Rising Auto Insurance Premiums: What You Need to Know
Auto insurance rate increases are happening throughout Ontario, and your driver profile—which includes your location, age, and driving history—significantly influences your premium. However, other factors can also rev up car insurance costs. Some of these factors, like rising car repair costs and disaster-related claims, are beyond your control.
Wondering what actions you can take as a consumer? In our latest blog post, we demystify the reasons behind the rise in auto insurance premiums and explore steps you can take to manage these costs.
Why Auto Insurance Premiums are Increasing
Location: Where you reside—rural or urban—affects your insurance costs. Higher repair expenses and greater risks of theft and vandalism in certain areas can increase your premiums.
Claims: After an accident, a claims adjuster either arranges for repairs or declares your vehicle a total loss, offering a cash settlement. However, the shortage of autobody repair workers has led to higher wages, and the lack of replacement parts has driven up costs and repair times. This situation also increases the need for long-term rental vehicles, as cars take longer to fix or replace.
Inflation: Although inflation is slowing, it still impacts your auto insurance premium. Insurers must adjust their rates to keep up with rising costs, as repairing or replacing a car is much more expensive now than in previous years.
Busier Roads: The frequency of driving affects premiums. More vehicles on the road lead to more collisions and higher claims costs. Since pandemic restrictions have lifted, there are more drivers on the roads as people return to their offices.
Auto Theft: Insurance companies consider the theft rates of your car’s make and model when setting premiums. According to the Insurance Bureau of Canada (IBC) and the Government of Ontario, car theft is rising, with a vehicle being stolen every 48 minutes. This trend costs Canadians over $1.5 billion annually and contributes to higher physical damage claims.
Technology: While advancements in automobile technology have made driving more convenient, they have also increased repair costs. Modern cars often have rearview cameras and sensors, which means repairs can involve both the bumper and its technology. Additionally, smart keys have made vehicles easier to steal.
Fraud: Fraudulent claims, such as staged accidents, continue to rise, leading to an increase in auto insurance claims.
Distracted Driving: Distracted driving has become the leading cause of automobile accidents and fatalities, contributing to higher auto insurance claims.
Tips to Manage Your Auto Insurance Costs
Review your coverage with us: Discuss your insurance needs with your broker to determine the appropriate type and amount of coverage. For newer cars, comprehensive coverage might be necessary, while older cars may only need liability coverage.
Increase your deductible: Opting for a higher deductible typically can lower your premiums.
Inquire about discounts: Many insurers offer discounts for using telematic devices or installing winter tires.
Bundle policies: Bundling your car and home insurance policies can lead to savings.
Maintain a good driving record: Avoiding speeding tickets, accidents, and other traffic violations can help keep your premiums down.
Compare vehicle premiums before buying: The make, model, and year of a car can affect insurance rates.
Shop around for auto rates: We can help you compare auto rates. Remember, the cheapest insurance isn't always the best—focus on getting the coverage you need.
With this understanding of the current auto insurance landscape, we encourage you to speak with our brokers to discuss your options and find you coverage that fits your budget. Have questions about your auto insurance policy or need a quote? Our team of experienced brokers can help ensure you’re adequately covered. Contact us today at info@mooneyinsurance.ca or give us a call at 705-726-9941. You can also visit our Auto Insurance page for more details.