We just saw one of the biggest jump in auto insurance rates in years.
Auto insurance companies have raised their rates an average of 3.35% in the fourth quarter of 2018, based on rate approvals from the Financial Services Commission of Ontario (FSCO). FSCO is responsible for regulating auto insurance in the province.
This is the fifth-straight quarterly increase — in the third quarter of 2018, rates rose by an average of 2.06%. The last time rates decreased was the third quarter of 2017, when they fell a paltry 0.1%.
The increases come as the Ontario government has begun a consultation on how it can lower insurance for drivers in the province. The Putting Drivers First consultation will run until Feb. 15 and is soliciting feedback about how satisfied drivers are with their insurance and what they think about the current insurance shopping experience in the province.
There are nearly 10 million drivers in Ontario. Under Canadian law, all drivers have to have insurance coverage for their car. Unfortunately, drivers in the province are paying some of the highest rates in Canada for that privilege.
One insurer hiking rates as high as 34.87%
While rates will be rising an average of 3.35%, some insurers are actually hitting their customers with much higher increases.
Hartford Fire Insurance Company was approved for the largest rate hike — premiums will be going up 34.87% for new customers this month and for renewals beginning April 1.
Aviva General Insurance Company will raise rates 16.8% this year, while Coachman Insurance Company will be raising rates 16.02%. Rounding out the highest increases are Certas Direct Insurance Company, which will be raising rates 14.57% and Sonnet Insurance Company, which will hike them 14.55%.
What's causing higher rates?
These are no doubt shocking hikes for a lot of customers. Insurance companies have argued that they have to raise rates because their claims costs are going up for a number of reasons, including rising auto insurance fraud, more costly vehicle repair and a jump in accidents due to distracted driving.
Others have accused the insurance industry of being quick to hike rates when their expenses rise, but slow to lower them when they fall. A study commissioned by the Ontario Trial Lawyers Association found that while average claims costs per vehicle in Ontario declined 15.5% between 2010 and 2016, average premiums per vehicle declined only 4.8% within the same period.
Either way, 2019 is shaping up to be a painful year for drivers. A friendly reminder that if you’re up for renewal, make sure to compare insurance rates beforehand to make sure you’re getting the best rate. As you can see below, not everyone is raising rates. You definitely want to consider changing insurers if you’re facing a big rate hike.
Below is a full list of the rate approvals for Q4 2018.
|Company||Market Share (%)||Approved Rate Change (%)|
|Allstate Insurance Company of Canada||5.57||4.50|
|Aviva General Insurance Company||5.34||16.80|
|Aviva Insurance Company of Canada||6.60||8.63|
|Belair Insurance Company Inc. (2)||5.19||0.00|
|CAA Insurance Company||1.38||1.65|
|Certas Direct Insurance Company||2.80||14.57|
|Coachman Insurance Company||0.46||16.02|
|COSECO Insurance Company||1.29||5.03|
|Economical Mutual Insurance Company (1)||6.29||0.00|
|Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals) (2)||1.75||0.00|
|Guarantee Company of North America, The||0.60||6.66|
|Hartford Fire Insurance Company||0.00||34.87|
|Heartland Farm Mutual Inc.||0.33||6.98|
|Northbridge General Insurance Company (2)||0.65||0.00|
|Pafco Insurance Company||0.38||6.00|
|Pembridge Insurance Company||1.48||7.95|
|Personal Insurance Company, The||4.08||10.05|
|S & Y Insurance Company||0.06||9.48|
|Scottish & York Insurance Co. Limited||1.15||5.84|
|Sonnet Insurance Company (1)||0.51||0.00|
|Sonnet Insurance Company||0.51||14.55|
|Traders General Insurance Company||1.63||8.64|
|Unifund Assurance Company||2.97||4.04|
|Zenith Insurance Company||0.44||10.12|