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Obtaining A CLEAR Perspective On Your Car Insurance Rates

Obtaining A CLEAR Perspective On Your Car Insurance Rates

By Kade Philips

Not long ago, an exceptional rating system was created to measure vehicles in accordance with the probability they would be involved in claims. Additionally, it took into account the expense of attending to those insurance claims. This technique currently is used by car insurance companies throughout all provinces. It's called the Canadian Loss Experience Automobile Rating, or CLEAR, system. It can have a substantial influence on your premiums.

Despite the fact quite a few motorists aware the CLEAR system applies to their car insurance premiums, few understand how it works. We will clarify this issue below. Before we do, however, it's worth taking a close look at the factors why CLEAR was designed in the first place.

Limitations Of The Pre-CLEAR Days

In the past, auto insurers had less vehicle-related data upon which to work out their policyholders' premiums. Lacking better tools, many insurance carriers chose to use the MSRP's of car companies.

Among the issues with this approach was that vehicles were grouped by their MSRPs, even though repair costs varied - in some cases, dramatically - within the group. Another issue was that a lot of the precautionary features that reduced the probability of a car accident added to the cost of the vehicle. Drivers were essentially penalized for buying into these features. By far the most glaring problem, however, was that a vehicle's MSRP is actually a poor tool for forecasting the chances of an accident or claim.

These and other issues are addressed in the CLEAR system. Auto insurance underwriters are able to more precisely predict which motor vehicles will probably bring about insurance claims. In the mean time, consumers are rewarded for getting safer vehicles.

The Way The CLEAR System Is Effective

CLEAR scores are assigned for various categories to all vehicles, with distinctions made for the year a vehicle was built. That is, a 2005 Cadillac CTS will probably have a different CLEAR score than a 2010. Different types for which CLEAR scores are made include collision, comprehensive, and accident benefits.

Auto underwriters contribute claims-related data to the CLEAR system. In line with the data submitted, vehicles receive ratings that reflect past claims involving collisions, fatalities, damage, and theft. Insurance companies may use these ratings as a practical gauge of a vehicle's risk of involvement in future claims.

Previously, we noted that vehicular safety features used to increase premiums because they increased the vehicle cost. While using the CLEAR system, they have the contrary effect. As an example, an engine immobiolizer reduces the odds your automobile will be thieved, and for that reason your car will be given a more favorable rating. In the same way, ABS brakes prevent crashes, and air bags assist in preventing injuries. As a result, both may lessen your rates.

A CLEAR Score Is Among The Many Factors

It's important to point out that driving a car which has earned a favorable CLEAR score does not always mean your rates will be low. There are lots of additional factors underwriters take into account when determining your quotes. Your driving record is among the most influential.

Should you have multiple at-fault collisions and traffic violations on your record, your premiums will reflect them even though you drive a "safe" vehicle. In contrast, if your driving history is spotless, and you own a luxury SUV, your insurance rates will be more expensive than if you were to drive a Toyota Corolla.

Your auto insurance monthly payments may also be affected by your age, gender, location, how far you travel annually, and the type and value of coverage on your insurance plan. While CLEAR scores are a main factor, there are lots of others to note.

Where To Find Low-Priced Auto insurance

In the dialogue preceding, the kind of automobile you drive undoubtedly has a visible impact on your premiums. So, too, do your driving record, coverage levels, along with other variables. Just about the most important things you can do when looking for affordable coverage is to comparison shop between multiple auto insurance companies. The gap in quotes from one insurer to another can be extraordinary. Unless you compare them next to each other, you may wind up having to pay significantly more than appropriate for the insurance policy coverage you need.

It takes time to perform this, but a few minutes spent researching in advance can actually save a large amount over the long term.