$150/month for my 97 c5 in toronto, and i'm 25 with 1 minor conviction (ticket).
Now to answer the first issue, with proof of insurance and proof that you've already sent in the bill of sale. They would have covered you for anything that happened, it would be counted as an error and omission on their book of business.
Payment Issue
The issue of whether one should pay or not is a bit of a pickle, it's kind of a chicken and egg, on the one hand, yes any claims would have been covered, but like all consumers, I didn't have an accident so I didn't need to insurance during those few months so why should I have to pay now for a mistake the insurance company made? Well let's put it this way...you would have had to pay for that insurance for that time anyway had the mistake not happened, so what you're trying to do is find a way not to pay what you were supposed to in the first place. Now under normal business circumstances with insurance, if you haven't paid what happens? you get canceled! so if you don't pay those months then they'll just backdate the cancellation to the last time they received payment and you will have effectively been driving without insurance, which is a serious offence, one that can really limit your insurance options and double or triple your prices. (of course you COULD lie to the next insurance company and say you haven't been driving without insurance and they probably wouldn't know, but you'd still have a canceled for non-payment mark on your insurance records which all insurance companies can see; this is also a moral/ethical question which I will not suggest anyone do and will not go into further detail)
Insurance Rates
insurance rates go far beyond just who you are, how your driving/insurance history looks and where you live. There are very complex and always changing models or formulas if you can call it that to determine rates.
scenario 1
let's say 50% of all Honda Civics get into accidents but only 10% of Corvettes get into accidents. If I tell you that person A drives a Civic and person B drives a Vette with no other information, who would you guess is more likely to get into an accident? Now what if I tell you person A and person B are the same person, which car should be charged a higher rate? The civic.
Now you're probably saying "Hold on, Civic insurance isn't as expensive is corvette insurance!" Yes that may be true for some or even most people (I don't have the numbers) but that would be because the $ value of the damage is less, I mean a $20,000 car if written off brand new is still $20,000 compared to 60k, so say the Civic pays 900/year and the Vette pays 1000/year, that's about $1 of insurance for every $22 the Civic was worth brand new, versus the Vette which would be $1 for every $60 the car was worth brand new. So while the Vette insurance is more expensive, it's minimal compared to what a civic costs in terms of real dollars for the value of the vehicle.
scenario 2
As we know, a bigger, busier city will be more expensive that a smaller town or rural community (I'm going to assume you guys know this even if you don't). But even within a city or community, the rates may vary just due to the nature of the neighbourhood
Let's say suburb A in city X has 1 in 10 cars stolen and suburb B in city X has 1 in 100 cars stolen, where would you prefer to live knowing this? If you were to insure both cars as an insurance company, who would you charge more?
The same can be said for accident rates, hail damage claims, # of drunk drivers, fire, lightning, anything insurance related really!
Insurance Premiums
As previously stated there's a formula to insurance, insurance is not a big box store or a mom and pop shop there is no haggling, everything is structured and accountable in a formula or "business model" if you will for charging client based on various different variables. This is why it is always recommended to shop around for insurance because every company may have a slightly different formula, maybe one company has a good track record in Toronto but a bad experiences with clients from Ottawa but the opposite is true for another company, then it very well could be true that one company is cheaper for Toronto than Ottawa and vice versa.
In terms of insurance premiums, you are eligible for discounts and potential group rates and all that stuff, but there is no haggling, the price is set. If your broker or agent can find you some savings, they are either giving you a discount for something or changing your deductibles, your mileage (driving 5000km versus 25000km or commuting to work versus not commuting to work makes a difference) but for the exact same coverages you have now and assuming you are already credited with all the discounts you are eligible for with a company, if your renewal says $1000/year, they won't be able to say "You know what? I like you, you've been with us for 15 years, I'm going to give you a 10% discount and charge you 900/year" if they do, like I said, either a hidden discount or the broker will be paying out of pocket with their own commission for you.
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I'm really sorry about the long post guys, but I hope this sheds some light, if you guys have more questions feel free to ask me, I will try to answer them to the best of my ability.
For anyone that is curious or skeptical for any reason about my information, I am a registered insurance broker for both Ontario and Alberta and I'm currently studying for...I guess you can call it the "board exams" to become an actuary.
Cheers!