What to do if your insurance provider suddenly increases your rate?

This article has been updated from a previous version. 

If your car insurance rate suddenly jumps by 30% at renewal, don’t panic—it happens to a lot of people, and you’re not powerless.

While rising premiums can feel like just another hit in an already expensive economy, there are steps you can take to understand why it happened and what you can do to bring it back down. 

Sometimes, the increase is tied to your driving history or the type of vehicle you own. Other times, it's driven by broader economic forces like inflation, tariffs, or climate-related disasters.  

Here’s what you need to know about the most common reasons your rate might go up—and what you can do to challenge it, reduce it, or prevent it from rising further. 

What causes auto insurance rates to go up in Canada?  

There are many reasons your car insurance rates might rise, and they can often feel frustratingly complex. In most cases, the increase is tied to your driving habits or decisions about the type of vehicle you own. 

Reasons within your control  

Premium hikes are frequently linked to an increase in claims—either ones you’ve filed yourself or those statistically associated with your vehicle. Below are some common reasons your premium may have increased due to choices within your control, even if you didn’t realize it at the time. 

Being deemed at-fault in an accident  

If you were in an accident and found at fault, then it's almost guaranteed that your premiums will rise. To be found at-fault, investigators need to find that you are responsible for 50 per cent or more of the collision.  

Even a person with a clean driving record can have their premiums rise by 30 per cent or more following an at-fault accident.   

Owning a vehicle at high risk of theft   

Some vehicles are stolen far more often than others —and if you own one of these, your insurance could cost more. 

According to Équité Association’s 2025 report, organized crime continues to target specific models for export and resale. The most stolen include vehicles like Lexus RX Series, Toyota Highlander and Honda CR-V. 

While vehicle thefts have dropped in some provinces — with Ontario seeing a 25.9% decrease and Quebec a 22.2% drop compared to the same period in 2024 — the overall risk remains high. Criminals continue to target popular SUVs and trucks using advanced methods like re-VINing, fraudulent exports, and chop shops.  

These tactics make it harder to trace stolen vehicles and keep high-risk models at the top of insurers’ watchlists. As a result, drivers of these vehicles may face higher insurance premiums or theft surcharges, especially if no anti-theft measures are in place. 

Read more: Top 10 most stolen cars in Canada for 2024

Buying a new vehicle that’s worth more, or more complicated to repair  

As vehicles are built with more advanced technology like e-vehicle batteries, rearview cameras and driver assistance technologies, they become harder and more expensive to repair.  

Vehicles that have harder-to-source parts, or parts that might have to be shipped from farther away, will also be more expensive to insure.  

Reasons out of your control  

While you can decide whether or not you want to buy a new car, you have little control over the economy. Here’s a few things that will increase your rates — even if you are the best driver in Canada.  

High inflation  

Canada’s high inflation rate might not seem directly tied to your car insurance premiums, but here’s how it connects: If you need to file a claim for car repairs, those repairs will cost more due to the rising prices of consumer goods. This increased cost is ultimately passed on to you, the insurance customer. 

Tariffs and the rising cost of auto repairs 

In 2025, the cost of repairing vehicles in Canada has surged because of escalating tariffs and trade tensions. The U.S. administration’s decision to impose a 25% tariff on imported vehicles and auto parts has disrupted the deeply integrated North American supply chain.  

These tariffs have led to immediate consequences: higher manufacturing costs, reduced production, and increased prices for consumers. For insurers, this means higher claims payouts.  

According to a report by Global News, the rising cost of steel, aluminum, and other materials used in vehicle repairs is driving up premiums. Even minor damage now costs significantly more to fix, and extended delays from supply chain bottlenecks further inflate repair expenses. 

Significant losses across the insurance industry from weather-related events 

In 2024, the Canadian insurance industry paid out over $9.2 billion in insured losses due to catastrophic weather events—the highest amount ever recorded in the country. This included $1.3 billion in damages from the Jasper wildfire alone, making it the second-costliest fire event in Canadian history. 

The Insurance Bureau of Canada (IBC) warns that climate-driven disasters are becoming more frequent and severe, and insurers must now prepare for the possibility that such record-breaking losses could become the norm rather than the exception. 

Five ways to reduce your insurance premium  

Whether your premiums are increasing due to factors within or beyond your control, there are several strategies you can explore to bring your car insurance back to an affordable level. 

1. Ask your insurance provider to reassess your driving history  

Mistakes happen — but they’re not supposed to follow you forever. Some tickets should stay on your record for no longer than three years; and at-fault accidents can be wiped clean after six.  

However, if a broker has let small tickets or infractions made a long-time ago influence your rate, you may have grounds for an appeal. Similarly, if the blame for a previous collision was unfairly shifted to you, you can appeal that decision, and ask for it to be looked at again.  

2. Appeal to the insurance company’s ombudsman office or file a complaint to FSRA  

If going directly to your insurance company doesn’t work, you can try going to the ombudsman—a neutral office that handles complaints about how your insurer or broker dealt with your case. They’ll review your situation and may recommend changes, including a lower rate if they find the increase was unfair. 

Each province has its own ombudsman or complaint resolution office. For example: 

• In Ontario, you can file a complaint with the Financial Services Regulatory Authority of Ontario (FSRA). 
• In Quebec, contact the Protecteur du citoyen (Public Protector). 
• In British Columbia, reach out to the Office of the Ombudsperson. 

These services are free and can be a helpful next step if you feel your rate increase was unjustified. 

3. Install anti-theft devices 

Many insurers offer a discount if you install anti-theft devices, including GPS trackers, vehicle recovery systems and hidden kill-switches to cut electricity to the vehicle.  

Make sure to ask your insurance company what discounts they do offer—and when it’s time to renew your coverage, do some shopping around to see if you can get a more competitive rate.  

4. Look for discounts and endorsements that will customize your coverage  

Are you retired? Do you drive an electric vehicle? Are you a CAA member?  

Your personal situation may actually help you get discounts on car insurance. Ask your broker what kind of opportunities are available for you.  

5. Consider Usage-Based Insurance   

Do you consider yourself a cautious and safe driver? If so, usage-based insurance might be for you.  

When you sign up for this type of coverage, insurance companies collect data about your driving habits via a device installed in your car. Your rate is based on the actual use of your vehicle.  

It’s a good option for those who don’t drive very much.