How is snowmobile insurance different than auto insurance?

Getting insurance for your sled is not nearly as complicated as getting auto insurance. Insurance companies have simplified ratings that group sleds together based on the size of the engine, and they rate riders broadly as experienced or inexperienced, instead of crediting you for every year you ride. Tickets and accidents still count against you, but not quite the same way.

If you’ve had auto insurance for a long time, you’re probably quite familiar with what factors are used to determine your premium. In fact, we write a lot of stories about how your age, gender, postal code and driving history can and do affect your auto insurance rates. Well, if you’re just getting into snowmobiling and were wondering if the same factors apply, the answer is, not exactly.

Let’s take a look at how snowmobile insurance differs from auto insurance in terms of how premiums are determined.

The experience of shopping for snowmobile insurance will feel much like what you’ve experienced when calling for a car insurance quote. Your broker will ask for your full address, birthdate, maybe even marital status, and will definitely ask you for the year, make and model of the sled you want to insure. In fact, they’ll want the VIN, just like for your car. But some of these questions won’t be for the purpose of getting you an accurate quote. For example, they will ask for your address, but just so they know where to send your paperwork.

Here’s how it all breaks down:

The sled: Unlike auto insurance, where every year, make and model could potentially generate a different premium, your snowmobile insurer really just needs to know the purchase price of your sled and the cc.

The rider: For sled insurance, your exact age doesn’t affect pricing except that some companies won’t insure you if you’re under 25 and have a sled over 800cc, and some have an “underage surcharge”. Experience is grouped into “experienced” (4+ years) and “inexperienced” (less than 4 years). Being a novice rider could affect how much you pay because some insurers won’t accept inexperienced riders with tickets.

In terms of your past record, at-fault claims only affect your snowmobile rate if they are related to sledding. On the other hand, all tickets, license suspensions and past cancellations for non-payment can affect your premium, even if they are related to your car or motorcycle, not your sled.

Insurance companies always want to be as detailed as possible in setting their pricing. There are two reasons for this:

The problem is that pricing is based on past claims, and there just aren’t enough snowmobiles out there to provide statistically reliable claims data for all the possible sub-groups of sledders.

There are 9 million cars and trucks in Ontario, so there are enough claims in a given year, say, from 31-year-old drivers, to provide accurate pricing for that group. Given that there are only about 150,000 snowmobiles in the province, and most people don’t make claims, there may only be a dozen or so claims made by 31-year-old riders in a given year. That’s not nearly enough to accurately price that narrow sub-group, so insurers have to group more broadly. One price group for riders with less than 4 years’ experience (inexperienced riders), and another for everyone else (experienced riders).

There is one way that snowmobile insurance pricing is actually more complicated than auto insurance. And that’s when it comes to how your annual premium is broken down by month. Just like with motorcycle insurance, insurance companies know that you’re only likely to use your sled during certain months. So they charge you more during months when you’re more likely to ride, and less when you’re less likely to ride. If you keep your sled insured year-round, it doesn’t matter, and you can pay a regular monthly premium. But it can get tricky if you try to cancel your policy in the spring.

Here’s how it breaks down:

So, if you start your policy November 1^st, then try to cancel April 1^st, thinking you’ll get back seven months worth of premium, you’ll actually get back nothing, because your entire annual premium will already be used up. What’s worse, if you’re making monthly payments, you’ll only have made 5 monthly installments by then, and cancelling will force you to pay the other 7 installments all at once.

Whenever this happens, the instinct is to feel ripped off, but it’s just what happens when you choose to make regular monthly payments on something that you only use for 5 months. It’s just like buying a 5-month supply of eggs and paying for it over a year. After 5 months, you’ll still be paying for eggs, but you won’t be able to make an omelette. It’s best to keep your policy for the full year, and you won’t run into this problem.

Just like with your auto insurance, the best way to get a good rate on your sled is to keep your record clean. Unlike auto, the actual value of your sled also makes a big difference. Premiums can start at a couple hundred bucks a year if you have a clean record and a used sled. Beyond that, you can save an additional 20% if you bundle your sled insurance with your auto, home, condo or tenants policy. Call us for a quote today. We know when that hotline bling, that can only mean one thing…Somebody wants insurance.