Steer Clear of These 7 Costly Auto Insurance Mistakes


Steer Clear of These 7 Costly Auto Insurance Mistakes

January 3, 2024

Canadian law requires all drivers to have Auto Insurance, and as a car owner, it’s your own responsibility to make sure that you’re covered before hitting the road. But with so many Auto Insurance options on the market, how do you know which policy suits your vehicle and lifestyle best, which coverage add-ons you actually need, or which insurance company can offer you the lowest rates?

While we’re all human and make mistakes, when it comes to your Auto Insurance, the wrong slip-up can end up costing you big time in the long run. Between gas and maintenance costs, owning a car can get expensive, and we want to help you save wherever you can. Whether you’re a new driver or a veteran behind the wheel, here’s our list of the most common Auto Insurance missteps to avoid:

1. Don’t skip out on routine maintenance.


Did you know that most insurance companies have a variety of different discounts available to policyholders? They might not advertise them, but all you have to do is ask, and you could end up saving hundreds of dollars off your premium! You might be eligible for a discount on your Auto Insurance if you:

  • Bundle multiple cars on the same Auto policy;
  • Bundle multiple Home and Auto policies with the same provider;
  • Complete a ministry-approved driver’s education program;
  • Own a hybrid or electric vehicle;
  • Only drive occasionally (e.g. no daily commute);
  • Own a vehicle with built-in safety features;
  • Install winter tires;
  • Install theft prevention devices;
  • Use a telematics device;
  • Have no accidents in your claims history;
  • Pay your annual premium cost all at once;
  • And more!

The specific requirements and savings will vary depending on the insurance company, so be sure to do your due diligence and take advantage of any offers you’re able to get!


RELATED: The Top 17 Auto Insurance Discounts Revealed

2. Misrepresenting yourself—whether it’s intentional or not.


It should go without saying, but always make sure that the information you provide to your insurer is accurate and true. Fibbing on your application (even if it wasn’t on purpose) won’t be worth the few bucks in short-term savings if you end up getting your claim denied down the line—or worse, having your policy cancelled entirely due to misrepresentation and your eligibility for future Auto Insurance policies impacted.

Here’s an example: if you don’t add your teenage child onto your policy in the hopes of keeping costs down, and then they have an incident while driving your car, your insurance won’t cover the claim. Similarly, if you tell your insurer that your personal vehicle is being used for commercial purposes and you end up getting into an accident during work-related travel, your policy won’t respond either.

Your insurance provider needs the most up-to-date knowledge on where you live and park, what you use your vehicle for, and who drives it regularly. If you experience any changes to your circumstances that could impact your insurance, be sure to keep your insurer in the loop.


RELATED: 6 Frequently Asked Questions About Secondary Driver Insurance

3. Not choosing the right car.


That flashy luxury vehicle you’ve been eyeing might seem attractive at first glance, but the truth is that the pricier the car, the more it’ll likely cost to insure it. If you’re looking to keep your Auto Insurance costs low, then you’ll have to carefully consider the make and model you’re choosing. So as you’re shopping around for your dream car, be on the lookout for factors that could impact your insurance, like safety ratings, reliability reports, and theft rates.


RELATED: Car Theft Surges in Canada: Are You Covered?

4. Buying too little or too much coverage.


Another common mistake? Only buying the bare minimum coverage as required by law. It might seem like you’re saving, but that low price tag means that you could be leaving yourself vulnerable to exclusions.

Collision and Comprehensive Coverage, for example, are add-ons that will further protect you from damages resulting from various causes, like at-fault collisions or extreme weather. Raising your deductible will also lower your premium, at the cost of taking on more risk yourself. Effective January 1, 2024, Ontario drivers will be allowed to opt out of Direct Compensation Property Damage (DCPD) coverage on Auto Insurance policies. This might be tempting to lower premium costs, but it could also leave you on the hook for any loss or damage that your vehicle sustains in an incident, even if you’re not at fault.

Consider your options carefully. Generally, if your car is older or you can afford to replace it out of pocket, then don’t make the mistake of overpaying for coverages you don’t need! But if you want the peace of mind of protection against unexpected repair or replacement costs in the future, then you shouldn’t just settle for the most standard policy.

There’s no one-size-fits-all for Auto Insurance—your ideal policy will vary depending on your budget, as well as your car’s worth and usage. But ensuring that you have just the right amount of coverage for your vehicle can be a tricky balance. For specific advice tailored to your needs, contact your broker!


RELATED: Collision vs. Comprehensive Insurance: What’s the Difference?

5. Being a high-risk driver.


Driving without caution is a mistake that’ll cost you big—and we’re not just talking about fines from the police. Speeding tickets and other minor infractions could cause your premium rates to rise, whether you’re renewing your policy or moving to a new insurer. And if you have even one major driving conviction under your belt, like reckless or distracted driving, most insurance companies won’t be as open to issuing you a policy.

Once you’re considered a high-risk driver, you won’t be able to find Auto Insurance without a significant surcharge. To avoid being in this sticky situation, be sure to stay calm and alert on the road, and abstain from distractions and aggressive driving behaviour.


RELATED: Usage-Based Insurance: Drive Smart, Pay Less

6. Missing premium payments.


Many policyholders opt to pay their premium in multiple installments rather than in a single annual payment, even if it adds up to a higher total cost. If this sounds like a more manageable option for your budget, just make sure you don’t forget to pay your installments on time, every time!

It might sound obvious, but being late on your insurance payments isn’t a mistake you want to make—multiple missed payments could result in your insurer outright cancelling your policy, with no chance for reinstatement. What’s worse, having a non-payment on your record will likely affect you for years to come, since most insurance companies will either charge you extra for a policy, or refuse to insure you at all.


RELATED: 6 Tips to Extend the Life of Your Car

7. Not shopping around and comparing your options.


No matter what type of insurance you’re looking to purchase, one of the most common mistakes you can make is to go with the first quote you receive. Think about it this way: if you wouldn’t buy the first car you see at the dealership, then you shouldn’t pick the first insurance policy you come across either. Shopping around and doing your research on the different Auto Insurance policies on the market is just as important as taking multiple vehicles out for a test drive—otherwise, you won’t even know what potential options and savings could be out there for you!

Every insurance company is unique; with different insurance products, different discounts, and even different formulas to calculate risk levels and premium costs! With all that in mind, we understand that shopping for insurance can be a complicated, time-consuming process. But the good news is: working with a broker—like PROLINK—can help alleviate that burden for you.


RELATED: 5 Advantages of Using an Independent Insurance Broker

Need help finding the Auto Insurance policy of your dreams? Look no further. PROLINK’s dedicated team of advisors will survey the market on your behalf and offer their expertise to help you weigh your options. With over 40 years in business and access to a wide network of over 30 insurance providers, we have the experience and know-how to get you the right coverage, from the right insurer, at the right price.

To learn more, connect with PROLINK today!

PROLINK’s blog posts are general in nature. They do not take into account your personal objectives or financial situation and are not a substitute for professional advice. The specific terms of your policy will always apply. We bear no responsibility for the accuracy, legality, or timeliness of any external content.

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