Although companies like yours truly have recommended for years that drivers compare the market when shopping for car insurance, it doesn’t hurt to have a push in the right direction from a provincial regulator.
After commissioning Toronto-based Forum Research for an online poll last fall, the Financial Services Regulatory Authority of Ontario (FSRA), which regulates auto insurance prices in the province, found that an underwhelming number of Ontarians compare rates when securing or renewing car insurance policies.
On Friday, February 18, 2022, the FSRA released a recommendation to Ontarians to shop around more for car insurance. And when a provincial auto insurance regulator tells you to compare insurance rates, it’s probably time to listen.
Of the 1,271 Ontarians aged 18 and over included in the poll, only 27% confirmed they shopped around before purchasing a car insurance policy in the last 12 months. Not to mention the fact that only “six per cent of people are very familiar with the way their auto insurance rate is calculated,” according to the FSRA’s recent press release.
If you’re unaware of the various factors that determine your rate, you might not realize how much rates can vary from company to company or year over year. Take, for example, how the COVID-19 pandemic caused insurance companies to offer discounts and rebates for customers who were driving less. Of the Ontarians who participated in the poll, only 56% knew about these discounts, and of those, 80% took advantage of them and received money back.
Clearly, more Ontarians could benefit from keeping their insurance provider up to date on lifestyle changes and from understanding the agency they hold when it comes to their own car insurance rate.
“As a consumer you have a right to ask your insurance company for the lowest rate possible for the coverage that is best for you,” said Tim Bzowey, executive vice president of auto/insurance products at the FSRA, in the press release. “Auto insurance is legally required for anyone who drives in Ontario, so we urge everyone to take advantage of any discounts being offered by auto insurers, such as safe driver or home and auto bundling.”
Because many factors determine your car insurance rate, including your postal code, age, car model, driving record and experience, and the length of your commute to work, it’s important to understand how different companies rate your risk.
Beyond factors personal to you, rates can also change based on the number of claims an insurance company pays out in a given year versus the premiums they bring in. The company that might have offered you the lowest rate last year won’t necessarily be the one with the best rate for you this year. Or if a newer insurance company is trying to grow their customer base, you might find a lower rate with them. You might also be able to secure a lower premium by bundling your home and auto policies with one company. This is why it’s in your best interest to shop the market not just when purchasing a new policy, but when renewing your current one.
The FSRA poll revealed that 25% of the respondents who shopped for car insurance last year received only three quotes. That’s a small slice of the market. A site like RATESDOTCA allows you to compare quotes from more than 50 providers across Canada. Similar to how you’d compare hotel rates on a travel booking site, you should compare car insurance rates, too.
So, the next time your driving situation changes, or your policy is up for renewal, we — and Ontario’s car insurance regulator — recommend shopping around.