How Car Insurance Premiums are Calculated The make, model and year of your car, the records of people who are insured to drive it and where you live are all considered by insurers when setting rates. You can lower your premium by making informed decisions. A car, whether right off the assembly line or new to you, can be one of the biggest investments you make. Insurers assess many factors – including your driving record – when calculating your premium. Your insurance rates are also determined, in part, by the type of car you drive. Generally, the harder your car is to steal and the less expensive it is to repair, the less you pay for insurance.Need to Insure a Car?Insurers consider many factors when calculating your car insurance premiums. Buying or leasing a car with a lower-cost insurance rating is one way you can take control of costs. Across Canada, IBC's "Worst and Best Ten 2000-2018 Models " reports on the relative claim cost of cars by type of accident. Also consider cars rated the safest by the Insurance Institute for Highway Safety.Getting an Insurance Quote? Here's How to Lower your Premium.Provide your car's vehicle identification number or VIN to your insurer. Some cars are more expensive to insure. Without the correct VIN, you could be quoted a premium for a different - more expensive make or model - car. To save money, you can also: Increase your deductible (i.e., your share of the cost of a claim) Drop collision coverage on an older carLook into a package deal for your car(s) and home Install an approved theft deterrent system in your carFor additional tips, check out our top 10 ways to help drive down your rates.A Good Driving Record Can Reduce Your PremiumLicense suspensions, parking tickets and convictions for driving offenses all add up to higher car insurance premiums. In fact, after being convicted of a driving offence, it can take up to 6 years for your record to be considered clean again by insurers. Over the years, building a consistently accident-and conviction-free driving record can help reduce your premium. You can also: Adjust how frequently you use your carTake public transit to keep your annual kilometres lowExclude high-risk drivers from your policyWhere You Live Can Increase Your PremiumDid you know that urban areas have varying degrees of higher claims costs? Higher density equals more risks, more accidents and more thefts. For example, using 2011 statistics, the average claims cost per vehicle in one city was 25% above that of a neighbouring city.While there are good drivers in every city, on average, some areas have a higher than average claims costs than others. And as claims costs rise, so do premiums.How CLEAR and Telematics Can Save You MoneyInsurers use the Canadian Loss Experience Automobile Rating (CLEAR) system to assess the likeliness of your car being involved in a claim and what it will cost. Current data for each make, model and model-year of car is used to calculate expected and actual claims loss experiences. Choose a car with a lower claims risk and CLEAR number and you can expect a lower premium.You can also learn about new cost-savings offered by telematics . By installing a technology device in your car that records your driving activities, insurers can use this information to personalize your insurance premium. Related ServicesCanadian Loss Experience Automobile Rating (CLEAR)The CLEAR system rating is an accurate and credible assessment of the expected and actual claims loss experience for each make, model and model-year of private passenger vehicle.How Cars Measure UpThe property and casualty insurance industry gathers and analyzes statistics on the number and cost of collision, comprehensive, direct compensation property damage (DCPD) and accident benefit claims for the most popular Canadian models of cars, passenger vans, SUVs and pickup trucks. TelematicsInsurance telematics – also known as usage-based insurance (UBI) or pay-as-you-drive – represents a shift in how insurance is administered and how premiums are calculated. Telematics has the potential to reduce your premium costs and generate significant benefits to society. Useful LinksCost ControlThere are many ways you can control insurance costs and lower your premium. Shop around and ask your insurance representative for more information about the options below and other savings opportunities.Top 10 Stolen Vehicles Each year, IBC produces a list of the top 10 stolen vehicles in Canada. IBC also reports on the top 10 stolen vehicles and trends in organized auto theft for specific regions in Canada.Insurance Buying TipsInsurance is a significant investment. Before you purchase coverage, getting answers to key questions can help you make informed decisions. How To Buy InsuranceWhen driving a car, buying a home or establishing a business, insurance can give you peace of mind. Learn about the purchasing options available in your province.