Car insurance prices are rising again in Ontario after an unprecedented period of no growth during provincially mandated quarantines.
Mass vaccination programs have allowed Ontarians to return to routines resembling pre-pandemic ones, which included much more driving. More cars back on the road means drivers are more likely to be in a collision that results in a claim, which their insurance company will pay.
Predictably, the agency that helps regulate auto insurance prices approved 56 rate increases by the end of the third quarter of 2023, compared with 29 during the same period in 2022.
When COVID-19 first struck Ontario, insurance companies issued rebates to policyholders who had decreased their coverage or needed financial relief.
The story today is very different.
Inflation is putting strain on insurers' operating budgets. And essential car parts, particularly semiconductors, have been in short supply, which is driving up prices.
A Canada-wide spike in car thefts is also aggravating the situation as drivers with comprehensive insurance file claims to have their cars replaced. Thefts in Ontario spiked 48.3% in 2022, and this year’s count is on track to surpass that.
Plus, issues that predate the pandemic, which insurers said were forcing them to raise prices, still exist.
For example, car repair costs have increased as manufacturers introduce new technologies like sensors and cameras to even economy cars.
There are more collisions, too, and the claims stemming from them tend to be more expensive. The province now reports that accident benefits and third-party liability claims account for over half of all auto insurance claims. Translated, many of these claim payouts are going towards legal and medical costs, which add up quickly.
If you feel like you're paying too much, one of the most effective and immediate ways to lower your car insurance costs is to shop around for quotes, according to the Financial Services Regulatory Authority of Ontario (FSRA). Ontario drivers save $877* on average when comparing car insurance quotes on RATESDOTCA.