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article image7 things to avoid if you faint when you see your car insurance bill

Saving on car insurance should be something on the mind of every driver. Everybody knows that accidents and traffic violations can increase premiums, but even if you're the safest, most law-abiding driver you could be facing high costs.
Here's a list of ways you may be (inadvertently) causing increases in your insurance rates:
1. Getting a ticket
Every insurance company has its own distinct rules and calculations, but a traffic violation is pretty much a guarantee that you're about to pay more insurance. The one general exception is parking tickets, which usually have no effect on your license or insurance record (unless you fail to pay tickets and your license is suspended).
All of the obvious traffic offenses can boost insurance rates, such as minor violations – not signalling, not wearing a seat belt, speeding, disobeying traffic signs, following too closely, running red lights. The same goes for major and criminal offenses, from driving without insurance to driving while intoxicated or refusing police requests. Tickets remain on your record for three years from the date of conviction.
2. Being at fault in an accident
If you make a claim for a car accident for which you've been determined to be the party “at fault,” prepare to see your insurance rate skyrocket. The only possible reprieve from this is if you have coverage for “accident forgiveness” on your policy, but this covers only the first at-fault accident on your record.
In many cases, you won't see the premium increase right away; it will hit you after you renew your car insurance. Even small fender benders have been known to result in increases as high as $3,000; that's an extreme case, but it all depends on your insurance company and whether it considers you to be a risk for further claims. An at-fault accident will remain on your record for six years.
3. Buying a new car
The type of car you drive is a considerable factor on how much you pay for insurance. An older car depreciating in value may cost a lot to insure, depending on the car, but once you decide to replace it, chances are your wallet will take a hit. You’re a target especially if you’re driving a luxury car or a sports car – the kind that would cost a lot of money to repair after an accident.
Obviously you'll have to replace your car sometime in the future; it won't last forever. When that day comes, make sure you get insurance quotes before you buy a new car. Maybe you can find another firm with a better deal. At the very least, you'll be better prepared to deal with your current firm's rate increase, so it won't be as much of a shock.
4. Increasing your commuting distance
According to insurance-firm logic, the more you drive, the more likely you are to get into an accident or to add rapid wear and tear to your car. So the longer you spend commuting to work each day, the more you pay for insurance. If you work in downtown Toronto, you'll pay a lot less for car insurance if you're commuting from a suburb like Etobicoke than if you're coming from cities like Hamilton or Barrie.
It would seem reasonable to live closer to where you work; not only would you save a lot of valuable commuting time, but you would also theoretically lower your car-insurance premium. But before you pack up and move to that downtown condo, another way you might unwittingly increase your premiums is...
5. Moving to a more populated area
Living in the big city is another way to jack-up your insurance rates. Insurance companies tend to adjust premiums according to your postal code, and they assume that far more car accidents happen in densely populated areas with high traffic. Residing in the suburbs or a small town, by contrast, is seen as less of a general risk, and living out in the country is considered the safest of all.
And believe it or not, even where you park your car at home can have an effect on your insurance premiums. At night, is your car out on the street or nestled safely in a garage? If it’s on the street, is your car in a safe neighbourhood for vehicles? Is there vandalism in the area? These things do matter.
6. Adding another driver to the policy
Once you add one of your kids to your insurance policy, expect an increase in cost. And there are several variables to keep in mind with this change. For example, an occasional driver typically costs less than a full-time one, and age is also a factor: an older, more experienced teenage driver with a clean record is often cheaper than a newbie.
It's also worth noting that many Canadian insurance companies still charge more for male teenage drivers than for female teens (a practice that's now illegal in Europe).
7. Failing to take advantage of discount packages
Some insurance companies offer reduced pricing for customers who employ the firm for multiple services – including vehicle, home and other types of insurance. Others have their own special discounts for students, retirees or customers with more than one insured car, with clean driving records or with hybrid cars. When getting insurance quotes, always try to find out if you qualify for a discount or package. It may save you a few financial headaches in the long run.
These are seven important ways you can prevent yourself from paying too much for car insurance and realize you always have the option to shop around for a new insurance company with better quotes.
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