How exactly is my vehicle rated for Insurance?

September 19, 2017 by Tammy Hull

Why does the insurance cost more for my "Honda" than it does for my more expensive "Lexus"?"


Vehicle Rate Groups Ontario

You wouldn't be wrong by assuming the more expensive the purchase price of a vehicle, the more expensive the insurance will be… well.. that's exactly how it used to be. That is until the CLEAR system was developed! CLEAR stands for Canadian Loss Experience Automobile Rating and it is a rating system that calculates rating numbers based on ACTUAL loss experience rather than the value of your vehicle. This means the vehicle you are driving is premium rated based on all of the claims made for that exact Year Make and Model.  Each year claim statistics are calculated for each and every model of vehicle on the road today. Whether a glass claim, an injury loss, or a simple fender bender, all are taken into account. Once the calculation is determined and paired with a particular make and model, a rate group from 1 – 60 is assigned to that vehicle. The higher the rate group, the higher you can expect to pay in premium for that beloved vehicle you wanted so very badly. Above is an example in which a 2009 Honda Civic driver, pays hundreds of dollars more than their 2016 Lexus. Stats have proven, Honda Civics are the most commonly stolen vehicles in Ontario thus, the rate group for comprehensive is significantly higher than that of a Lexus. Of course, many other rating variables are taken into consideration however, CLEAR plays an important role in what you pay.

Find out more here at the Insurance Bureau of Canada CLEAR Rating System How cars measure up!


How Cars Measure up the Insurance Bureau of Canada?

The Insurance Bureau of Canada uses its specific measures to determine the value of insurance by the model of the car. Each model has a a different value, which helps to determine if the car is more or less problematic in comaprison to each other. To determine these values, the bureau considers the model, body style, and year of each vehicle. It means that depending on your car, you may pay more or less insurance.

What Factors Determine Your Insurance Premium?

Many factors affect the final value of your insurance premium. One of them is the model of your car. A vehicle with anti-theft features will not pay insurance premiums as high as one that doesn’t have it. Also, young people pay more insurance because they tend to be more reckless. Finally, your driving habits are a big part of the equation. If you’re often getting tickets for reckless driving, you’ll end up paying a lot more on insurance than a driver who cares about safety on the road.

Should I Go Through Insurance or Payout of Pocket?

It depends on the situation. Calling insurance or paying something out of pocket may be good for different situations. If the claims involve other people, you should probably call insurance. But if it’s only your vehicle and the damages are not extensive, then pay it out yourself. Why? Mostly because filing insurance claims may prompt the value that you pay in insurance to go up, so it’s a bad idea in the long term.