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How are premiums calculated?

Your insurance premium depends on how likely it is that you'll have to make a claim and how much that claim will likely cost. And that depends on:
You, where you live, your driving record, your vehicle, how you use your vehicle, and the coverage and deductibles you choose
The company's experience insuring people and paying claims. The cost of all of the claims the company pays out affects the premiums of everyone it insures.
Your provincial government also has a say in how premiums are set. For instance, in Alberta the government sets the maximum price on insurance premiums for the coverage you have to have in what's called the "grid" system. For more information on how this system determines your rates, click here.
Where you live - If you're a city dweller, for example, accidents and vehicle theft are more likely, which may translate into higher premiums.
The kind of vehicle you drive - Newer, more expensive vehicles cost more to repair or replace, which usually pushes premiums up.
How you use your vehicle - More time on the road means there's a higher chance of an accident. That means higher premiums if you drive a lot or you drive long distances.
Your driving record - Your driving record has a big impact on the premiums you pay. Here are a few examples:
A long driving history with no accidents can help keep premiums down
Every accident where you're at-fault will push your premiums up
Convictions and speeding tickets may also increase your premiums, but parking tickets won't.

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