Automobile Insurance
What anti-theft system would you suggest for my car? What factors determine my car insurance premium? Do I have to give you the names of all the people likely to drive my car? What about damage to a rented car? Other considerations on short-term rental cars
What anti-theft system would you suggest for my car?
Here are some of the various anti-theft systems in the market:
- Immobilizers (ignition-kill devices) are particularly effective in preventing attempted thefts for joyrides. However, they can easily be bypassed by members of organized crime networks. Although the discount varies by region, it is usually between 5 to 20% of the premium for theft coverage.
- As for audible alarm systems, there is no premium discount for systems that are not connected to an alarm communications centre.
- GPS systems, which were specifically designed to manage fleets of vehicles, are used to communicate the position of a vehicle. The police will then locate it. However, if thieves are armed with signal jammers, they can prevent the vehicle from being located. There is no premium discount for this system.
- Digital wireless cellular systems are primarily used as management tools. They make it possible to locate a vehicle, but the police will then track it down. There is no discount for these systems.
- Vehicle tracking systems use several advanced technologies to locate your vehicle. Some of the well-known brands include Boomerang (original version), Mobilus, and Intercepter. They use cellular communication networks and satellite to track down vehicles. Once you have reported a stolen vehicle, a mobile tracking team can locate it even in underground garages or containers. Although the discount varies by region, it is usually between 15 to 25% of the premium for theft coverage.
- Advanced tracking systems can detect the unauthorized movement of a vehicle and report it to a surveillance company, which will take action at once. Some of the well-known brands include Boomerang (2), Vigil, Navlynx, Intercepter, Econotrack, and TAG. Although the discount varies by region, it is usually between 20 to 30% of the premium for theft coverage.
- Intensive security marking or etching of vehicle parts (50 to 200 parts depending on the company) is another excellent way to dissuade organized crime networks, since the parts are then very difficult to resell. Although the discount varies by region, it is usually between 15 to 30% of the premium for theft coverage.
Before choosing the system that best suits your situation, we suggest that you discuss it with your Sogedent damage insurance broker, since insurers may have very specific requirements for certain vehicle models.
What factors determine my car insurance premium?
1. General factors
The brand, model, age and value of the car: every car belongs to a group (e.g.: 45) according to the frequency and the average cost of the losses that have affected this type of vehicle in Quebec or Canada. The higher the frequency and the cost, the higher the group and the premium. Some insurers set themselves apart by offering excellent premiums to higher groups, whereas others avoid them by withdrawing their discounts when the group attains a certain level (e.g.: above 40).
Age, sex, profession, civil status, experience and history of the driver or drivers: it all is based on statistics, and each insurer targets a market where the best premium-loss ration can be achieved in order to attract clientele that will be profitable. That is why premiums vary so much from one insurer to the next, depending on whether you belong to their targeted market or not.
The use of your car (driving only or recreation and business), as well as the annual kilometrage. You can assume that the more the car is on the road, the more it is likely to be involved in accidents or other damage.
2. Specific factors of my driving record
The effect on the premium in case of damage caused by others or collision only involving your car
Accidents you are responsible for, or collision involving only you, have a major effect on your premiums. For insurance purposes, your driving record is analyzed according to the number of years you’ve driven without an accident you were responsible for or collision. For example, a “5” record refers to five years of driving without an accident you were responsible for or a collision. If you have a 5 or more on your record, most insurers will excuse an accident you were responsible for or a collision, which means that, despite this accident, you will keep this record number. However, a second accident you were responsible for or a collision will get you a 0 record, the equivalent of a record for someone who just began to drive.
The premium for a 0 record is increased substantially (example: $1,500 versus $1,000). Since the effect of this increase will continue for five years, while dwindling from year to year, the cumulative effect over five years is already considerable (in our example, you will have paid $6,500 over five years instead of $5,000).
That’s why we suggest that you make a mutual agreement with the owner of the car that you have damaged or pay for your damage from the collision if it is minimal. In this way, you will keep a clean record and benefit from better long-term premiums.
3. Other factors to consider
Remember that preventive driving reduces the risk of an accident and that a driving course can even help an experienced driver.
Think about slowing down when you are tired or stressed or whenever the weather conditions are not good.
Try leaving earlier than necessary because that will help you stay calm in case of surprise events while on the road.
As soon as your children are old enough to drive, have them take a driving course and obtain their license as soon as possible. That way they will accumulate years of experience (even though they do not drive often) and will be entitled to better premiums.
Avoid using your cell phone when driving. In fact, a recent study conducted in England reveals that at a speed of 70 m/h :
- You can stop in 102 ft2 when driving normally;
- You can stop in 115 ft2 when driving with impaired faculties;
- You can stop in 128 ft2 when driving with a hands-free cell phone;
- You can stop in 148 ft2 when driving with a cell phone in your free hand
The choice of a deductible, which will be deducted in case of a claim, depends on your long term strategy. The lowest deductibles ($100 or $250) are more expensive, whereas a deductible of $500 or more lets you take advantage of substantial discounts. In the long term, it is worth it to pay the first $500 or $1,000 in case of a claim, rather than see your record affected for many years.
Do I have to give you the names of all the people likely to drive my car?
Statistics show that the frequency and cost of claims vary by age, experience and the sex of the drivers. Therefore, it is necessary to mention to the insurer all the drivers of your car, whether principal or occasional. It isn’t necessary to inform the insurer if you allow someone to drive the car in an emergency situation or for a spontaneous use (mechanic, to help out a friend, travel companion) (e.g. travel for less than a month); but you must make sure that this person has a valid driver’s license. In case of doubt, check with SAAQ at 1 900 565-1212 or go to their website.
What about damage to a rented car?
The Q.E.F. No. 27A rider covers public liability in case of damage caused to a vehicle that doesn’t belong to the insured, except for vehicles provided by the employer.
It is important to note that the insurer only covers the designated insured, his spouse and anyone else indicated in the Q.E.F. No. 2 (see the end of this question). Therefore, if you rent a car for a short period, it is essential to not let anyone but those persons drive it. Otherwise, the driver not covered by the insurer will have in case of an accident, to pay for the damage caused to the car.
Example: You are on a trip in Florida, you rent a car and, after a hearty meal in a restaurant, you notice that you can no longer drive. You ask Luke, a friend, to drive the car to the hotel while you sleep on the back seat. Luke burns a red light and the car sustains $20,000 of damage. Unless Luke has personal insurance covering it, he will have to pay for the car damage from his pocket since he isn’t covered by rider 27A.
Q.E.F. No. 2: This rider is used to add designated drivers (children, parents who live with you, etc.) so that their liability is covered when they drive vehicles not belonging to you. It completes rider 27A which covers damage to vehicles not belonging to you (such as vehicles rented for a short period).
Other considerations on short-term rental cars
Many credit cards offer protection equivalent to Q.E.F. No. 27A if you use it to pay for your rental. However, check the territories covered.
The protection offered by this rider is only valid in Canada and the U.S. Elsewhere in the world, you have to take out insurance offered by the rental company.
Rider 27A coverage is for CAN$35,000 or CAN$50,000, depending on the insurers. Higher amounts can be negotiated as needed.If you rent a car in the United States and that you also intend to go to Mexico, you must absolutely notify the rental company. They will provide you with protection at an additional cost.
If you rent a car in Europe and you opt for a European purchase-repurchase plan, you will usually receive the coverage you need. However, in case of a single rental, you should take out the insurance offered.
top 