How is your car or home insurance calculated?

Factors that impact the cost of your car insurance

A number of factors determine the cost of your car insurance. Here are a few:

Car model

Do you drive a luxury vehicle or a modest used car? Is your car coveted by thieves?

Your insurance premium is also determined by your car’s replacement value, cost of repairs, engine power and number of doors.

Use

The risk of an accident or claim increases with the time spent driving. On the other hand, it decreases if your car is parked for weeks.

That’s why we inquire about your annual mileage when providing a quote.

Do you use your car for business or professional purposes? If so, it can affect your car insurance premium.

Risks of claims

If you belong to a group of people who are more likely to make claims, your premium may be higher.

To find out, your insurer takes into account your age, gender, address and driving record such as:

• Your years of driving experience
• Traffic violations and demerit points
• Accidents in which you have been involved

Coverage

Your choice of insurance coverage can influence the cost of your premium. For example, opting for claim forgiveness coverage may provide peace of mind but can increase costs.

Deductible

The deductible is the amount you are responsible for if you file a claim, which is not covered under your insurance.

Choosing a higher deductible can lower your car insurance premium.

Credit history

Many insurers consider individuals with excellent credit records to be more responsible on the road and in maintaining their vehicles.

You can get a quote for a lower car insurance premium if you have a good credit history.

Home insurance

When determining the cost of your home insurance, we assess the risk of loss and the likelihood of a claim.

Just as with auto insurance, your home insurance premium depends on the deductible, your credit history, your claims history and other factors.

The building

It is the key factor in determining your home insurance premium. We need information on your home such as:

• Age
• Square footage
• Detached outbuildings (garage, shed, or pool)
• Location
• Construction materials
• Heating system, especially if there’s auxiliary heating (wood heating)
• Renovations that significantly increase its value

Personal property

The actual value of your personal property to calculate your home insurance premium.

It would therefore be preferable to keep an up-to-date inventory of your personal property so that we can more easily assess the replacement amount needed if you file a claim.

Use

Certain activities that take place in your home could impact your home insurance, for example:

• Teleworking
• Home business
• Renting part or all of your home

Cost of reconstruction

We estimate the current cost of reconstruction, whether you’re a homeowner or condo owner. This includes construction materials, cost of labour and the complexity of managing a construction site.

Risks of water damage and fire

Water damage is the leading cause of home insurance claims. We assess the risk of potential damage caused by:

• A sanitary system, such as a toilet, dishwasher or washing machine
• Municipal watermain break
• Water infiltration below ground, such as water seeping into the foundation walls during spring thaw or through the roof during heavy rainfall
• Sewer backup
• Flooding

The same applies to fires. Auxiliary heating, the age of your electrical panel, the distance to a fire hydrant (or fire station) and the risk of forest fires are all factors we take into consideration when determining your home insurance premium.

Revisiting claims

Insurance is often described as a calculation of risk. But how do we assess those risks in a world filled with uncertainties? We analyze both the past and the future:

• We review the number, amounts and trends of claims from previous years.
• We anticipate the necessary payouts for the upcoming year to ensure our customers are compensated in the event of a claim.

Your broker is your ally

If you’d like more advice on how to reduce your home or car insurance, contact your broker. Your broker will assess your needs and suggest coverage that’s right for you...and your budget.