Seven Mistakes that will cost you

A number of factors impact how much you will pay for car insurance. Keeping your premiums low, however, will largely depend on your ability to avoid the following:

1. Driving without insurance

This is the worst thing you could ever do.  Forget the minimum $5,000 fine for your first offense (which rises to $10,000 for second and subsequent offenses), vehicle impoundment of up to three months and one-year driver’s license suspension for being convicted of driving without insurance.  It's the accident you could get into, one that’s not even your fault, which could ruin you financially and haunt you for the rest of your life.

2. Getting into an accident

Having an accident where you are partially or fully at fault (which does include what is know as a single vehicle accident - such as sliding off the road after hitting an icy patch) will impact your insurance premium almost more than anything else.  The first accident may incase your premiums by 25% but a second accident will almost certainly double it.  It takes a minimum six years for an accident to no longer impact your insurance premium. Many insurance companies will not give you their best rate until you have at least 15 "clear" years from your last accident.

3. Tickets

We're not just talking about speeding tickets here.  Any "moving violation" (and this does exclude parking tickets) such as speeding, driving without a seat belt, going through a red light or a stop sign or making an illegal turn will impact your record.  One ticket may not cost you much.  Two tickets will definitely increase your premium.  Two or more tickets combined with an at-fault accident will at least double your premium.  Remember, tickets stay on your record for three years from the date of conviction. Protect your record – drive with care and follow the rules of the road.

4. Missed Payments

Many drivers think that getting their insurance policy cancelled for non-payment is no big deal.  Think again. One such cancellation is treated like a speeding ticket.  Two or more will cost you a lot more in insurance premiums and you may be unable to take advantage of the insurance company's premium payment plan.  Make sure you pay your premiums on time and if you run into a problem call your broker immediately to see if something can be worked out.

5. Non-Disclosure

It happens.  We forget about a minor ticket we were issued almost three years ago.  However, deliberately lying about your driving record, accidents or even years licensed can result in a policy being cancelled.  If you're not caught at the time the policy is issued (keep in mind that there are very good databases containing all of your insurance records and driving record) and you do have an accident your claim can be denied due to what is known as material misrepresentation.

The bottom line is that you must disclose all of your tickets and claims.  And just because one of those tickets was received while driving in Buffalo doesn't mean in won't appear on your record - it will.  Getting cancelled for misrepresentation has the same impact on your premium as an at-fault accident.

6. Fraudulent Claims

Never, never ever make a fraudulent claim.  It could land you in jail and will most certainly result in a doubling or tripling or your insurance premium should you ever try to buy it again.  You will get your name in the Insurance Crime Database and it will follow you for a very long time.  Getting insurance for your home or business will almost be impossible.

7. Buying Car Insurance from an Unlicensed Brokerage

You’ve seen the ad.  Usually in the classified ad section of the local newspaper or even on the Internet offering huge savings on car insurance.  You're asked to pay up front typically through PayPal or a Western Union money transfer.  You get a certificate of insurance then never hear from the brokerage again.  Unfortunately this happens all too frequently and the unsuspecting buyer has become the victim of an insurance scam.  If the price seems too good to be true it likely isn't.  You should check first with the Registered Insurance Brokers of Ontario (at www.ribo.com) to see if the brokerage is in fact a properly licensed brokerage.  Be careful to enter the full name of the brokerage – scammers will often use a slight variation of a real broker's name – and make sure the telephone number matches.  You should note that Easyway is a fully licensed and bonded independent insurance brokerage.