Know what to look for in your auto insurance policy
You probably know that in Ontario, you must have at least $200,000 of third-party liability coverage in order to drive a car legally. But what are some of your other insurance options?

• Increased liability: in order to protect you from potential lawsuits, you should have at least $1 million of liability coverage and would recommend having $2 million.  Current lawsuits are often awarding settlements in excess of $1 million.
  
  
• Loss or damage to your automobile: collision, fire and theft can leave you without a vehicle. Most drivers opt for protection against these common risks.
  
  
• Comprehensive coverage: many drivers appreciate the peace of mind that comes from having their vehicle covered against all sorts of unintentional damage or loss.
  
  
• Loss of use: this optional protection pays for the use of a rental car while your car is being repaired or replaced after an insured loss.
  
  
• Legal liability for damage to non-owned automobiles: optional protection for liability and physical damage to a short-term rental car.
  
  
• Waiver of depreciation: if this clause is included in your policy, you will receive the undepreciated value of your new vehicle when you are reimbursed for an insured loss. This coverage is especially valuable if you drive a new car, high value or classic car.
  
  
• Family protection endorsement: provides additional compensation to cover your loss if you are involved in an accident where the other driver has minimal liability limits

How are my rates calculated?
Insurance providers have completed extensive studies and collected databases full of statistics on claims and accidents. Based on all of this information, they can use mathematic formulas to calculate the odds that any particular person will make a claim and what the average cost of the claim will be. This "actuarial modeling" is used to assign rates to different categories of drivers. Depending on what category you fall into, the insurance company will assign the rate associated with that category.

Auto insurance categories are based on age, gender, licensing status and driving experience in Canada, motor vehicle accident and conviction record, where you live (high/low density, urban/rural), use of your vehicle (business/pleasure), and year, make and model of vehicle (market value, theft potential, repair costs).

Insurance providers and brokers do not have the ability to offer consumers just any premium. This is because automobile rates are regulated and must be filed and approved by the government before they can be released to the public.  Once these rates are approved, the insurance provider and brokers are not permitted to deviate from these rates until a new set of rates has been formally approved.

Since insurance providers do compete for business, some charge less for higher risk drivers, and others are willing to offer better rates for lower risk drivers.

Your Stevenson & Hunt Advisor can help you select the best insurer for your particular driving profile.