The iShares ETF holds Canadian companies with strong social and environmental records. Masui should gradually increase the proportion in the bond ETF until it reaches 100% in eight years.

But beware: mineral and natural resource rights aren’t always on the same deed as property rights, as John Newlie, an Ontario mining prospector, found out. In 2007, Newlie bought a 77-acre lot near Englehart, Ont. “We thought the land purchase included all surface, timber and mineral rights because it was classified as a mining claim,” says Newlie (we’ve changed his name to protect his privacy). But the ink hadn’t even dried on the purchase agreement before Newlie’s lawyer uncovered a disturbing fact: the original owners had lost the mineral rights for the property decades ago, due to unpaid taxes. “Make sure you or your lawyer does a thorough search on the chain of ownership of any mineral rights,” says Newlie. “As these rights can change hands numerous times.”

Newlie found out the hard way that property and mineral rights are contained in two separate deeds in almost every province. Thankfully, mineral and natural resource transactions are a matter of public record: you just need to know which government office to go to for that information. A lawyer well-versed in this type of purchase is an invaluable resource.

You’ll also want to understand what’s included in the mineral rights. That’s because the definition of a “mineral” can vary from jurisdiction to jurisdiction—it can also vary from one mining situation to another. Finally, to profit from land purchased for its natural resources, you’ll want to consider not just the purchase price, but also the specific terms for these rights. The terms will include the specific types of minerals you intend to extract, how you’ll access the property, what steps you’ll take to prevent damage to the land and the surrounding environment, as well as the use, protection, and remediation of other natural resources, such as fresh water lakes.

One way to mitigate your costs is to rent out your land to farmers. “Farmland is like gold in that it hedges against inflation,” explains one investor. “It holds its value well during a financial crisis and instead of paying to store it, you can receive rent to offset holding costs, and even earn a profit.”

Still, not all farmland is considered desirable. Jim Herder, a farmer near Sylvan Lake, Alta., buys and rents arable land for his farm production. Given a choice, Herder would prefer to rent, so he can avoid taking on more debt. But he has specific criteria: “Any land I rent has to be profitable … so land that’s close to me has more value.”

To determine how much to charge in rent you’ll need to do a bit of digging. Find out what nearby parcels are renting for, and what the lease terms include. Then decide if you want to rent out your land based on a fixed per acre price, or based on a “whole-farm” rental rate. Normally the price paid for whole farm rentals is lower than a per acre charge. You could also charge a fee based on the farmer’s average yield, a percentage based on the gross crop revenue, or a fee per acre based on the expected rate of return of the land. These calculations can get complex, so it would be best to seek out a realtor or accountant who knows the area well and is knowledgeable on the business of farming.

So you can’t blame Anne for being caught off-guard when a housing developer came knocking 15 years ago offering her an astounding $600,000 for 40 acres of her land. Almost as suddenly as he appeared, the deal fell through. But Anne realized that her land wasn’t good for nothing after all: Barrie had become one of Canada’s fastest-growing cities and it was only a matter of time before the developers came knocking again. The only barrier? That her land wasn’t zoned for housing development.

Today, in her mid-50s, Anne has almost completed the long, complicated task of rezoning and selling off 40 acres of her land. She didn’t expect that it would take more than a decade to accomplish, but she has no regrets. After all, she’s right on the verge of every land investor’s dream payoff. When she completes the sale in a couple of years she expects to clear more than $3 million before costs.

For many people, land is the ultimate investment. As the saying goes, they’re not making any more of it. Even before the last spike was driven home in Canada’s transcontinental railroad in 1885, savvy speculators were trying to hit paydirt by purchasing cheap land with lots of potential, then selling it for a tidy profit when demand grew.

But investing in land isn’t always a walk in the park. As anyone who’s been tempted by swampland in Florida can tell you, for every legitimate potential investment, there are dozens of unwise gambles and outright scams. The key to making money is to know exactly what to look for when you’re choosing your investment, as well as the steps you need to take to turn a worthless piece of land into a gold mine (sometimes literally).

If you’ve ever wondered about whether you too could make money investing in land, read on. We’ll tell you about five key strategies for making it work: flipping land, developing it yourself, buying an infill property, renting it out, and exploiting its natural resources. Just as importantly, we’ll tell you everything you need to know to avoid getting suckered into a bad deal.

Read Paydirt: Make money while you wait

A plot gone wrong

In the late 1980s Toronto was in the midst of a housing boom and three local businessmen figured they had a surefire scheme to make millions. The trio of investors paid $2.2 million for a plot of land at 31A and 33 Parliament St., on the east side of the city’s downtown core. The property market was white-hot and their intention was to cash in by immediately flipping the land to a housing developer, who would then go through the process of rezoning the property from industrial to residential development.

But what Michael Kilbride, Norman Rothberg and Hollace Wong didn’t realize was that their plot was badly contaminated. An auto wrecker had once operated on the property and empty oil drums and other hazardous waste were still scattered about. Quickly, the syndicate of investors learned that the environmental hazards contained in their property made it virtually unsellable. Worse, as they considered their options, the local real estate market peaked and by 1992 it was in free fall. By that point, they couldn’t even give the land away. They spent the next eight years and tens of thousands of dollars in a legal battle. In the end each walked away with a massive loss.

The maneuver Kilbride, Rothberg and Wong attempted was the classic land flip. You buy up a piece of raw, undeveloped or under-developed land, then flip it fairly quickly to a developer for profit. But while it sounds simple, land flipping is fraught with risks and complications.

It’s all in the zoning

As Anne Schmidt found out, the key to flipping land is to buy cheap land that’s not zoned for development, and then get it rezoned yourself. Just changing the zoning can have a massive impact on the land’s value. For example, a few kilometres south of Barrie, a 100-acre cash crop farm, complete with a 3,400-sq-ft Victorian home, is currently selling for $1.7 million, or $17,000 per acre. But 15 minutes to the north, you’ll pay a whopping $433,000 per acre for a six-acre parcel of raw land—or $2.6 million for the lot. The reason for the steep jump in price? The second property is already zoned for residential use.

The hard part is predicting whether you’ll be allowed to rezone your land or not. That’s because provincial governments, which dictate land use, only commit to five-year development plans, and even then, those plans can suddenly change, sometimes dramatically. Take, for example, the Oak Ridges Moraine, a belt of rolling hills stretching between the Niagara Escarpment and Rice Lake in southern Ontario.

In the late 1980s, this land looked like a can’t-lose investment. Toronto, Mississauga, Oakville and other Golden Horseshoe cities were expanding rapidly northward towards the area, and it didn’t take a genius to see that soon that land would be worth billions. But in 1989 various groups petitioned to protect it. Twelve years later, in 2001, the Ontario government agreed. Some landowners benefited as the value of their land abutting the greenbelt went up in value, but many others lost out: their land was now protected by a conservation act and could never be developed.

To maximize the possibility of turning agricultural land into pricier commercial or residentially zoned land, you need to consider five major factors:

Proximity to urban infrastructure. The closer the land is to existing sewer, hydro and other services, the better the chance of future development. “Provincial and municipal authorities won’t allow development in the middle of nowhere,” explains Paul Rabinovitch, partner with HGR, Graham Partners in Barrie, and a certified specialist in real estate law. “Service and infrastructure are required in order to support any new development.”

Road access and allowances. Easily accessible land, or land close to major transportation routes, commands more interest and a higher price, since the commuter infrastructure is already in place.

Your timeline. Because it’s getting tougher and tougher to find land that has not already increased in value, you may have to prospect further and further away from major municipalities. This will also require a much longer holding time, and will probably mean a longer selling window.

Environmental issues. In addition to making sure that the land you’re interested in isn’t protected from development (or likely to be protected in the future) you need to gauge the possibility of contamination. “Only developers with deep pockets will get mixed up in contaminated land,” says Rabinovitch. To protect yourself, pay extra for a comprehensive title search to find out what developments were in the area over the last 50 years. As those three unlucky Toronto investors found out, “if there a was a gas station or auto-mechanic shop you should pretty much assume contamination.”

See it for yourself

Once you’ve found a good prospect, it’s time to conduct a visual inspection. With the advent of satellite imaging technology, such as that used by Google Maps, you may consider skipping this step, especially for remote land or foreign investments. “Don’t,” says software developer and land investor Robert Devenyi, 34. “Never buy a property sight unseen unless you have a very solid reason.”

Jeff Oberman, owner of OntarioTaxSales.org, a privately-owned corporation that facilitates tax sales, agrees with Devenyi. He says Google and other geo-mapping systems often average out house numbers or property coordinates, so their maps can be inaccurate. “We’ve seen maps that are three years out of date and we’ve seen maps where the wrong piece of property is shown.”

Assess the potential profits

Once you’ve identified potential land opportunities, you’ll need to assess what the land is worth now, and what it could be worth in the future. This calculation is always part math and part guesswork.

When Devenyi assesses the potential worth of an investment, he considers the current value, the annual property taxes and the future intent or use of each parcel of land. “The tax-assessed value gives me the cost to carry the land each year. All I need to do is multiply this value by the length of time I expect to hold the plot.” Then he’ll use publicly available real estate listings to compare his land to similar properties—this gives him an idea of what he could earn on the future sale of the land. Once he has these two numbers he’ll “discount” the asking price for the property. “If my numbers are positive, I’ll proceed with a bid or purchase. If the number is negative, I’ll keep reducing my purchase price until the numbers make sense.”

For land owners like Anne, the process was slightly different. She already owned the land and needed the zoning changed in order to make the sale of the land profitable. Don’t underestimate the amount of time and effort that’s involved: rezoning from agricultural to residential requires a significant amount of paperwork, including professional assessments, surveys and subdivision architectural plans. It can take many years. “Rezoning land for a subdivision can be very lucrative, but it’s also much more expensive and time consuming,” says Rabinovitch. “Municipalities require professional assessments and sign-off and that takes time and money—so much time and money that you could lose your shirt.”

Read Paydirt: A literal gold mine

Divide and conquer

One strategy that works well in urban areas is to buy a larger piece of land that currently has a single building and then go through the process of severing and rebuilding multiple dwellings on the land. Called “infill housing” by developers, this type of investment is common in cities where the infrastructure and amenities are already in place.

For example, a small 1,500-sq-ft bungalow in Toronto’s working-class West end recently sold for just under $360,000. The buyer went through the process of having the property severed, then tore down the bungalow and built two semi-detached homes, which he then sold. A few months later he walked away with a $160,000 in profit.

“Land severances are a much simpler process than speculating on future development,” says Rabinovitch, “but it still requires a lot of due diligence.”

Before you put in an offer to buy a property, call the municipality building department to see if severances are allowed in that particular residential area. While you’ll almost never get a firm “yes,” you could get a firm “no,” and you can find out what requirements you need to meet if you get a “maybe,” says Rabinovitch.

At this point, you can put in an offer on the property, but make sure to include a condition that will allow to you dig a bit deeper into the zoning and permit requirements before the sale is finalized. “This extra due diligence could cost you a few hundred dollars, but it could also save you a few hundred thousand dollars.”

You should also consider getting pre-approval on your financing. “Keep in mind that as soon as you demolish an existing building you demolish the security collateral for a typical mortgage,” explains Tammie McMullen, a Calgary-based mortgage specialist with ATB Financial. For that reason, most infill developers will seek out a land-value mortgage. “We can provide financing for up to 75% of the land value, but it does depend on where that land is located,” McMullen says.

While there are some significant benefits to infill development—information on zoning and permits is readily available—there are also pitfalls to consider.

First, you’ll be competing with other developers to cash in on the same opportunity. “The price of the land reflects the fact that there’s not a lot of uncertainty in this type of development,” says Rabinovitch. You’ll also need to factor in the price of development. Construction costs will range, but a good ballpark is $150 per square foot—so a 2,000-sq-ft home will cost you $300,000 to build. Plus you’ll need to obtain professional drawings, which cost between 10% to 20% of your total construction costs, and pay for municipal permits.

Develop it yourself

Like infill development, this strategy will see you adding to the value of raw land by building on it and then selling. Real estate investor Sean Ellis recently used this strategy with great success when he paid $80,000 for two acres of raw land near the North Halton Golf and Country Club, in the township of Halton Hills, Ont. There were no buildings on the property, but Ellis (we’ve changed his name to protect his privacy) knew that homes in the area usually sell for at least $800,000, with some of the larger new-builds fetching more than $1.2 million. Even after paying permit, construction and carrying costs—to the tune of approximately $550,000—Ellis easily made a profit of more than half a million dollars.

When considering this type of purchase, land investor Devenyi uses a rule of thumb: the further away from a major metropolis, the smaller the initial capital investment and the longer the timeline for growth. Of course, the opposite is true: the closer you buy property to a major urban centre, the more costly the land, the faster you can turn the property around for a profit. For Devenyi, closer properties require a five- to 10-year investment, while properties further away can take 20 years or more to achieve maximum value.

The key is finding property that’s undervalued because it’s underdeveloped. Realtors can be helpful: they know what’s formally and informally for sale, they can give you comparables for the area, and they can provide insight into potential obstacles, such as access issues.

Another popular resource for finding investment opportunities is the tax sale, a public auction that’s held on behalf of a municipality to collect property tax that’s gone into arrears. Since the current owners haven’t paid their taxes, the city will sell off their land, in “as-is” condition, to the highest bidder. While spectacular deals are possible—Sean Ellis’s Halton Hills purchase was a tax sale—there’s also a lot of risk involved with this type of investment.

“Tax sales are a bit like playing the lottery,” says Rabinovitch. “Most are dogs: back lots, or lots with complicated access issues, or land that’s so far north it will take decades to appreciate in value.”

Before making a bid, be sure to inspect the property to determine if there is year-round access by road. This is vital if you plan on financing the purchase, as most lenders won’t touch property that has only seasonal access. “If the land or cottage doesn’t have year-round access we simply cannot finance the purchase, because the risk of not being able to resell can be quite high,” says mortgage specialist McMullen.

If there is year-round access then you’ll want to consider one of two mortgage options: a “completion mortgage” means your builder covers the entire cost until the build is complete and you get funding at the end of the project. The more common option is a “draw mortgage” which provides your builder with financing throughout the build. Keep in mind that both mortgages are only amortized over a 25-year period and that you’re limited to a variable rate. “Borrowers with great credit will typically pay prime plus 1.25%. Those with low credit scores will start at prime plus 2%,” says McMullen.

Once your financing is secure, you’ll want to fork out between $100 and $300 for a basic title search (sometimes known as a sub-search). This will show you who owns the land, when it was bought, any liens or attachments registered against the property (such as mortgages), and any easements placed upon the property.

“You really only need to worry about federal liens,” explains Oberman. While all other debts are eventually wiped out once a tax sale is processed, federal liens remain on title until paid off, or the provincial government negotiates a settlement with the feds.

Still, the benefits of developing land for investment purposes are simple and straightforward: the cost to purchase raw land is significantly lower than purchasing property. And even if you sit on the land, untouched for years, your holding costs are relatively small.

Whichever strategy you decide to pursue—be it snapping up farmland with potential, investing in urban infills, or developing underused land yourself—keep in mind that while it can pay off handsomely, it’s not usually a get-rich-quick scheme. Just ask Ann Schmidt. She began the process of rezoning her farmland property for development more than 10 years ago, and she’s still a few years away from seeing that investment pay off. “It’s a tedious, tough process that can make or break you,” she says. Worth it though. When she finalizes the deal, she’ll clear more than $1 million in profit after covering her costs. Looks like she’s going to get her dream home after all.

Doucet, now 36, spent five days in a Majorca hospital before being transported by ambulance to Majorca’s airport and flown to Gatwick Airport in London, England. From there he was transported by ambulance to Heathrow airport and then flown home first class to Brantford, Ont. His insurer, RBC, hired a Canadian nurse to accompany him. The total bill: $22,727.50.

Fortunately, Doucet had spent $63 on travel insurance to cover him for the 11 days he was away. “Best purchase I ever made,” he says. “Quite apart from what it would have cost me if I had to pay for it myself, I don’t know how I would have handled the logistics of getting myself home.”

Indeed, when it comes to preparing for holidays, travel health insurance should be at the top of your list. Provincial health insurance plans offer sparse coverage for travellers outside of Canada and that can mean big trouble if you need hospital care. “It’s really not wise to travel outside of Canada without insurance,” says Milan Korcok, a long-time medical writer and Florida-based editor of Travel Insurance News (travelinsurancefile.com). Even if you’re just popping across the border to do some shopping, he points out, you need to be protected. “Health care is more expensive in the U.S. than pretty much anywhere in the world.”

Fortunately, protecting yourself from medical mishaps on the road doesn’t have to cost a fortune. Herewith our tips on how to keep costs down:

Avoid doubling up on coverage

“We don’t bother with travel medical insurance because we’re both covered through work,” says 35-year-old Alysia Isidros of Mississauga, who co-authors the blog Beachjunkies.blogspot.com with her husband Mike Solon, 33. Similarly, premium credit cards frequently include travel medical insurance and trip cancellation insurance. The caveat: study the policy closely to make sure you know what you’re getting, advises Korcok. Insurers often limit how much they’ll pay out for claims and restrict coverage to shorter trips.

Don’t buy from your travel provider

Most travel agents flog travel insurance, but you can often get it cheaper elsewhere. Consider that an all-inclusive travel insurance package for a 52-year-old on a $1,500 one-week trip to Aruba rang in at $145.80 per passenger through a package tour operator, including up to $5 million in medical coverage. By contrast, online insurance provider travelguard.ca offered an all-inclusive package for $92.88, including $10 million in emergency medical coverage.

I learned the hard way that if you don’t know what you’re covered for, your home insurance won’t do you much good. Read on, and I’ll fill you in, so you won’t flush good money down the drain like we did.

What kind should you get?

Home insurance generally comes in three different flavours: basic, broad (also called “standard”), and comprehensive. Basic is cheap, but doesn’t protect your home’s contents, so it’s not typically used by homeowners. Broad only covers you from “named perils” that are specified in the policy, and nothing else. Comprehensive, or “all perils” insurance works the opposite way: It covers you for all conceivable calamities except a list of excluded items—typically earthquakes and floods—along with natural wear and tear, mechanical breakdown, settling, and deterioration. This is the kind most homeowners get, and it’s the kind that Fred de Francesco, an insurance agent with Hugh Wood Canada, strongly recommends.

If you get comprehensive insurance, be sure to run a comb through the exclusion list before you sign: “One company may exclude water damage, while another company includes it,” says de Francesco. Similarly, “some policies may restrict coverage during home renovations, while others have no such clause,” he says. Work from your home? Make sure your policy allows for this scenario. Otherwise, your insurer could decline to cover you when you make a claim.

You can pay extra to add “riders” to your policy to cover items on the exclusion list, and if you live in an earthquake-prone region in B.C., says Lindsay Olson, a vice-president at the Insurance Bureau of Canada, there’s a case to be made for purchasing earthquake insurance separately.

Of concern to a broader range of Canadians, sewer backup “has become a big peril for today’s homes,” says Generations Insurance agent Vicki van Santen. If your base policy doesn’t include it, it’s the one extra you should probably always add.

How much coverage do you need?

Don’t confuse the value of your policy with the market value of your home, which includes the land your home is sitting on. Your policy only needs to provide you with the funds to rebuild your home or repair its structure if it gets damaged.

These days most insurance companies assess the cost of rebuilding your home for you, so you don’t have to worry about how much coverage to get. So-called “guaranteed replacement cost” policies cover the cost of rebuilding your home when it gets damaged, no matter what the amount—even if the insurance company underestimated how expensive it would be. Remember, though, that when you renovate, you have to let your insurance company know, says Olson, as that will affect the replacement cost.

A better deal

When you’re buying home insurance, you’re almost always better off using an independent broker who deals with a number of insurance companies, so he or she can get you the best price possible.

To keep your premiums as low as possible, consider bundling your home and auto insurance policies together. “Using the same insurance company for both could shave up to 15% off your total bill,” says personal finance guru and author Gail Vaz-Oxlade. Other measures that could give you a break on premiums: a monitored burglar or fire alarm, a sprinkler system, and—believe it or not—quitting smoking. “Many fires are caused by careless smokers, and insurance companies recognize that non-smokers have a lower risk of fire loss,” says Olson.

Don’t forget what’s inside

Most comprehensive home insurance policies include contents insurance, which covers the cost of replacing your belongings, up to a set amount. But Margot Bai, a former insurance agent and author of the book Spend Smarter, Save Bigger, says this is one area where you could save money by taking the “named peril” route and only insuring big ticket items.

“If you make a claim every time the dog chews on your dining room leg or you drop wine on your laptop, the company could decide not to renew you,” she says. “You get contents insurance to cover the big stuff.”

It’s not as far fetched as it sounds. Toronto’s Mark Skaff recently enlisted his 2003 Mazda Protégé Sport to vouch for him when he joined a trial Pay-How-You-Drive (PHYD) insurance program. He agreed to let his insurance company monitor how he drives using a small electronic recording device in his car, and in return his provider offered him the opportunity to lower his insurance premiums.

Skaff only uses his car to haul groceries and run errands. For the past two years, he shared the tracker data with his insurer every six months. “I knew I would save something,” he says, but the outcome still surprised him.

Such Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD) programs are slowly gaining popularity in the U.S., but they’re not widely available here—yet. Both rely on telematics, or remote information exchange, using trackers and a car’s on-board diagnostic system to create a clearer picture of your driving habits. The system lets your insurance company monitor how often you drive, when you drive, and whether you make a habit of screeching to a stop or roaring down the street.

The program Skaff enlisted in—the only one in Canada so far—is currently on hiatus. But once Canadian insurance companies fully commit to such programs, they would make great sense for value-conscious consumers, says Dave Huber, an insurance telematics expert, and president of Kairos Solutions. Both systems are user friendly: drivers can plug the trackers into their on-board diagnostic (OBD) port themselves. And sharing the information is equally easy. Skaff uploaded his data into his home computer, and newer systems do it wirelessly.

Depending on the policy, a PAYD or PHYD program “could save 20% to 40% if the telematics confirms that you don’t travel at night and you are a cautious driver,” says Clem Driscoll, a telematics expert and managing partner at C.J. Driscoll & Associates in Los Angeles. And a few wrong moves won’t cost you. “Companies who offer this are saying, ‘we will not raise your rates based on the info we gather.’ Even if you’re not the safest driver, it won’t hurt you,” he says.

Some worry about the Big Brother aspect of tracking, and it’s a valid concern. Although the programs don’t record where you go, they do record a lot of personal driving information, and participants should ask their insurance company exactly how that data will be used, and who it will be shared with.

As the programs gain ground here, more drivers will soon face the choice Skaff made—but he says he would do it again in a heartbeat. After all, his $1,500 annual insurance bill quickly shrank to $1,200, netting him $300 a year in savings. “Someone with driving habits that are more risky might not be comfortable sharing their information,” says Skaff. “But that’s exactly how low-risk drivers, like me, are able to save money.”

Building your policy

Think of your auto insurance policy as a mix-and-match wardrobe. Aside from a few de rigueur colours like basic black, the build is up to you. Below are the main components you have to choose from:

Third-party liability insurance. This insurance is mandatory, and is considered “your first line of defence if anyone decides to sue you,” says Fairview Insurance Brokers principal Fred de Francesco. You have some say over the amount of coverage you get, but he cautions against skimping in this area. “What happens if you run into a streetcar or bus? Bumping up your coverage from $200,000 to $1 million only hikes up your premiums by about $100, so it’s well worth the cost,” he says.

Accident benefits: Also mandatory, this component covers your medical expenses—everything from ambulance services to chiropractic treatment—if you’re involved in an accident, whether you’re at fault or not. A tip from Allstate Canada’s Saskia Matheson: “Your employee benefits may overlap with this coverage, so find out about your medical and disability coverage. If you have enough, you don’t need to buy extra coverage on your car insurance.”

Collision and Comprehensive: Collision insurance covers damage to your vehicle resulting from an impact with another vehicle or object—including the classic hit-and-run in the grocery-store parking lot. Comprehensive coverage takes care of such nasties as theft and vandalism.

While both collision and comprehensive insurance are optional, Margot Bai, a former insurance agent and author of the book Spend Smarter, Save Bigger, advises against waiving collision and comprehensive coverage, “unless your car is so old that the increase in premiums you’d face when making a claim exceeds the value of the vehicle.” Think $5,000 or less.

In combination, collision and comprehensive will set you back by a few hundred dollars. You would think that the premiums would go down as your car ages, but Toronto consumer advocate and auto insurance expert Lee Romanov says it doesn’t always work out that way. “If your insurer has had problems with your type of vehicle, the rates could go in any direction,” she says.

Waiver of depreciation: This option entitles you to receive the list-price value of your car if it gets totalled or stolen within the first 24 months. Otherwise, “you would have to pay back the difference between the list price and the depreciated cost,” says Nancy Hamilton, a manager at Hugh Wood Canada.

Rental car coverage: If you frequently rent cars, consider this extra coverage, “which only costs $25 to $50 per year and may be more affordable than paying for insurance every time you rent a car,” says Matheson.

If you want to lower your premiums, consider raising the “deductible” on your collision and comprehensive insurance. This is the amount that you have to pay if you make a claim. Personal finance guru and media personality Gail Vaz-Oxlade recommends “raising your deductible from the standard $250 to $500, which could save up to 20% on your premium. Go for a $1,000 deductible and you could save 30% or more.”

Shop ’til you drop

Every insurance company has a different way of assessing risk, says Marlene Landry, manager of consumer and industry relations for the Atlantic region of the Insurance Bureau of Canada. “Some companies will hike up your rate after one accident, others won’t change your rate until you’ve had two.”

That’s why you should consider enlisting an independent insurance broker to shop for you, rather than going directly to one provider. “A single broker may have contracts with five or six insurance companies, and you need to talk to several,” Landry notes.

A further stone to turn: the group insurance packages offered by many professional associations and university alumni societies. “If your association consists of accountants who drive Volvos to work, they might be able to offer you a lower rate than you’d get from an individual policy,” says Automobile Protection Association president George Iny.

The claim game

Say you run into the car ahead of you at an intersection, crunching its rear bumper. Should you involve your insurance company? In fact, “the law requires you to do so,” says Michael Turk, legal counsel for the APA. Otherwise, “you run the risk of voiding your policy.” Turk acknowledges that many people skirt around this bit of law and pay for minor collision damage out-of-pocket (assuming the other party agrees). After all, why make an $800 claim if your premiums will go up by $500 a year for the next six years?

Here’s one reason: “The person you rear-ended could make a personal injury claim against you down the road—perhaps because of chronic back pain they incurred after the collision,” says Turk. If you didn’t go through the insurance company at the time of the accident, “you now have a huge problem. The company could decline to cover you.” You’re on safer ground if you write your neighbour a cheque after rear-ending her parked car, “though it’s still a breach of policy,” says Turk. “Consider yourself warned.”