Auto Insurance Rates in Urban Cities

Valid automobile insurance is a legal requirement in Canada in order to operate a motorized vehicle on the road. Traffic accidents can be costly and dangerous and are the leading cause of death by injury in the world. In arriving at an insurance rate for an individual driver, many factors are considered. The rates can differ dramatically between drivers, depending on their circumstances. Unfortunately, for some drivers the existence of certain risk factors make it difficult to obtain affordable insurance.

Key Factors Affecting Auto Insurance Premiums

There are several factors that impact insurance rates, such as personal information, automobile information, use of the vehicle and geographic location, each of which are outlined briefly below. The key principle for insurance rates is that the higher the risk, the higher the insurance premium.

Driver Information

Personal information, such as your age, sex, any driver education courses taken and driving experience or record affects your insurance rate. Factors such as whether you are a new driver, have a history of traffic violations in the past three years and any accident collisions you may have had in the past six years impact your insurance rate the most. Drivers who have a poor driving record may not be able to obtain insurance from a regular insurance provider; they may have no alternative but to purchase insurance from a company that specializes in high risk insurance at high rates.

Automobile Information

Automobile information also affects your insurance rate, such as the automobile make, model and year. Sports cars, convertibles and luxury cars attract higher rates because of the likelihood that they will be driven at faster speeds and because they have higher value and thus cost more to repair or replace compared to other vehicles. New cars tend to have higher premiums if they have high replacement value, though factoring against this is that new cars have less chance of causing a break-down related accident. Certain makes and models also run a higher potential of being stolen and so their insurance rates are higher.

Automobile Use

Use of the vehicle affects your insurance rate as well. Primary vehicles used to commute to work are more regularly driven and, as a result, attract higher insurance rates. By comparison, secondary vehicles which are driven only occasionally tend to have lower insurance rates.

Geographic Location

Where you live can also impact your insurance rates. Urban city drivers face significantly higher premiums because of high population density, based on the simple probability of having an accident. Busy cities have busier roads for people to travel on and park at, which increases the likelihood of accidents, theft, and other incidents that may cause insurance claims. By contrast, a driver who lives in a less congested area is less likely to collide with others, thus reducing the probability of filing a claim. Because of differences in population density and possibly types of roads used, rates differ between metropolitan areas and suburbs. Rates also differ based on census data between metropolitan areas, between suburban areas and between various rural towns.

Population density has a greater impact than the risk of fatalities in determining insurance rates. Insurance rates are lower in rural areas, even though there is a higher incidence of fatal automobile accidents in rural areas from travelling more kilometers regularly at higher speed limits, on less safe roadways. While serious and costly, fatal accidents still make up a small portion and cost of total accident claims and so being located in a more densely populated area still has great weight in determining overall insurance rates.

Auto Insurance Rate Increases in Edmonton

In recent years, Albertans have faced increasing insurance rates, particularly hitting Edmonton drivers the most. According to numbers released by, Edmonton insurance rates are found to be about 14 percent higher than other cities/towns in Alberta, likely because of its greater population density comparable to other major metropolitan areas like Toronto, Detroit and New York City. Edmonton police also recently noted that vehicular theft has risen in the city to about a 40 percent increase over the last year, undoubtedly adding to the problem faced by drivers looking to insure their vehicles.

Keeping Your Auto Insurance Affordable

There are some ways to obtain lower auto insurance rates in Edmonton and other urban centres. Driving safe and maintaining a good driving record with as few traffic violations as possible is an impactful component of insurance you have control over. Using alternatives to commute to work, such as public transportation can lower your rate. Researching the potential insurance implications when selecting a vehicle also allows you to make an informed decision that can affect your rate. Lowering your coverage by increasing your deductibles also reduces your premium; the deductible is your share of the claim in the event of a loss.

Comparison shopping for the cheapest plans is the best way to ensure that you are not overpaying for insurance. Independent insurance brokers do the research for you and also explain the best options for you. Consulting with an insurance broker helps you adequately prepare and make appropriate choices about your insurance policy decisions. At HDF Insurance, we have access to many insurance plans and can provide you with expert insight to best suit your needs as a consumer. Our offices are located in Edmonton & Whitecourt. For a free auto insurance quote, contact us today.