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By Debbie Arnold of Sound Insurance
April 22, 2019
Contrary to the Liberal government’s 2013 mandate to reduce Ontario Automobile Insurance rates by 15% by 2015, we’ve seen rates steadily rise since then with double digit increases for some carriers in 2019. Unfortunately, this trend will continue until Ford’s government implements much needed reform to the delivery of the Ontario Automobile Product.
Understanding that all rate increases are government approved, its not hard to imagine that insurers are losing money on this product and are raising rates to offset the cost of claims.
Claims costs are rising for many reasons;
- Although newer vehicles tend to be safer, they’re more expensive to repair because of the more technical features
- Lawsuits, whether or not they are merited, are becoming more and more prevalent and seeking higher awards. Most lawsuits begin at $1,000,000.
- Fraud remains a major component of claim cost despite insurers cracking down on suspected fraud.
- Severe weather is impacting cost as well with hail and wind storms damaging more vehicles.
Ontario is not alone in rising premiums. Across the country, auto and property insurance premiums are increasing with B.C. drivers paying the most. Although Alberta carrier rates are on a moratorium for increases of no more than 5%, premiums have increased there as well and Atlantic Canada is facing diminished capacity as fewer carriers are writing business there.
That being said, its not all doom and gloom. Shopping your personal insurance is more important than ever. Making sure you have adequate limits, claims protection, and proper coverage at a reasonable price is essential. Insurers’ rate increases are effective at different times, so you may benefit simply from timing. Just be mindful that if you cancel a policy in the middle of the term, a cancellation fee will probably apply. It’s always best to shop within 30 days of your expiry date to ensure rate accuracy.
Take advantage of group programs available to you through association memberships, employment programs and alumni programs. If you’ve had an at fault loss in the last 6 years or a property claim in the last 5 years, other carriers will probably not be competitive.
In Ontario, our hope is that the Ford government will alleviate cost by implementing treatment protocols, limiting law suits and incarcerating fraudsters. Just these three things would reduce premiums dramatically.
Sound Solutions, Sound Advice, Sound Insurance!
Debbie Arnold
Group Business Development Manager
debbiea@soundinsurance.ca
416-646-0155 or 1-888-756-3334 extension 321
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