Run for coverage

  As a motorist with 26 years of claims-free driving and a 1994 vehicle, I expected my annual insurance premium to drop this year when my policy came up for renewal. Instead, I was hit with a 5.6 per cent increase. Even after scouring the market, I couldn't find a lower rate. What gives?

Like many other motorists, I've become a casualty of an insurance industry slump. Profits fell by 52 per cent in 2001, the fourth consecutive year of shrinking profits. To weather the tough times, insurance companies have been spreading the pain to motorists. Double-digit rate hikes have become increasingly common thanks to a rating system that you may not have heard about, but your insurer definitely has: the Canadian Loss Experience Automobile Rating (CLEAR) system. In spite of the rate shakeup it's caused, you can still put the brakes on insurance costs.

An obvious strategy is to maintain a clean driving record and avoid speeding tickets, moving infractions and serious offences such as drinking and driving. When the weather turns treacherous, it may be wise to take a cab or public transit or just stay home. But a clean record alone may not keep your rates down. Your age and where you live also affect your insurance costs. For drivers under age 25, gender also plays a role, often meaning higher rates for guys. While you can't change your age, gender or your current driving record, you do have a choice about what vehicle you drive. And now, more than ever, that could have a profound impact on your premiums.

There was a time when most insurers based their rates on a vehicle's selling price. Today, most have adopted the CLEAR system, which gives insurers relative rankings for setting rates. CLEAR analyses the history of past claims for a specific type of vehicle to predict future losses. "Different vehicles have different track records," notes Arthur Tabachneck of the Insurance Bureau of Canada's (IBC) Vehicle Information Centre, which developed CLEAR. Some vehicles are stolen less frequently, are less expensive to repair and protect occupants better than others. (To see how yours measures up, visit the Vehicle Information Centre at the IBC Web site listed below.) Since CLEAR's introduction, drivers of some high-risk cars may have already had increases as high as 60 per cent compared to the old system, while owners of low-risk vehicles might have seen their premiums fall by 20 per cent.

Motorists in provinces without government-run insurance programs may save a bundle by shopping around. "People think a broker will always get them the lowest rate," notes Lee Romanov, president of the Consumer's Guide to Insurance, a free, national rate-comparison service. "It's a misconception because a broker deals with a limited number of insurers." Brokers typically represent only a few insurers, while agents represent just one. If you blindly accept your renewal rate, you may be paying more than you need to. According to Romanov, a 30-year-old married woman living in Ajax, Ont., with a clean driving record could pay as little as $1,138 a year to insure a 2002 two-door Toyota Echo, or as much as $2,603 - a $1,465 difference for the exact same coverage. If you have a choice when it comes to insurers (some Canadians don't), explore your options. Just remember that cars have driving records, too.

Maryanna Lewyckyj is consumer advocate for the Toronto Sun. She conducts car care seminars for women through her company, Autophobics Anonymous.

Get a rate break

• Consult the Consumer's Guide to Insurance rate-comparison service, (416) 686-0531 or www.insurancehotline.com. Have your policy handy. • After August, click Choosing your vehicle at www.ibc.ca for your car's CLEAR rating. • Get an insurance quote before you change your vehicle. • Raising your deductible will lower your rate because you're getting less coverage. • If you're a new driver, enrol in an approved driving school. • Before switching insurers, ask about early termination penalties under your existing policy. Any penalties may cancel out the savings.