Myth busting: Automobile Insurance

Posted by A&A Editor

Why isn’t my premium going down as my car gets older?

Well the simple answer is not only do you have a rating as a driver but your vehicle also has a rating based on claims experience statistics for similar year make and model of vehicle.  Of course, the value of your vehicle will factor into determining your premium to a certain degree, but not necessarily as much as you might imagine.

The vehicle rating system used today is called CLEAR : Canadian Loss Experience Automobile Rating.  The CLEAR system is built upon actual insurance claims data for all vehicles made for the Canadian and U.S. markets.   All rate groups are updated each and every year to reflect such factors as aging, declining values & updated claims experiences.  

“What the actuaries look at is the frequency and cost of claims for that type of vehicle and the severity of those claims in terms of repairs, accidents benefits, “A&A Insurance’s Krista Fraser, R.I.B.O., explains “When a claim is processed, accident benefits [for injuries sustained] and third-party liability are the two highest payouts”

So, with this information a vehicle getting older does not necessarily mean that the claims experience for this vehicle will improve, in some cases the claims rating is negatively impacted with vehicle age if claims frequency or severity worsen.  

For consumers the current vehicle rating for your vehicle will listed on your policy documents in the rating section – the same area where your own driving record is listed.  Given these ratings are updated annually you may see a change on your documents in these areas from one renewal to the next.  

If you are looking at purchasing a vehicle you may wish to refer to a publication from the Insurance Bureau of Canada entitled “How Cars Measure UP” found at to get an idea of some of the better rated vehicles.  Fraser also says: “I would recommend checking in with your insurance company and getting rating information. Different models of a vehicle can have different premiums – and that should be free for anybody who wants to consult with their insurance company.”  

Ideally, when looking for a vehicle insurance quote, narrow down what you are considering purchasing to 2 or 3 choices and have vin numbers available (so the exact model can be quoted) and call your insurance broker today to discuss YOUR specific insurance needs.  

A broker is here to represent you and find the best overall coverage in terms of both price AND value. 

As always – the best insurance is an insurance broker.  Trust a broker, the broker with the blanket.

At Your Service.  

This blog is meant as a guide and we encourage you to contact a licenced insurance broker to receive advice on your specific circumstances.