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Insurance: Can You Get A Better Rate?

Car insurance bumper stickerInsurance, more than any other product or service I pay for, makes me nervous ... really nervous!

When I step back and think of it, it's probably an irrational fear, but when contemplating insurance I just picture some sinister adjuster or claims agent somewhere finding any possible means of denying my claim when I need it most to keep more profit for the faceless insurance company. Having that kind of power over me in some unknown person's hands just makes me quiver a little bit.

However, the alternative of not having any insurance at all is even worse!

Is Fear Holding You Back From Getting Better Rates?

Because insurance is closely linked to our livelihood, our families, and the most expensive assets in our lives, namely our houses and cars, we often just close our eyes and pay the bill even as it continues to rise because it's so important.

Related: Save Big Money On Car Repairs

We quickly build up rapport with our insurance agent or company along with a sense of security that isn't easy to let go of. There's nothing wrong with that! In our busy lives we also don't want to take the time to call around and find a better rate and go through the hassle of filling out all those forms especially when the whole idea makes us feel insecure to begin with.

Although, we often don't realize exactly how much we money can save by making an effort to find better rates every so often. Robb, from Boomer and Echo, went so far as to challenge his readers to take a whole day off work every year to get quotes, cut expenses, and clean up their finances. I whole heartedly agree with him and I might start doing this myself to streamline the process. He tells a story of how his co-worker saved over $1200 in a single day by doing exactly this.

There Are A Lot Of Good Insurance Providers Out There

I painted a fairly gloomy picture above, but the fact is there are a lot of good insurance companies, agents, and providers out there. I even have a couple of personal examples actually.

My father has a friend who is an insurance agent and through discussions with my dad I learned that this friend would frequently recommend insurance companies he wasn't affiliated with, thus earning no commission, if it was more cost effective for his clients to go with them. This resulted in my dad having much of our insurance through State Farm because they had good multi-product discounts that saved him a bunch of money.

This decision resulted in me using State Farm as my insurance provider for many years when I was starting out on my own simply following in my dad's footsteps. I did have a few minor claims with State Farm and I found they always paid out promptly without any difficulties and they weren't quick to raise rates after making a claim. They would give at least one more chance before being forced to raise rates if multiple incidents occurred back to back.

Recently, I decided to call up my dad's friend out of the blue and get him to run some quotes for me. After crunching the numbers, I believe I was able to save about $500 a year and get slightly better coverage by switching to one of the companies he is affiliated with. I went ahead and did it and feel confident that he will go to bat for me when it comes time to make a claim as he has had a lot of experience facilitating legitimate claims with big companies.

How To Find Better Insurance Rates

There are plenty of different ways to find better insurance rates so I'll share a few possibilities and you can use whatever one you feel most comfortable with.

The Big Canadian Banks

Many of the big Canadian banks have an insurance arm and you can deal directly with them for your insurance needs. My thinking used to automatically be that this would be the most expensive way to buy insurance because big banks love to squeeze people for money and charge high rates to their locked in customers.

Related: No Fee Banking Is Totally Worth It

That said, I have a co-worker who I spoke with a few years back who used TD Insurance for both his home insurance and car insurance needs. He lives on a really strict budget so he called around diligently to every single insurance provider he could find and none of them could come close to the rates TD were offering him. Since then, I've heard several similar stories from friends and coworkers about TD insurance, so it seems like there is at least one big bank that offers decent rates and therefore the banks are still worth a look.

Compare Rates Online

The leader in the Canadian online world for quickly comparing insurance rates across multiple companies by entering your information once is undoubtedly Kanetix.ca. I've used their service before personally and it was very helpful in getting an idea of what competitive rates are for my situation which you can use as a baseline when dealing with other companies or you can just take one of the good rates they offer and be done with it.

Try getting a quote yourself ➨

Use An Insurance Agent

Finding an insurance agent that deals with multiple companies is probably one of the easiest routes you can take when trying to find a better rate. Knowing if the agent is someone you can trust and who will always serve your best interest while giving you the best rate, regardless of the commission they make, is entirely another matter.

I'd suggest engaging at least two agents, asking them what companies they are affiliated with to make sure you get a good range of quotes, and feeling them out to see who you think will go to bat for you if you ever need help making a claim.

Call Around Yourself

This can be a time intensive process, but it can also be a fruitful one because when you call insurance companies directly you know that there are no middle men in the equation to steer you towards a higher commission for them. That way you are sure to get the absolute lowest rate because you get quotes from companies that no one else would provide you with.

Related: How To Save Money On Home Phone Service

If you have the time, give this a shot and like my friend from work you might end up with a super deal that saves you a ton of money every year.

Do Your Due Diligence

I want to give you a final reminder to be extra careful when considering changing your insurance policy. You want to make sure you understand the coverage you already have by reading your policy documents and taking notes and then be certain that you are getting equivalent coverage from the new provider as well.

It's easy to get a cheaper quote when you are getting less coverage so you have to be really careful of that. You'll also want to do some digging on how quick the companies you are considering will raise their rates and how reliable they are at paying out claims quickly and hassle-free. Once you have that information and you feel comfortable, then make the plunge and enjoy the extra money left over in your bank account when you're done!

TD Bank sponsored this post, but the content of the article was 100% researched and written by me. The story about my friend relating to TD insurance is factual and came to mind as a perfect example when they offered to sponsor a post related to insurance.

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Robb's picture

After a rate hike on home insurance premiums in Alberta this year, I called around and checked with other providers to see if I could get a better deal. I was pleased to see that my insurance provider was still doing right by me after 10+ years (in a matter of speaking. I was still pissed about the rate hike).

Thanks for mentioning my reader challenge!

Stephen Weyman's picture

Wow, aren't you lucky! It's great when you call around and you don't actually have to change anything because you're already getting the best deal but I think that is the exception and not the rule.

Of course, if the difference was only a few dollars a month or less than $50 per year, I probably wouldn't bother switching at all.

MMD's picture

I totally agree that NOT having life insurance is not an option. As responsible adults we need to take care of the ones we love by setting up these policies and putting them in place to protect our families after we're gone.

I've personally always found that calling around is the best deal. The internet is helpful to get quotes, but you usually end up with a lot of no-name companies trying to compete for your money. With insurance you'll want someone who isn't going to play games. What I did to find my provider was research the best life insurance companies and then call the rep from each. The one with the best deal (price and terms) was the one I ended up going with.

Stephen Weyman's picture

That's solid advice, thanks for taking the time to share it!

Rob's picture

Be carefull when it comes to home insurance offerred by RBC. My premiums went from 615 last year to 1000 this year, they advised this was due to a new replacement value calculation system they called IPAC. As an example RBC set the replacement value on my 22x24 uninsulated garage at 80k. I went through a local broker in Regina and was offerred insuance at a more reasonable rate.

When calling RBC they had no ability to adjust the replament cost to a reasonable amount so after 5 years of decent rates, I moved my insurance.

Stephen Weyman's picture

Thanks for the tip Rob, that's quite a large jump for sure. I think it's normal for insurance to jump around in price a little bit but that's quite drastic. Shows you they were probably doing something wrong with their calculations for a while and now they need to make up for it or are just trying to squeeze people for more money.

You definitely shouldn't up with a hike that large without anything major changing related to your insurability.

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