With the most expensive premiums in the whole country, auto insurance is a big deal in Ontario, especially during election time. Before being elected, the Ontario Liberal Party promised a 15% drop in auto insurance rates by August 2015. Well it’s nearly a year later and we still haven’t hit that target, but it is getting cheaper.
The Financial Services Commission of Ontario’s (FSCO) approved rate changes go into effect today bringing with them an average rate change of -3.07%. The low average change may not sound very exciting, but for many, a small price drop is better than nothing. Despite the overall trend going down, some drivers may actually find their rates going up when they renew their policy. If that’s the case, it’s time to negotiate a lower rate or shop around for a new insurance provider.
Lower premiums come with a cost
While many drivers will appreciate the lower rates it’s important to note that average prices aren’t the only thing that’s different about auto insurance today. The FSCO approved some other changes that likely had to be made in order to lower the premiums.
Insurers are allowed to reduce Statutory Accident Benefit amounts in order to pay for the lower premiums. Benefits for Non-catastrophic injuries have been reduced from a combined $86,000 ($50,000 for medical and rehabilitation and $36,000 for attendant care) to a combined $65,000 with the option for drivers to increase the coverage to $130,000 in total.
For catastrophic injuries the benefits were reduced from a combined $2,000,000 ($1,000,000 for medical and rehabilitation and $1,000,000 for attendant care) to a combined $1,000,000 with the option to increase it to $2,000,000 in total.
Minor at-fault accidents may no longer increase premiums
If you cause a minor collision you can avoid an increase in your premiums by paying the damages out of your own pocket provided the accident meets the following criteria:
- No payment has been made by an insurer
- There are no injuries
- Damages are less than $2,000
This option is only available to drivers for one minor accident every three years.
Interest rates are reduced for monthly payment plans
The maximum interest rate that insurers can charge on monthly premium payments has been reduced from 3% to 1.3% on one-year plans. Shorter terms will see corresponding reductions.
With all these changes it’s important to review your policy and make sure you still have the coverage you want for the price you want.