As an Insurance Brokerage, we do not set our own insurance premiums; this is done by each Insurance Company that we represent. The FSRA quarterly publishes these rate changes, and the most recent updates can be found here.
As per regulatory requirements, every insurance company in Ontario is obligated to seek approval from the Financial Services Regulatory Authority of Ontario (FSRA) for any adjustments to their auto insurance rates. These adjustments may increase or decrease premiums; however, due to recent inflationary pressures, it is more common to see increases than decreases these days. Legislative interventions, such as the mandated auto insurance discounts for winter tire usage, can also contribute to occasional decreases.
FSRA encourages consumers to explore options and shop for competitive Ontario car insurance coverage. At Northern Insurance Brokers, we have access to over ten of Canada’s top auto insurance markets and will work with you to find pricing and protection that fits the needs of your family and your assets. There’s no need to shop around when we’ll do the work for you!
Even with options, it’s important to understand what is leading to higher auto insurance rates. Some of the factors contributing to increasing auto insurance rates in Ontario include:
- Inflation and Supply Chain Issues: The cost to repair and replace vehicles has steadily risen over the past several years, mostly due to inflation and the continued supply chain issues that began during the COVID-19 pandemic. When these costs increase, the rates for Collision, Comprehensive, and DCPD must follow in order to ensure that damaged vehicles can be repaired or replaced accordingly. Vehicles also rely on technology more than ever, and the cost to replace a part in a newer vehicle may be much higher than the lower-tech versions found in older vehicles.
- Increased Auto Theft: Over the past few years, vehicle theft incidences have drastically increased, especially in larger city centers throughout Ontario. Certain vehicles are at a higher risk of being stolen, as they are targeted based on their demand to be sold illegally, either overseas or on the black market. Many insurers have responded by adding a surcharge to vehicles that are more likely to be targeted.
- Rise in Distracted Driving Incidents: With technology continuing to become more and more prevalent in our lives, it can be hard for some people to disconnect. Unfortunately, this includes while driving, and as a result, there are more distracted drivers on the road than ever before. It isn’t just cellphone use – things like eating while driving and using vehicle navigation systems also contribute and lead to more distracted driving accidents on the road. The Ontario government has responded by increasing the fines and discipline associated with Distracted Driving. However, auto premiums still need to increase as a result of more accidents on the road.
- Rise in Insurance Fraud Incidents: When the price of any good or service increases, there are always going to be certain individuals who try to find their way around it. Fraud in Insurance leads to increased costs for insurance companies, and in turn, premiums may need to increase to cover these costs. It is important to be honest with your Insurance Broker in order to ensure your pricing matches your protection and ensure that any losses can be covered as expected.
Despite these challenges, there are proactive measures individuals can take to reduce their insurance rates; check out our previous post on how to unlock insurance savings.
To stay informed about developments in the insurance landscape, we recommend staying updated on regulatory approvals and industry trends. If you have any questions or require further assistance, please do not hesitate to contact us.
Here at NIB, we do more than just sell insurance – we are your partners in protection. The next time you wonder about protection, claims, or settlements, remember that your trusted broker is just a call away, ready to navigate the complexities of insurance alongside you. Contact us or call 705-949-6555 to get started!