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Cars sit parked along Scarborough Road in Toronto on April 8, 2020.

Fred Lum/The Globe and Mail

Canadians looking to tighten their belts may want to look to their auto insurance for savings during the pandemic, experts say.

How you use your car affect the rates that insurance companies charge you, with those who drive less typically paying less, too.

Changing a vehicle’s designated use from “commute” to “pleasure” can make a difference beyond the shorter trip from the bedroom to the laptop.

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Matt Hands, director of insurance at rate comparison site Ratehub.ca, says Canadians should be talking to their insurance companies if they want to save a few bucks.

“If you’re no longer driving to work and you’re significantly decreasing your annual kilometres because you’re only using your vehicle for necessary trips like the grocery store, you should be reaching out to your insurance provider,” Hands says.

“You could see discounts up to 10 to 15 per cent on your premium, just by decreasing the amount of driving.”

Hands says if you’re driving less you may also want to consider the amount of coverage more generally.

Another way to reduce your insurance costs may be to increase the deductible you pay when you make a claim. A higher deductible generally means a lower insurance premium.

However, Hands says it is important to understand that if you do get in an accident and need to make a claim, that higher deductible means you pay more out of pocket.

“You’d want to make sure you are comfortable with that scenario before making any change to your deductible,” he says.

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Some insurers have begun making broad changes.

At the Co-operators, the insurer is offering eligible clients a minimum 10 per cent refund on their auto premiums in recognition that the physical distancing measures taken to slow the pandemic will reduce overall auto risk.

The insurer says refund percentages and payments will be finalized at the end of June.

“This will enable us to pass on additional savings to our clients once we better understand the impact on claims reductions from this fast-evolving situation,” says Lisa Guglietti, the insurer’s chief operating officer.

Co-operators, along with other insurance companies, is also offering to allow customers to defer payment and forgiveness of non-sufficient fund penalties.

“We recognize that Canadians are facing financial challenges now and are in need of immediate relief,” Guglietti says.

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In a scenario looked at by LowestRates.ca, a driver in downtown Toronto who was no longer commuting saved about 15 per cent, while one in downtown Montreal saved 36 per cent.

LowestRates.ca says in a another scenario, a business owner who has shut down temporarily and is now only driving their car for personal use could save 17 per cent in downtown Toronto and 43 per cent in Montreal compared with normal.

Another option, if you have more than one car, is that you might want to suspend your insurance coverage for one of your vehicles and leave it parked for the duration of the pandemic.

However, this might not be an option if you are still making payments on the vehicle or if you lease it.

Hands says you should check with your lender or the company you are leasing the vehicle from so you know what your obligations are regarding insurance coverage. And, he says, if you do put your coverage on hold you must not drive the uninsured car.

Whatever you do, Hands says, it is important that you talk to your insurance company and understand your options.

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“It’s not a one-size fits all for everyone,” he says. “It is really up to you to discuss your options with your provider to find out what works best for your situation.”

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