What Are Car Insurance Premiums?

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What does a premium mean for car insurance?

What are car insurance premiums? It’s a good question, and it sounds like something very fancy, doesn’t it?

In reality, your car insurance premium is simply the amount you have to pay in exchange for your insurance. You can often pay monthly or yearly, or perhaps on a different schedule.

what are car insurance premiums

How Are Car Insurance Premiums Calculated?

Auto insurers typically use several factors to determine your car insurance rates. Some factors include:

  • ​The make of your car (Honda, Cadillac)
  • Model of your vehicle (Civic, Escalade)
  • Year of your car
  • The driving records of people who are insured to drive the car
  • Where you live
how are car insurance premiums calculated

What won’t help Your Car Insurance Premium

  • License suspensions
  • Parking tickets
  • Convictions for driving offenses
  • It can take as long as 6 years for your driving record to be considered clean again by auto insurers

How to lower car insurance premiums

  • Using your car less frequently
  • Keep your annual km low by taking public transit or use other alternative sources of transportation
  • Exclude high-risk drivers from your policy
  • A crash-free driving history
  • Shop around for your car insurance, ask for quotes, compare different prices
  • Consider dropping the optional collision insurance (to cover the cost of repairs to your vehicle in a collision), if your vehicle doesn’t have a high resale value
  • It may be possible to combine your auto insurance with your home insurance policy if you have one. Worth looking into.
how to lower car insurance premiums

Choose the right vehicle

Less expensive car insurance has been found co-existing with the following traits in vehicles.

  • Cars with adequate safety features such as airbags, brake assist, etc.
  • Vehicles with high test scores on crash-tests (Mazda 3, Honda Insight, Honda Accord, Subaru Outback, Subaru Legacy, Nissan Altima, Nissan Maxima, Ford Explorer, etc.)
  • Automobiles with less powerful engines

How much are car insurance premiums?

Insurers assess so many different things when calculating car insurance premiums.

So it’s very difficult to say how much they will be for any given person. Each person and their circumstances are so unique.

Average U.S. Premiums

If we’re talking about ballparks, the average cost of basic (minimum) car insurance premiums is around $565 in the U.S. per year.

The average cost for full coverage (liability + collision + comprehensive) auto insurance for one year in the U.S. is around $1,674.

  • If your car is hard to steal, insurance will be less.
  • Cars that are not expensive to repair, will not be too expensive to insure
  • In areas where crime is rampant, cars will be more expensive to insure
  • If you live in the middle of nowhere where there’s no crime, cars will likely be cheaper to insure

Urban Vs Rural Areas

No, not Kieth Urban. Urban areas (large cities or metropolitan areas) simply – and by their nature – tend to have higher claim rates compared to their suburban or rural counterparts.

There’s just more people, more excitement, more risks, more collisions and crashes, and more theft and vandalism.

Insurers need to make up for this extra cost by charging more for auto insurance in these popular urban areas.

how much are car insurance premiums

car insurance cost a month

The average car insurance cost per month in the U.S. is around $130. Of course, with all these varying factors, it’s impossible to say what your particular rate will be.

Average Yearly Costs For Canadian Provinces *BC Folks look away

  • BC – $1830
  • Ontario – $1520
  • Alberta – $1310
  • Saskatchewan – $1230
  • Newfoundland & Labrador – $1160
  • Manitoba – $1135
  • Nova Scotia – $890
  • New Brunswick – $860
  • Prince Edward Island – $815
  • Quebec – $715

Top 10 Stolen Vehicles in Canada

car insurance cost a month

Thieves steal cars to commit a crime, to quickly sell them abroad, to sell to an unsuspecting buyer, or to simply get somewhere.

If your car is on this list of most commonly stolen vehicles, your premium will likely be higher. This is because the vehicle is seen as risky in terms of insurance.

In other words, the chance of that vehicle being involved in an expensive insurance claim is quite simply more likely compared to other vehicles.

And you someone has to pay for that.

The top 10 most frequently stolen cars in canada in 2020

  1. 2018 Honda CR-V
  2. 2017 Lexus RX
  3. 2017 Honda CR-V
  4. 2018 Lexus RX
  5. 2018 Ford F150 4WD
  6. 2019 Honda CR-V
  7. 2018 Toyota Highlander
  8. 2017 Toyota Highlander
  9. 2019 Lexus RX
  10. 2017 Dodge Ram/Ram 1500

Top 10 Least Stolen Cars in the U.S.

Perhaps you could save yourself a few bucks by driving one of the following vehicles, which have been identified as the least stolen.

  1. BMW 3 Series
  2. Tesla Model S
  3. Tesla Model X
  4. Chevrolet Equinox
  5. Buick Encore
  6. Subaru Legacy
  7. GMC Acadia
  8. Subaru Forester
  9. Volkswagen Beetle
  10. Subaru Outback

Key Fobs

key fob

The key fobs that many new vehicles commonly come with nowadays are actually bad news for those of us who don’t enjoy our car being stolen.

It seems that the bad guys have perfected the art of a relay attack on the fobs.

This means they can capture your key fob radio frequency and then relay it to a buddy, who can then unlock your doors using the radio frequency.

Any vehicle that has a key fob – and not an ignition immobilizer – is at a higher risk for theft. Ignition immobilizers are great because they prevent a vehicle from being hot-wired.

What determines insurance costs at ICBC

  • Experience – more experienced drivers pay less
  • Crash history – the more you crash, the more you pay
  • Who drives your car and their experience and crash history
  • Where you live – rates vary around the province of beautiful British Columbia
  • How you use the vehicle – for business or pleasure
  • There are discounts for those who drive 5,000 km a year or less, discounts for advanced safety technology, and discounts for anti-theft devices
  • Your level of coverage – optional coverage such as collision, comprehensive, or extended third party liability costs more
  • The age, make, model and typical repair costs for your vehicle
  • Your deductible – the lower the deductible, the higher the insurance cost

Get an ICBC insurance estimate.

Car Insurance Premiums

Summary

It’s obvious that a lot of different factors come into play here. If insurance premiums are a massively important thing to you, and you need to keep them low, there are certain things within your control.

Since moving isn’t always a realistic option, do remember that the car you choose to drive is one thing that’s 100% in your control.

Not to mention how you drive it, where you drive it, and who you let drive it; all that fun stuff that goes into car insurance premium calculations.


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