Understanding Auto Insurance Increases in Ontario

You may have recently received a renewal for your auto insurance and noticed a higher than usual increase in your premium. Like many Ontario drivers, you aren’t alone.

When it comes to auto insurance, some increases may be caused by factors within your control. These factors include at-fault collisions, traffic tickets or violations, and license suspensions.

However, other increases are caused by widespread trends and issues that are impacting car insurance customers across the country. While these insurance hikes may be unexpected, there are a few major industry trends that are contributing to these auto insurance increases.

One report outlined some of the main reasons:

Distracted Driving: Over the last five years, industry costs to repair vehicles damaged in collisions has increased by more than 25 percent. Uncoincidentally, this increase in distracted driving collisions coincides with the increase in cell phone use. In fact, crashes are 23 times more likely when the driver is texting on their smartphones while driving. Crashes are also four to five times more likely when the driver is speaking on their cell phone. While texting and driving may not seem like a serious offence to some drivers, it’s actually the most costly and most serious road safety issue that drivers face today. 

Catastrophes and Natural Disasters: Unbeknownst to most, weather and natural disasters have a significant impact on auto insurance increases. For example, the windstorms experienced in Southern Ontario and Quebec last May have since caused more than $622 million in insured losses. In turn, this forces insurance companies to increase rates to negate their losses.

Fraud: Fraud is one of the largest issues that the auto insurance industry faces. One study reported that last year, the overall cost of fraud in the auto insurance industry was between $769 million and $1.56 billion in Ontario. This number is expected to increase annually.

Increased Repair Costs: Car repairs are more costly than ever. Increased repair costs, in combination with the rising frequency and severity of claims, is one of the main factors contributing to rising premiums. In part, this is due to the high cost of integrating advanced technology into vehicles.

Although some increases are out of drivers’ control, there are a few things that you can do to keep your premiums down, such as:

• Combine multiple insurance policies. Many insurers offer a discount for doing so.
• Ensure that your deductibles and coverage suits your needs, and that you’re not overpaying for unnecessary features.
• Maintain a good driving history, as well as a good payment history.
• Consider making some changes to receive discounts. For example, purchasing winter tires. 

Perhaps the most important factor in lowering your car insurance premium is by using an insurance brokerage that designs your policy specifically to suit your unique needs. At Haas Insurance, we can do just that in minutes. Why pay more?