Car Insurance In Ontario: The Rate Rise And What It Means For You
July 23, 2018
Do you drive a car? Listen up! The Financial Services Commission of Ontario (FSCO) recently approved premium rate increases for car insurance in Ontario for new and existing drivers.
You may be wondering why the rates increased for car insurance in Ontario and what it means for you. Here are the top five questions about the rate increase – answered!
1. Why did the premium rates rise for car insurance in Ontario?
Insurance companies proposed an increase in rates for car insurance in Ontario due to the recent rise in interest rates, claims costs, distracted driving, and other driving trends.
The FSCO, a governmental organization which regulates insurance companies, chose to ultimately approve the insurance companies’ proposals after a long review process.
2. What’s the biggest effect of the increase?
On average, rates for car insurance in Ontario are set to rise by 1.11%.
3. Will all policyholders receive the same increase in auto insurance payments?
While the 1.11% increase represents an average for car insurance in Ontario, there’s a large range of possible rate and payment increases.
For example, Aviva Insurance increased its policyholders’ premiums by an average of 2.97% in June 2018, while the Economical Mutual Insurance Company is set to increase its premium rates by an average of 8.15%, effective September 15th, 2018.
Many insurers, including those with large market shares, such as Allstate Insurance, Belair Insurance Company, and Certas Direct Insurance, aren’t planning to increase their premiums for car insurance in Ontario at all.
Some insurers are actually reducing their premium rates: CUMIS General Insurance, Northbridge General Insurance, and SGI Canada Insurance Services are decreasing their premium rates by an average of 0.33%.
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4. What are other factors that affect my rate for car insurance in Ontario?
This rise represents a general decision based on the discretion of insurance providers and the FSCO. But, there are many different factors that determine your individual insurance policy rate for car insurance in Ontario. Some of the primary factors include:
- The type of vehicle being insured
- The neighbourhood of the policyholder’s residence
- Driving experience of the policyholder
- At-fault accident(s) and driver conviction histories
- The reason for trips made by the vehicle
- Policyholder choices about coverages purchased and deductible/liability limits
You can read more about individual insurance rates here: “What Are The Factors That Determine My Auto Insurance Rate?” on The Well.
5. What should I do in response to this rate increase?
A rate increase may seem like bad news, but it’s important to remember that Ontario is still a very competitive marketplace. Insurance companies will still compete on policy prices to get the customer, which is a good thing for you!
The bottom line
It’s important to shop around for rates to make sure you’re getting the best deal on your car insurance following the rate increase.