It’s been a long expensive year for Ontario drivers.
For a full year now, Ontario auto insurance rates have been increasing. In the third quarter (Q3) of 2018, the Financial Services Commission of Ontario (FSCO) reported that approved rates increased on average 2.06 per cent.
This is the fourth straight quarter in a row that rates have increased. In Q2 2018, approved rates increased an average 1.11 per cent, in Q1 they increased 2.23 per cent and in Q4 2017 they increased on average 1.03 per cent.
It's a troubling trend that the provincial agency says, in its quarterly rate approvals statement, they’re going to keep an eye on: "FSCO is monitoring two evolving trends that may be affecting auto insurance rates in Ontario. First, insurance companies are reporting an increase in claims costs related to property damage, in part because of the rising cost of repairing increasingly technologically advanced vehicles. Second, FSCO notes the growing concern related to distracted driving. As the number of accidents due to inattentive driving increases, so too do the claims costs."
Who is FSCO and what is their role in all this?
FSCO is a regulatory agency of Ontario’s Ministry of Finance. Its mandate is to, “provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates” which includes the insurance sector among others. The agency is accountable to the province’s Minister of Finance.
From an auto insurance standpoint, one of FSCO’s roles is to oversee the rate changes that insurers want to implement. An insurer cannot increase, or decrease, their rates without getting approval from FSCO first. To get approval, the regulator says, the actuarial data and supporting documentation needs to show that the rate changes are: just and reasonable, not excessive, and not going to impair the company’s financial solvency.
Some drivers will see significantly higher rates on renewal
Although approved rates increased 2.06 per cent on average last quarter, some drivers will see increases that are significantly higher, from an average 2.5 per cent to a high of 11.6 per cent. As a result, FSCO urges consumers to shop around, as rates can vary considerably owing to each insurer’s claims costs and rating system.
Auto insurance prices are slated for discussion at Queen’s Park
Recently, a pair of GTA MPPs tabled legislation at Queen’s Park that could affect how your Ontario auto insurance prices are determined. The two private member’s bills, one tabled by a PC and the other by an NDP, both set out to change auto insurance pricing that takes into consideration where you live.
Bill 42, introduced by Milton’s Parm Gill, and Bill 44, introduced by Brampton East’s Gurratan Singh, will ensure, even if the bills are not passed, that the matter of auto insurance prices in the province are brought to the attention of, and discussed, by our elected officials.
Compare quotes to get the lowest rate and best coverage
Don’t wait for lower premiums to find their way to you, seek out a lower auto insurance rate today. One of the easiest ways to save on your car insurance is to shop around and you can do this easily online at Rates.ca.
Compare car insurance quotes today, from our network of over 30 insurance providers, to see if you can spend less on your car insurance.
UPDATE: On November 1, 2018 Bill 44 entered the Second Reading stage. It was debated and lost on division.