Auto insurance companies in Ontario are raising their rates by as much as 1.11% on average during the second quarter of 2018, which means that drivers in Ontario continue to face higher premiums. This is the third straight quarter showing a rate increase. In the first quarter of 2018, auto insurance company rates increased by 2.23% and in the 4th quarter of 2017, by 1.03%.
Who handles auto insurance rate increases in Ontario?
Rate increases are determined by the Financial Services Commission of Ontario (FSCO). They regulate insurance pricing in the province. Insurance companies apply to the FSCO to make rate changes rates for their customers.
In comparison to the rest of the country, drivers in Ontario currently pay the highest rates. Insurers in the province often overcharge customers and there have been issues with fraud. On average, a driver in Ontario pays $1,458 for their insurance policy. Drivers in B.C. pay $1,316 on average – the second most expensive province. Quebec drivers pay the cheapest insurance – an average of just $724.
Some decreases in auto insurance rates…
Good news – some insurers decreased their rates, including SGI Canada Insurance Services Ltd. The company was approved for a 0.69% decrease on any new policy or renewal. A 0.29% decrease was also approved for Northbridge General Insurance Corp.
No company was able to lower their rates by 1% or more. However, several had large increases, such as Economical Mutual Insurance Company which raised rates by 8.15%. Primmum Insurance Company had an increase of 5.01% and Security National Insurance Company saw an increase of 3.99%. Changes won’t take place immediately, but new and existing customers will be affected. Customers should always check their insurance policies when changes like these take place.
Why do auto insurance rates fluctuate?
There are several reasons why insurance rates fluctuate. First the company must be approved for the change by the Financial Services Commission of Ontario (FSCO), the regulatory agency of the Ministry of Finances, which publishes rate changes on a quarterly basis.
Customers should shop around for the best auto insurance rates before they purchase their insurance if they want to save money. According to the FSCO, rates between insurers can differ greatly. The insurer’s rating system and claim experience can affect the rates they charge you.
Your rates may change without you even realising. You should check your rate periodically for any changes. The rate offered last year may no longer apply when it comes to renewing your auto insurance. If you go online, you’ll find many places to compare auto insurance rates and find the best deal for your needs.
Why is Ontario experiencing changing auto insurance rates?
Ontario is seeing rate changes for several reasons. One of the main factors is rising claim costs experienced by insurance companies. Newer vehicles involved in accidents are more expensive to repair, which adds to the rising costs of insurance.
Other factors include incidents of distracted driving, which add to direct compensation costs and the claims that insurance companies have to process. Companies have to pay more in claims and this leads to higher insurance rates.
If you look at the statistics, drivers in Ontario pay more for their auto insurance coverage compared to other drivers in Canada. Drivers in urban areas tend to pay more than those living rural areas, as more crashes take place in busy urban settings.
Politics can affect auto insurance rates
Politicians can also impact your insurance rates. For example, before he became party leader Doug Ford said that he planned to end the practice of basing auto insurance costs on your place of residence. But, he failed to directly address this in the province during the elections. He instead focused mainly on lowering hydro fees and removing the carbon tax. Different government policies may have an impact on insurance rates.
Your insurance rates can change based on a wide range of factors. It’s important to check your rates regularly to ensure that you’re getting the best deal. You may find that another insurance company is offering better rates, and a change to a new insurer could help to reduce your overall insurance costs. It makes sense to use online comparison tools to find the best insurance rate for your needs.