Why Are My Car Insurance Premiums Going Up?

Your driver profile, which includes where you live, your age, and your driving record, plays a crucial role in determining your insurance premium. However, other key factors contribute to the rising cost of car insurance rates. Some of these are out of your control, such as increases in car repair costs and disaster-related claims, which also play a role.

• Location:  Whether you live in a rural or urban area can impact how much you pay for car insurance. Living in a place where car insurance repairs are more expensive or where there is a high likelihood of theft and vandalism increases the cost of your coverage.

• Claims: Following a vehicle accident, a claims adjuster will either arrange repairs or deem your vehicle a total loss, offering a cash settlement. However, a shortage of autobody repair workers is causing wages to rise, while a lack of replacement parts is leading to increased expenses and extended repair durations. This situation also increases the demand for longer-term rental vehicles. Not only are cars more expensive to fix or replace, but individuals now need rental cars for longer durations while their vehicles are in body shops. 

• Inflation: While inflation continues to slow, it still impacts your car insurance premium. Insurers need to adjust their rates to keep up with current costs, and inflation affects car insurance rates because repairing or replacing a car is much more expensive than it was a few years ago.

• Busier Roads: A change in how much we drive impacts premiums. For example, more cars on the road result in more collisions and higher claims costs. Since the lifting of pandemic restrictions, there are more drivers on the roads as more people return to the office. 

• Auto Theft: Insurers use factors such as how often your car’s make and model are stolen to set your insurance premiums. According to the Insurance Bureau of Canada (IBC) and the Ontario Government, car theft is rising, with a vehicle being stolen every 48 minutes. Vehicle theft now costs Canadians over $1.5 billion per year. Increased vehicle theft activities are also a driver of higher physical damage claims. 

• Technology: There is no denying that automobile advancements have made our lives much more convenient when it comes to driving. However, new technology increases the cost of fixing vehicles. For example, most cars now have rearview cameras and sensors in the front and back bumpers, which means the repair includes the bumper and the bumper’s technology. Smart keys have also made stealing your vehicle easier.

• Fraud: Fraudulent claims, such as staged accidents by fraudsters, continue to increase, contributing to a rise in auto insurance claims.

• Distracted Driving: Distracted driving is now the leading cause of automobile accidents and deaths on the road, increasing auto insurance claims.

What can you do to keep your insurance costs manageable?

1. Review your coverage with us: Discuss your insurance needs with us to understand the type and amount of coverage you actually need. For example, if you have a newer car, you might want comprehensive coverage, but if it’s older, you might opt for just liability.

• Increase your deductible: A higher deductible typically means lower premiums.

• Inquire about discounts: Many insurance companies offer discounts such as using telematic devices or installing winter tires.

• Bundle policies: Consider bundling your car and home insurance policies to save.

• Build a good driving history free of accidents and convictions: Speeding tickets, accidents, and other traffic violations may raise car insurance premiums.

• Compare vehicle premiums before buying: A car’s make, model, and year of manufacture can impact insurance rates. 

• Compare auto rates: Ask us to compare auto rates. Keep in mind that the cheapest insurance isn’t always the best. Focus on the coverage you need, and make sure you’re getting quotes that reflect that.