It’s difficult to predict the future of the auto insurance market. But based on recent history, we believe auto insurance prices in Ontario will keep climbing.
The auto insurance industry is regulated by the Ontario government. Auto insurance companies have the opportunity to lobby the province for permission to raise rates. Approved rate increases are then made publicly.
The table below shows that the province has agreed to increases every quarter since the beginning of 2018:
|2020 Q4 (Oct. 1 - Dec. 30)||-1.81%|
|2020 Q3 (Jul 1. - Sep. 30)||0.00%|
|2020 Q2 (Apr. 1 - Jun. 30)||+3.93%|
|2020 Q1 (Jan. 1 - Mar. 31)||+1.62%|
|2019 Q4 (Oct. 1 - Dec. 31)||+1.56%|
|2019 Q3 (Jul. 1 - Sep. 30)||+2.60%|
|2019 Q2 (Apr. 1 - Jun. 30)||+1.99%|
|2019 Q1 (Jan. 1 - Mar. 31)||+2.70%|
|2018 Q4 (Oct.1 - Dec. 31)||+3.35%|
|2018 Q3 (Jul. 1 - Sep. 30)||+2.06%|
|2018 Q2 (Apr. 1 - Jun. 30)||+1.1%|
According to LowestRates.ca’s very own Auto Insurance Price Index, which uses data from quotes generated on our site to track the movement of auto insurance prices in Ontario, the average premium for our customers rose in 2019 by 13.85% compared to the same time period a year before.
Prices have increased virtually every quarter since the beginning of 2018.
The Financial Services Regulatory Authority of Ontario has highlighted several factors that may have contributed to the consecutive rate increases:
- Distracted driving accidents.
- Rising claims costs caused by modern cars, which have sensors, touch-screens and computers built-in, making them more expensive to repair.
- Insurance fraud.
Insurance companies say they’re up against high loss ratios. Translation: they’re spending more on claims than they're taking in from premiums.
On top of that, industry officials argue that Ontario’s system of regulating auto insurance prices has exacerbated loss ratios, which in turn has caused companies to push harder for the right to raise prices every quarter.
Previous government-led attempts to curb price increases have been ineffective.
In 2013, the previous Ontario government promised to put downward pressure on auto insurance rates across the province. It failed to hit its goal of reducing rates by 15% by August 2015.
In 2019, the current provincial government announced new proposals aimed to make insurance more affordable, including introducing new discounts, cracking down on insurance fraud, and allowing companies to make policies more customizable.
There’s still hope for consumers, though. Despite the wider trend of rising prices, there are ways to lower your auto insurance costs: be a good driver, raise your deductible, and apply for discounts.
And the number one thing that can lower your costs right away? Compare car insurance quotes.
Insurance companies are not all alike. And not every insurance company has raised its prices. A new one might favour you more than your current provider.
That’ll become apparent when you compare car insurance quotes and see the spread in prices