Car insurance is getting pricier. 5 ways to try lowering your premium

Jenna Kardal was floored by the jaw-dropping initial quote she received when seeking out car insurance — a shock after having driven for years under her parents' plan and since her car was bought used, already about a decade old.

"I was like, 'You cannot be serious,'" the now 30-year-old Calgary driver recalled in an interview with Cost of Living. "What all is included with that — and how can we shave that down?'"

Then in graduate school, Kardal said this was a common conversation for her at the time, to try saving money wherever possible.

She ultimately netted a fresh quote of $130 per month to insure her car, a 2002 Nissan Maxima she lovingly named Maxwell. That fell to $108 after a couple more years of good driving.

While not the most exciting household expense, car insurance is a necessity for drivers. Yet with the cost of insurance on the rise, experts say taking the time to review your driving habits and policy details can mean a welcome difference in what you pay.

Car insurance premiums saw a brief period of decline in the middle of the COVID-19 pandemic, influenced in part by people driving less along with discounts and rebates offered by government insurers in provinces like British Columbia, Saskatchewan and Manitoba, according to Statistics Canada.

Still, nationally, premiums have been trending up in the past decade: 36 per cent from 2014 to 2024, the agency said in an April 2025 report.

There are many reasons for the higher costs, from increases in auto theft to cars filled with high-tech components that cost more to build from the get go, according to insurance industry expert Sherif Gemayel.

"Replacing a windshield is not just a windshield anymore," said Calgary-based Gemayel, CEO of Trufla, a company providing tech solutions for the industry. For instance, a windshield in a new car might have cameras or sensors integrated, so it's not necessarily a straightforward repair.

"Fixing those vehicles is a lot more expensive. Replacing the vehicles … is a lot more expensive. And the cost of litigation has gotten a lot more expensive."

Inflation has also meant costlier repairs, replacement parts and labour, added Aaron Sutherland, vice-president of Pacific and western regions for the Insurance Bureau of Canada.

Sutherland predicts the Canada-U.S. trade war, and more frequent extreme weather events — like floods, wildfires and hailstorms — will also exacerbate rising premiums. That's all the more reason he believes Canadians should ensure "you're getting the best bang for your buck" by reviewing their policies.

"Insurance is what's there to protect you financially should the worst occur and so it's really important we're all taking the time to understand what we're covered for," Sutherland noted from Vancouver.

Here are a few tips experts suggest Canadians consider.

Kardal's approach of speaking up about one's finances and asking for options is a great start. "You never know [when] you can get a better deal," she said.

Canada's insurance marketplace system is competitive, noted Sutherland, so carving out some time to research and compare offerings — for instance with an insurance broker — is worthwhile.

"In many cases, you may be able to find a cheaper alternative from another company," he said.

"If you are concerned about your price point, talk to your insurance representatives about your coverage, about the different products you have, and how you may be able to tailor that to better meet your needs."

Choosing a higher deductible — the amount a customer agrees to pay out of pocket before an insurance company pays the remainder — is one way to lower costs.

"It used to be that deductibles around $250 were kind of commonplace. Then it went up to $500, then $1,000. Now, it's not uncommon to hear people having $2,500 deductibles, $5,000," in order to bring down the premium, Gemayel said.

Usage is another factor to consider.

"If you're only driving a couple times a week — running a couple errands or whatever — the likelihood of you getting into an accident is much smaller than if you were commuting to work through rush hour every day," Gemayel explained.

Perhaps you're working from home more, taking public transit or cycling to the office. Gemayel suggests looking into "pay-as-you-go" insurance, where providers track your mileage through an in-car device.

You only pay for the kilometres you drive, though your total mileage must stay below a certain threshold to find savings.

If a car is 15 years or older, Gemayel suggests consulting a broker or advisor to discuss the value of your vehicle and your risk tolerance for dropping collision coverage, which helps pay for car repairs or replacement in case of damage from a collision.

That could reduce your premiums by 30 per cent or more, he estimates, though what car you have and your driving record would also be considered.

When she was on a tight budget — and Maxwell close to 20 years old — Kardal decided to drop collision.

"If you are ridiculously broke … like broke like I was, maybe skip collision and skip the comprehensive. And if that buys you a couple extra cups of noodles, then that's a win," she said.

But she also warned about carefully weighing the risk.

"If you're in a collision and then you need that [insurance] money from the collision to get you to your next vehicle, unless you have that money somewhere else available to you immediately, you are kind of screwing yourself over."

Newer insurance offerings may also provide savings. For instance, another type of usage-based insurance involves tracking your driving habits.

A mobile app or in-car device gathers data over time about what time of day you typically drive and instances of hard braking, speeding, hard acceleration and other actions "known to cause accidents," Gemayel explained.

"If I drive well … I can bring down the cost of my car insurance. And for some insurance companies, it's 25 per cent. It can be considerable."

While careful driving can reward you with lower premiums, if the collected data reveals a pattern of driving deemed risky or unsafe, that could mean getting penalized with surcharges once renewal time comes around.

Sutherland also noted that this usage-based offering isn't yet available everywhere in Canada.

Reviewing one's insurance policy each year isn't exciting, even to "an insurance guy," Gemayel admitted.

"But those that have insurance and those that used the insurance — that have had claims — are extremely thankful for the fact."