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By: Kade Phillips
It may feel as if you have little control over your car insurance premiums. In reality, your rates are based largely on the decisions you make year after year. Make the right choices, and you'll enjoy more affordable coverage. Commit a few mistakes, and you'll end up paying far more than necessary.

With this mind, we'll share six ways consumers sabotage their goal of enjoying low auto insurance rates. Some of the following occur by accident; others happen by choice. Each case can cause your premiums to quickly rise.

#1 - Receive An "Impaired Driving" Conviction

If you drink alcohol and get behind the wheel of your vehicle, your ability to steer and make sound decisions on the road will clearly be compromised. From your insurer's point of view, your impaired ability to drive safely represents a higher degree of risk. You're more likely to make poor decisions, or react slowly to your driving circumstances, both of which may result in an accident.

In the event you are convicted of a DUI, you are not required to inform your current insurance company. However, the conviction will display on your driving record, which your insurer likely checks on a regular basis. When they see the conviction, they will raise your rates substantially, and possibly cancel your policy.

#2 - Buy A Car With A Poor CLEAR Rating

Car insurance companies in Canada rely on the Canadian Loss Experience Automobile Rating (or, CLEAR) system to determine the claims-related risk associated with any given vehicle. The more claims a car "generates," and the higher the cost of addressing those claims in the past, the higher the premiums will be when applied to that vehicle.

If you're planning to purchase a new car, keep its CLEAR rating in mind. A vehicle that is associated with expensive claims in the past - based on its make, model, and year - will be more costly to insure. Buy one that is seldom stolen, and does a good job in protecting its occupants.

#3 - Cause A Collision

Causing an accident is likely to send your premiums through the roof. It sends a signal to your insurer that you occasionally make poor decisions on the road. This increases their risk, especially since a future mistake can cause injuries and fatalities. The result is that you'll be required to pay much higher rates to compensate for the increased risk.

The exception is when your insurance company offers a feature called accident forgiveness. Here, your insurer may "forgive" an at-fault collision if your driving record is otherwise clean. Your premiums will increase, but are likely to do so mildly. Keep in mind that "forgiveness" is rarely extended for a second collision.

#4 - Customize Your Vehicle

It may be tempting to install a new engine into your car that offers more power than your current engine. You might also want to equip your wheels with state-of-the-art rims. Realize that these and other modifications can result in a rate increase. Why? Because specialized parts are more costly to replace than those that are installed at the factory. This means your insurer's risk of insurance loss is higher. The higher their risk, the higher your premiums.

#5 - Move To A Less-Than-Ideal Area

Some areas have a higher incidence rate of auto theft than others. Some encounter more accidents than others. If you live in a location where both seldom occur, and relocate to an area where both occur frequently, be prepared to pay higher premiums. Again, the reason is because your insurance company's risk of claims-related losses is higher. Your vehicle is more likely to be stolen, vandalized, or involved in an accident.

#6 - Regularly Neglect To Pay Your Premiums On Time

Forgetting to pay your auto insurance premiums once in awhile is unlikely to have an effect on your rates. Insurers realize that policyholders occasionally forget or need an extension. Some companies even extend an automatic grace period. But if you regularly fail to send your payments in on time, your insurer may eventually cancel your policy.

Cancellation can make finding a new insurer difficult. In some cases, you'll need to pay your entire year of premiums upfront. In other cases, you'll be forced to pay higher rates to compensate the new insurer for the risk.

As mentioned earlier, the decisions you make throughout the year have a large influence on your car insurance premiums. Make the right choices, and your premiums will stay at a reasonable level.


There are a whole host of contributers when it comes to your auto insurance rates. Visit the insurance news channel ( ) for in-depth insight into the factors which contribute to your auto insurance premiums.
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