Owners Tips

How to Save Some Money on Car Insurance During COVID-19

COVID-19 has impacted people all over the globe and many Canadians may be experiencing financial uncertainty as a result. If you have been reviewing your expenditures looking for some savings, your vehicle insurance may be an area where you could save some money in the short term, but it’s important to ensure you’re still properly covered.

There are many variables that are considered when calculating automotive insurance policy premiums. Age, sex, years of driving experience, location of residence, parking provisions, and driving record all play a role, as does the vehicle and how far you drive it. Any changes to the above should warrant a call to your broker or insurance provider. Explaining your current situation will allow them to modify your policy accordingly.

Reduced Premiums During COVID-19

As governments at all levels have mandated physical distancing and have put restrictions on travel that’s not considered essential, many Canadians have been driving less or not at all. Some insurance providers have lowered monthly premiums for customers whose driving habits have changed by either offering small discounts for a reduction in kilometres travelled or larger cuts for drivers who wish to ground their cars entirely. These discounts will likely last for a few months but could be extended based on the duration of the pandemic.

Some providers have sent out emails to their customers with forms to apply for discounts due to COVID-19, while others require you call the company or your broker to see if you’re eligible. Even if this isn’t the case for your provider, changes could be made to your existing policy that could save you some money, so give them a call to see what discounts are available.

Less Traffic, Fewer Collisions

With travel restrictions in place and social distancing being enforced, the only people who are commuting are those who work in essential services or people accessing those essential services. While there are always exceptions, most Canadians seem to be heeding the advice of the government by staying home. Fewer vehicles on the road should statistically mean fewer collisions.

If you previously had a long commute but are no longer working or are working from home, you could see some savings by changing your vehicle’s purpose from “Commuting” to “Pleasure.” If this situation continues for months, small reductions could add up.

Mandatory Coverage vs Optional Coverage

If a vehicle is plated and being driven, it requires a mandatory level of insurance. If you have multiple vehicles in your household, you may consider modifying or removing coverage from ones that aren’t being driven. The solution to saving money is not as simple as merely pulling the insurance off a vehicle, as there are many other factors to consider.

Liability coverage protects you in case you are in a collision where you are held accountable for vehicle or property damage as well as injury or death. Accidental benefits will similarly cover costs of another party’s medical bills, physiotherapy, or loss of income from an accident where you are considered at fault.

If you drive an older vehicle that has a low cost of replacement, dropping collision coverage from your policy may be an option to save some money, but removing liability is not. If you go this route, if the vehicle is damaged, you must cover the costs.

If the vehicle will be parked on the street or in a driveway where it could be susceptible to damage or theft, collision should be left on the policy to cover potential repairs. If it is being stored in a secure garage then comprehensive coverage, which is frequently referred to as “Fire and Theft,” may be all you need and there could be savings here. If you do go this route, it's important that the car stays grounded and you don't drive it, even for a one-off trip or short distance.

It's also important to keep in mind that if you lease or finance your vehicle, you are contractually obligated to keep active insurance on the vehicle at all times. Read through your paperwork to ensure you aren’t breaching this contract and left out to dry if the vehicle gets damaged or goes missing.

Claim Deductibles

Depending on your threshold for risk, another possibility is the option of raising your claim deductible. This may seem counter-intuitive, but by taking on a higher theoretical risk while your vehicle is parked and unlikely to be involved in a collision, you will reduce your monthly premiums.

Last Resorts

Some insurance agencies offer what is called Usage-Based Insurance (UBI), which requires having monitoring device installed in your vehicle. Based on your driving behavior and mileage, you could save money. Or, conversely, you may not. 

Government relief initiatives and mortgage deferral plans may help temporarily ease some financial strain, but the future is still uncertain. If you’re at risk of defaulting on your insurance payments, contact your broker or insurance agent immediately to see if you can arrange an extended or deferred payment plan, as some are already offering.

Don’t Cancel Completely

Cancelling your insurance policy altogether may seem like an attractive proposition when money is tight, but you may want to think twice. Gaps in coverage raise red flags and aren’t looked upon too kindly by insurance providers. This will mean higher rates when you start shopping around again.

The mandatory level of insurance required for your vehicle varies by province and whether you own the vehicle or not. Don’t forget that the onus is on the individual to revise the changes made to a policy when things go back to normal, so make sure to contact your policy provider before you return to regular driving again.


The health and safety of our community is our top priority. autoTRADER.ca encourages all Canadians to practice social distancing in accordance with recommendations by Health Canada and avoid non-essential travel. It's up to all of us to help prevent the spread of COVID-19. If the purchase of a vehicle is essential to your situation, please contact your local dealership to discuss options relative to your region and ensure accordance with Health Canada guidelines. For more information on how COVID-19 might impact Canadian car owners, see our resource page here.