?

Canadian motorists, regardless of where they live in the country, are required by the law to take out auto insurance. This type of coverage, however, is also one of the biggest expenses associated with operating a vehicle. Depending on a driver’s personal circumstances, obtaining car insurance can sometimes come with a hefty price tag.

But insurance companies also offer opportunities for motorists to cut costs in the form of discounts. These money-saving perks can be based on a range of factors – including a driver’s profile, vehicle type, claims history, driving habits, and coverage levels – and may enable policyholders to slash up to a third off their annual premiums.

To find out what types of auto insurance discounts Canadian drivers can avail of, Insurance Business checked out the policies of some of the country’s top car insurance providers. Here are the most common rate-reduction schemes these companies offer. The list below is categorized into discount types. 

Read more: Survey: Majority of Canadians lack auto insurance literacy

Policy discounts

1. Bundling discount

All insurers considered for the list offer discounts for policyholders who combine different insurance products. Bundling auto and home insurance with the same provider, for example, allows homeowners to slash up to 20% from their car policies. Tenants can also combine their auto and renters’ insurance to save on premiums.

2. Multi-vehicle discount

Another popular money-saving perk, insurance companies typically reduce premiums by as much as 15% for households insuring more than one vehicle.

Price comparison website Lowestrates.ca describes this type of rate reduction as a “win-win” for both the policyholder and the insurance provider as “[the insurer] gets more of your business, and you get a discount.”

3. Group discount

Some insurers offer group rates for drivers holding memberships with an eligible group, which may include the company they work for, a professional or occupational association, non-profit or charitable institution, or union membership. Belairdirect, Co-operators, RSA, and Sonnet are among the auto insurance companies that provide this type of discount to policyholders.

4. Loyalty discount

Several car insurance providers reward loyal customers with reduced rates come renewal time. Typically, the longer motorists stay with their insurer the higher the discount. Economical, Peel Mutual, The Personal, and Wawanesa offer this type of discount. Peace Hills offers policyholders premium reduction if they remain with the insurer for at least three years while L’Unique gives drivers who opt for a two-year policy a guarantee that their rates will not increase for the duration of the contract, even if they file claims.

Vehicle discounts

1. Discount for anti-theft devices

Because such devices make vehicles harder to steal, several insurers give discounts to motorists who install these security features in their cars. SGI Canada slashes premiums for customers who have installed “a non-factory device that automatically disables ignition or an approved vehicle tracking system” in their vehicles. Economical, meanwhile, offers security discounts to policyholders for equipping their cars with anti-theft systems.

Read more: Ten ways Canadian drivers can safeguard against car theft

2. Winter tires discount

Equipping a vehicle with winter tires is viewed as a responsible act that can contribute to everyone’s road safety. This is one of the reasons why many insurance providers offer discounts to drivers who have installed winter tires and keep them on during a certain period.

In Ontario, it is mandatory for insurers to give drivers a 5% reduction in premiums if their vehicles are equipped with winter tires. Coachman, Gore Mutual, Pafco, Peel Mutual, Sonnet, TD Insurance, The Personal, and Unica are among the insurance companies offering this discount to policyholders.

3. Hybrid or electric vehicle discount

Some insurers, including Co-operators, Desjardins, TD Insurance, and The Personal, offer between 5% and 10% discounts for policyholders who drive hybrid or electric vehicles (EV). Insurance companies view these types of vehicle as sustainable because of their very low emissions and low risk as they tend to be safer and less likely to break down.

Read more: Electric vehicles: What risks do they pose at home?

4. Private parking discount

Where a car is parked is among the factors insurance companies take into account when calculating premiums. A vehicle parked on the street is exposed to more risks compared to those in a laneway or garage. Many insurers give discounts to policyholders with private parking.

Driving discounts

1. Telematics discount

Telematics, also known as usage-based insurance (UBI), has been gaining popularity in recent years, thanks to the technology’s ability to monitor a policyholder’s driving habits and use the information gathered to reward safe drivers in the form of discounted premiums.

Intact, for example, takes 25% off the annual premiums of motorists with good driving habits through its ‘my Driving Discount’ program. Onlia customers, meanwhile, can avail of up to $40 cashback per month for safe driving by using the Onlia Sense app. Pembridge offers up to 30% discount through its my_Bridge app. Other auto insurers that provide policyholders access to telematics are Belairdirect through automerit and Desjardins through Adjusto.

Read more: Usage-based car insurance – the pros and cons

2. Clean driving record

Insurance companies often reward drivers with a clean driving record with significant discounts. Aviva Canada, Desjardins, Economical, Gore Mutual, RBC, RSA, The Personal, and Sonnet reward policyholders for either having no convictions and violations or not filing claims.

Individual discounts

1. Age-based discount

Some insurance providers give discounts to drivers between the age of 30 and 75 as they are seen as low risk compared to their younger counterparts. Peel Mutual offers “elite driver rates” for motorists aged 50 and over while Optimum gives reduced premiums to those aged 40 and above.

Read more: Drivers aged 40 and above could save more on auto insurance - study

2. Retiree discount

Several auto insurers offer between 5% and 15% premium reductions to drivers who have retired or reached senior age.

3. Marital status

Some car insurance companies also give lower rates to married couples compared to those for single policyholders. Belairdirect offers auto insurance discounts to drivers with families and young couples.

4. Graduated license discount

According to insurance brokerage Isure, drivers who progress through the graduated licensing system should receive a rate reduction of 10% on all coverages if they have no chargeable convictions or at-fault accidents when entering Level Two (Class G2 license). The same applies to motorists who become fully licensed (Class G license).  The reduction is valid for one year. TD Insurance is among the insurers offering such discounts.

5. Good student discount

Some insurers give full-time students with good grades up to 10% discount on car insurance premiums. Parents who have children studying at a university or college away from home can also save on the student’s coverage.