A closer look into cheap car insurance

A cheap car policy lets you tick off that box that says, “Yes, I’m legally covered to drive this vehicle.” It’s the law, and there’s no way around it. So going for the most budget-friendly option means you’re meeting this mandatory requirement without putting too much of a dent in your wallet.

But while your bank account might be nodding in approval, it’s important to know that cheap car insurance often means minimum coverage that could be leaving gaps in your protection. Signing up for the cheapest car insurance you can find might seem like a good idea for your financial goals at first glance. But the reality is, cheapest isn’t necessarily the best—and paying less for your insurance may cost you more in the long run.

Before you begin shopping for bargain insurance, understanding the legal essentials of car insurance and some common terms you might encounter can be helpful. 

Legal requirements

• Car insurance. You can't legally drive a car in Canada unless it's insured. And driving without insurance can come with some hefty penalties. Which means you might be looking at not just a ticket and a large fine, but possibly a licence suspension too.
• Proof of insurance. This is mandatory across all provinces: You must always carry proof of insurance when driving.

Common car insurance terms

These are some of the terms you'll likely come across when shopping for car insurance in Canada:

• No-fault car insurance. Several provinces, including Ontario and Quebec, have a no-fault system. With this kind of system, you file a claim with your own insurer—no matter who is responsible for the accident. 
• Comprehensive coverage. Comprehensive coverage protects against risks like theft and vandalism. It can be key if you're looking for coverage that goes beyond accidents.
• Collision insurance. With collision insurance, you get coverage that helps pay for repairs to your vehicle if you hit another vehicle or a stationary object.
• Accident benefits. Accident benefits can be helpful for getting full access to medical care and covering any medical fees if you're injured in an accident, regardless of fault.
• Uninsured driver coverage. This type of coverage protects you if an uninsured driver damages your vehicle or causes personal injury.

Choosing the cheapest car insurance can be tempting, but the price tag on your premium shouldn't be your only consideration. You want to make sure you’re getting the right protection and support when you need it most. Here are some key factors to consider before making your decision:

• Review coverage limits. While you don’t want to overpay for unnecessary extras, you also don’t want to be underinsured. Whether it’s a high deductible or inadequate property damage coverage, having insufficient coverage for your needs can potentially lead to significant out-of-pocket expenses down the road.
• Understand policy exclusions. Read that fine print. You want to be aware of what incidents, uses, or damages are excluded, to prevent any unpleasant surprises if you need to file a claim. For example, if you use your vehicle to provide rideshare or taxi services, check your policy to make sure there's no exclusion that might impact coverage in this situation.
• Check for additional perks. See if there are any perks you can take advantage of. Are there extras offered, such as added benefits for good drivers?
• Research the insurer. What’s the company’s track record and reputation in your province for reliability? Check out online reviews at reputable review sites to gauge how well past customers rate the insurer on things like payouts.
• Consider the payment options. Sometimes what may seem like a great deal isn’t really when you take a closer look. Ask questions like: Can you pay your insurance premiums monthly or annually? What payment methods are available? 

Let’s look at TD Insurance to see these factors in action. When you purchase car insurance with us, you’re getting more than the minimum auto insurance coverage: You’re getting coverage that fits your needs, the ability to manage your policy online, access to licensed insurance Advisors over the phone or through secure chat, and flexible payment options.

Plus, you get access to additional benefits like our Claims Free Reward and TD Insurance Auto Centres. Our TD Insurance Auto Centres provide a one-stop solution for on-site claims advice, repairs, and rentals. These are all important considerations when you’re shopping around for the right insurance for your needs.

Smart shopping can help you get the best deal possible—without cutting corners on the quality of your coverage.

• Compare insurance providers. Just like you wouldn’t buy the first car you see, don’t say yes to the first insurance quote you get. Compare what each insurer offers for the price—and to make a fair comparison, be sure the quotes are for the same type of coverage.
• Raise your deductible. If you’re comfortable paying more out of pocket if an accident happens, consider increasing your deductible. With many providers, a higher deductible often means a lower premium.
• Bundle and save. Do you have homeowners or tenant insurance? See if you can save by getting your auto insurance from the same insurance company. It’s like buying in bulk—often, the more policies you have with the same insurer, the more you save.
• Check for savings. Ask if there's anything that will reduce your premiums. Whether it’s a reduced rate for having a clean insurance history or a safe driving record, winter tire or alumni discounts, or a discount for having multiple cars on the road, it never hurts to see what might be available.  With TD Insurance, for example, there are over 30 ways to save on your home and car insurance.
• Keep your policy updated. Coverage needs can change from year to year. Maybe you’re driving less these days so you’re not racking up the mileage you used to. Or your oldest just moved out and now has their own home and car (and collision insurance!). Reviewing your policy yearly can lead to coverage adjustments that help keep your costs down.

Getting your licence is an unforgettable milestone, and one well worth celebrating. Now’s not the time to let the costs of car insurance for new drivers dampen your excitement. Here’s a rundown of tips that can help you keep your premiums as low as possible, without skimping on your coverage:

• Take a driver’s training course. Many insurers offer a discount if you’ve completed a driving education course. Not only do these courses improve your skills and help reduce the risk of an accident, having a completed course under your belt shows insurers you’re serious about safe driving.
• Save with safe driving. If your insurance company offers one, consider enrolling in a program like the TD MyAdvantage program. These kinds of usage-based insurance programs reward you with discounts based on safe driving—a potential win-win situation, as you’ll have a direct incentive to practice safe driving behaviours too.
• Choose your vehicle carefully. The type of car you drive can have a big impact on your car insurance costs. Choosing a car with a strong safety record and low repair costs may lead to more affordable premiums.
• Regularly review your policy. Just like more experienced drivers, as a new driver your driving circumstances and needs can change. By reviewing your policy on a regular basis, you may be able to adjust your coverage for added savings as you gain experience and confidence.

The cheapest auto insurance you can find doesn’t always mean insurance that’s good value for your money. You can recognize the difference by shopping around and taking a closer look at the best insurance options available. Be sure to keep an eye on factors like coverage limits, policy exclusions, customer service, and available discounts. Remember, the cheapest car insurance may not be as good as a policy with coverage that meets your needs.

Ready to get started? Get a car insurance quote today. And be sure to check out more ways to save on your car insurance.