Why are Personal Automobile and Property rates on the rise...still?

By Debbie Arnold of Sound Insurance
August 15, 2019

As we progress through 2019, automobile and property insurance premiums continue to climb. This is not a phenomenon exclusive to the Ontario marketplace. Rates are increasing across Canada with B.C. paying the highest rates.

All provinces are struggling with increased claim costs. On the automobile side, physical damage claims are more expensive because of all the technology installed in collision sensitive areas of vehicles. Although these features are supposed to make vehicles safer, until all vehicles on the road carry the same tech, collisions are going to occur. Five years ago a bumper would cost under $1000 to repair whereas now it will exceed $2500.00. These increased costs trickle down to the consumer.

Lawsuits are much more prevalent across the country and are requesting much higher awards. Over the last 2 years, insurers are beginning to take a stand against unmerited lawsuits but in the meantime, when presented with a $1,300,000 lawsuit for a scratch on the bumper, they have to set aside reserves (funds to pay for the award if successful) to ensure funds are available once the lawsuit is settled.

With respect to property, anyone that thinks climate change is a myth should speak to a property adjuster. Severe weather is clearly on the rise. In 1983 Canada saw only two major weather events; July in Saskatoon and August in Edmonton. In 1993, Canada saw 5 major events while in 2017 there were 17 large events in Canada. In the first 5 months of 2018, over $1.9 Billon was paid in property claims. Water damage losses now comprise 67% of property claims in Canada.

When insurers are paying out five to twenty cents more than every premium dollar they bring in, rates will increase to offset these losses.

As a consumer, it’s difficult to imagine that your clean driving record and claims free status has garnered a 10% to 20% rate increase understand that the basic premise of insurance is the spread of risk of the few among the many. However, when the few become many, premiums will increase.

So what do you do?

  • Shop your insurance within 30 days of renewal. Rates are volatile so if you’re looking for a quote 60 days ahead of your renewal date, you’ll probably be disappointed that the rate has changed when you go to write up a new policy.
  • Access group programs through your employer, alumni or trade association.
  • Combine your auto with your property insurance but make sure you have the same or better coverage
  • If your kids in the house have their own cars, get quotes from the same carrier. Most companies allow multi-vehicle and multi-policy discounts for household members
  • Make sure all the information is correct. If you’re driving only 6000km annually but your policy shows 15,000km, change it.


At the end of the day we all want lower premiums. This will only be accomplished when nuisance lawsuits abate and we all take a serious look at how we can do our part to address climate change.


Debbie Arnold
Group Business Development Manager
Sound Insurance Services Inc.
416-646-0155 or 1-888-756-3334 extension 321








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