Are Auto Insurance Rates Going Up?

Did Auto Insurance Rates Go Up in 2020?

Will they go up in 2021?

Indeed, in 2020, there was an auto insurance rates increase across most provinces even though premiums were reduced in the first 3 months of the Pandemic. Unfortunately, 2021 isn’t any more promising.

In October of 2020, a CBC article reported that on average, personal auto insurance rates across Canada had indeed risen during the COVID-19 Pandemic, despite the fact that most Canadians were driving less.

Some auto insurance policy holders were able to negotiate lower premiums simply because they were driving less or scaled back their coverage. However, young drivers with new insurance policies often incurred higher than average prices even as COVID-19 insurance rebates were being issued to existing policy holders.

Why Auto Insurance Rates Are Rising

Some auto insurance rates increase because of conditions that existed prior to the Pandemic.

For instance, Alberta’s auto insurance rates went up by 24% on average due to pre-pandemic conditions, which were complicated by regulatory changes.

On the Atlantic coast, auto insurance premiums went up by about 13% in 2020, compared to the previous year.

Even though people are working from home in greater numbers, according to the insurance industry, other reasons for the auto insurance rates increase in Ontario include, among others:

  • Higher-than-normal insurance fraud
  • 30% or more of insurance payouts go to cover legal fees
  • Less profits than anticipated
  • Price caps (or lack thereof) and government regulations
  • More people commuting instead of using public transit
  • More costly claims due to distracted driving and more complex vehicle technology
  • Pre-pandemic conditions such as an increase in bodily injury claims and extreme weather conditions

The current Ontario government removed cap rates that were implemented by the previous government, which is also compounding the problem in Ontario.

Ontario Insurance Rates

The balance between no cap rates, higher new policy rates, insurance rebates, and higher rates due to pre-pandemic conditions makes it difficult to predict exactly how high the average rate increase will be in Ontario in 2021.

This IBC article reveals that Ontario drivers are already paying some of Canada’s highest auto insurance rates (2nd only behind British Columbia – see the image for 2019 comparison).

That said, most experts are saying to expect an auto insurance rates increase in Ontario in 2021.

How You Can Save On Auto Insurance

There are a number of things you can do to help keep your costs down even in the face of rising auto insurance rates including:

  • Shop around for the best auto insurance rates
  • Buy only the coverage you need based on usage
  • Stay accident free (clean driving record)
  • Pay your fees on time to avoid penalties
  • Avoid getting driving-related tickets or convictions
  • Combine insurance plans like auto and home insurance

About Huronia Insurance

Located in Barrie and serving clients throughout the Simcoe Region, Huronia Insurance Group has also helped clients throughout the province with their personal auto insurance needs.

We can help you understand what your coverage means in terms of insurance limits, deductibles, exclusions, and how you can save.

If still have questions about why auto insurance rates increase or if you need help finding the best rates possible, please contact one of our Huronia insurance brokers today at 1-866-955-8386.

Request an Auto Insurance Quote