Auto Insurance

Drivers across Canada are paying more for car insurance after Q2 rate hikes

By: John Shmuel on July 31, 2018
Article image

Car insurance prices are rising in every major market that we currently track, according to the latest data from the Auto Insurance Price Index.

Prices for drivers rose in Ontario, Alberta and Atlantic Canada in the second quarter, with the biggest increases occurring in Alberta.

The average driver in Alberta was paying 8.29% more in the second quarter when compared to the same time last year, and 2.84% more when compared to the previous quarter.

In Ontario, prices rose 0.67% when compared to a year ago, and 2.93% when compared to the second quarter.

In Atlantic Canada, which includes Newfoundland and Labrador, New Brunswick, Nova Scotia and Prince Edward Island, prices rose 0.92% when compared to the first quarter. Data from a year ago isn't available.  

The Insurance Price Index tracks data from the millions of Canadians who have used the auto insurance quoter, which is created in partnership with Applied Systems Canada.

Alberta drivers see biggest price increases

When insurance rates rise, insurance companies are signaling that their costs are going up. That means they're either seeing their customers get into more accidents, or the cost of those accidents is going up.

Albertans currently pay the third highest insurance rates in Canada — $1,179 a year for an average driver, according to a report from the Ontario Ministry of Finance released last year. That compares to a Canadian average of $930. Drivers in Ontario, the most expensive province for car insurance, pay an average of $1,458. 

Insurance companies have to apply to the Automobile Insurance Rate Board (AIRB) whenever they want to raise their rates. Last quarter, data from AIRB shows the biggest rate increases went to Wawanesa Mutual Insurance Co. (+10.7% for basic coverage), Aviva General Insurance Co. (+6%) and Novex Insurance Co. (+5.8%).

Ontario prices rising this year after declines last year

Prices in Ontario haven't climbed as quickly as Alberta, but that's little consolation to the province's drivers, given they pay the most expensive premiums in the country.

So, what's causing prices to rise? The Financial Services Commission of Ontario, which regulates insurance, has flagged two issues it's watching that may be causing higher costs for insurers, and thus, higher premiums for consumers. 

First, there is a rise in distracted driving — the phenomenon of drivers looking away from the road, often to check their phones. This may be leading to an increase in accidents and tickets, both of which can cause premiums to rise.

Second, cars today are more technologically sophisticated — so when they get into accidents, repairing them costs more. 

Looking at rate approvals from FSCO, a handful of companies saw some pretty substantial increases to their insurance rates. Primmum Insurance Co. was approved for a 5.01% rate increase, while Security National Insurance Co. raised rates by 3.99%. S & Y Insurance Co. raised rates by 3.71%.

Prices up in the Atlantic provinces

The data here is too new to make a meaningful conclusion about what's happening. only started offering insurance quotes to Atlantic drivers last October.

After declining last quarter, rates in Atlantic Canada are on the rise, likely due to many of the factors seen in Ontario and Alberta.

Our report currently does not individually track all four provinces in Atlantic Canada, but we expect that in the future, as we collect more data, we'll be able to issue indexes for each province. That will allow us to more meaningfully tell Atlantic Canadians what is happening to their insurance rates.

The bottom line 

Rates are clearly going up. But while we highlighted some companies that are increasing rates, others have actually lowered theirs. That's why it's important to be an informed consumer when it comes to insurance.

Whenever your premium is up for renewal, start comparing rates. You might find a better deal elsewhere.