Car Insurance Coverage and Premiums

Monday, January 7, 2013

Car insurance premiums can be influenced by various factors.

  • The way you use your car impacts the calculation on your premium. For example, whether you use your car for pleasure or business may impact how much you have to pay per month.

  • The make, model, and year of your car can also affect your premiums.

  • The distance that you drive can also affect your premiums. The premium can also vary according to the listed vehicle users. The household might have drivers with years of clean experience alongside minor drivers. The insurance company will want to know the amount of time the least experienced drivers will use the car.

  • A driving history will affect premiums as well. Some drivers have never experienced a collision or an accident, and others have. Most insurance companies penalize drivers that have reported collisions or convictions in the last six years. Convictions such as having a license suspension within the last six years or an automobile insurance policy cancellation within last three years could also influence the determination of premium.

Car Insurance Coverage and PremiumsIt is important to understand how claims or convictions affect your premium. When a driver operating your insured vehicle is involved in an at fault or partially at fault collision your renewal premium could be increased for subsequent years. As far as convictions are concerned, it affects the premium calculations adversely in many ways. Drivers need to be weary in knowing that almost every traffic violation ticket charged to the insured driver could increase their insurance premium, in addition to the fine that had to be paid.

Liability coverage in Canada is the lone mandatory coverage. It protects the insured from loss or damage to a third party caused from an accident while you operate the vehicle. It includes any kind of property damage, loss of life or injury. Similarly, it protects drivers from financial loss due to medical emergencies or temporary loss of income due to injuries. Theses accident benefits can be claimed even when you incur injury through an at-fault accident.

There are a few optional coverages as well:

  • Collision coverage protects you against damage caused to the insured vehicle in the case of a collision. The premium can be determined by such things as the condition of the vehicle and experience or history of the driver.

  • Comprehensive coverage covers the insured’s vehicle for damages caused by other persons or factors. The coverage compensates for losses incurred through vandalism, theft or losses incurred due to elements such as hail, storms etc.