Figured I’d post this to help out my friends in a similar age group who have been driving for a few years. I was pretty surprised (in a good way!) to find a rather large reduction in my Ontario car insurance premium today by grilling my broker. I’m assuming that others may be able to benefit from this, too, if their time licensed is within the same range.

My car insurance premium has been a sore spot for me for a while now, but I’ve chalked it up to mostly being due to the fact that I’ve been driving a two door car. My premium is the same as other friends with similar situations, but my car was a 1994 model while theirs were usually much newer. I recently purchased a new car (2003 model) and figured that I would see a difference in my premium, which in the end ended up being $130.00 extra per year. Not a big deal.

Out of curiosity this week I began browsing the Kanetix auto insurance site to browse quotes. I haven’t done this in a while. What I found was that while most companies provided me with a quote on par or slightly above my current premium, a few services such as Bel-Air Direct (who my friend Chris swears to avoid) had posted quotes much lower than my current premium, some up to nearly 50% lower. Hmmmm. Why is this the case?

Like most car insurance subscribers, I don’t think much about the ins-and-outs of the system or really care to do much more than pay the monthly fee and forget about it. I’m one of those lazy people who does not like to dive in with things like this to look for deals, which sometimes serves me wrong. Having said that, I was quite intrigued by the prospect of cutting my insurance premium in half.

I stopped by my insurance broker today and asked them about the quote that I found online. While they generally discredited anything that Bel-Air Direct had quoted (I guess they have a reputation for low-balling quotes online), they pulled up my file to look into the issue for me. What they had found is that I am currently listed as a 3-star driver rating, which generally means that I have been driving for three years. Until six months ago the star rating would begin accumulating after the date in which you receive your G2 license in Ontario’s staged program. What I found out today was that the star rating system was changed six months ago to begin using the date in which the driver received their G1 license, which I had received in March, 2000.

Although my insurance broker was unable to give me an exact figure for my new premium (needs to process still), he explained the following: each year that you are insured with a clean record adds a star to your record. As my G2 was issued in early 2004, I am now rated as a 3-star driver. However, changing the begin date to March, 2000 will position me as either a 5-star or 6-star driver going forward from today.

The difference? Each star added accounts for an approximate premium reduction of 15%. You do the math.

So, if you have licensing dates similar to the ones I have described then I would suggest you look into this. If you save money than you basically owe me a beer, or five. Again, as I understand, recognizing the G1 licensing date as the genesis for your star rating was a change that was made to the Ontario insurance system 6 months ago. I wouldn’t expect any insurance companies to be proactive in notifying their customers :) about this change, so you’ll have to do some investigating for yourself.

Lesson learned: Ask more questions & never be satisfied!