The overall standard of living in Canada varies from one province to another. The cost of housing, food, gas, and other essential things vary depending on the area. The car insurance charges also vary depending on the region.
All over Canada, the cost of insurance is quite reasonable. However, the car insurance charges in Ontario are much higher than in other areas.
Out of the ten provinces of Canada, three of them(B.C, Manitoba and Saskatchewan) have government-owned and operated insurance systems. In the province of Quebec, the central government is responsible for coverage for damage to the vehicle. The private insurance companies cover any type of property damage insurance.
On the other hand, private insurance companies cover all the insurance claims of the rest of the six provinces, mainly Ontario and Alberta.
You may be asking yourself questions like, “why is my car insurance so high?”. Car insurance charges in Ontario are pretty expensive. On average, most Canadian insurers pay a lot more than they earn in revenue.
Some of the common reasons include increasingly severe weather conditions, insurance fraud, and other secondary factors that have increased the overall cost of car insurance in Mississauga over the last 20 years.
If you’re looking for affordable car insurance in Mississauga or other parts of Ontario, be sure to contact a reputable brokerage, like Surex.
How have the auto Insurance charges changed in Ontario?
As per the Insurance Bureau Of Canada, the average annual auto Insurance premium was $1505. However, after the pandemic, by Dec 2020, the insurance premium had increased to $1616. Throughout 2020 and 2021, most insurance companies in Canada have offered discounts, debates and other features to help their customers deal with financial crunches during the Covid-19 period.
However, the Financial Services Regulatory Authority (FSRA), the car insurance regulator in Ontario, is responsible for deciding whether the insurance companies can increase or decrease the rates. In 2021, FSRA allowed two insurance companies to increase their insurance rates, resulting in an overall market increase of 0.03%.
Why is car insurance so high in Ontario compared to the rest of Canada?
Your car insurance premium amount depends on several factors. Some of the important ones are:
- Your age, marital status and gender
- Your driving history and overall experience
- Whether or not you regularly use your vehicle to drive to work
- The type of vehicle you are driving and the number of kilometres you would drive per year.
Your insurance premium amount also depends on the type of car insurance policy you have and whether or not you have to add on optional coverages like comprehensive insurance and collision coverage. Furthermore, the price can also increase if you choose mandatory coverage limits like accidental benefits, uninsured auto protection and third-party liability.
Here are some of the important factors that influence the cost of insurance premiums in Ontario. The driver or the car owner cannot control these factors.
Extreme weather conditions
The climate in Canada is changing rapidly. Nowadays, there are frequent catastrophic storms in various parts of the country. Bad weather conditions have cost the country up to $2.4 billion in insured damages in 2020, which is a lot more than the cost in 2019 – about $1.3 billion.
Ontario was hit by two of the strongest storms in 2020. On January 20, Ontario was hit by a snowstorm which cost about $98 million in damage. In November 2020, Ontario was hit by a wind storm which cost the province about $88 million. These have contributed to increased insurance rates.
Fraud cases
According to the IBC, insurance frauds are quite common in Ontario and cost every driver up to $236 per financial year. So each vehicle owner pays about $236 insurance coverage for the cost of fraudulent insurance claims per year.
The total cost of repairing vehicles
Previously, if you were in an accident and had to adjust your bumper, it would have cost you only a couple hundred dollars.
Nowadays, most vehicles come with advanced technology and equipment. Some of these equipment and gadgets are more susceptible to damage during accidents.
Some advanced pieces of equipment that you will find on most cars include:
- Rearview camera
- Front camera
- Sensors in mirrors
- Driver assistant technology
- Built-in GPS unit
- Smartphone integration
- Smart touch display
This advanced equipment has converted the vehicle into a moving computer. Nowadays, even most headlights and wipers have sensors in them. This means that even a minor repair or regular maintenance work will cost you thousands of dollars.
Careless driving
Drivers and motorists who do not pay complete attention to the road while driving because they are on their phone or doing something else are the major reasons why the insurance premiums charges are increasing. This is because distracted driving leads to accidents, traffic violations, injuries and even deaths.
According to the government, the number of deaths due to accidents or collisions has doubled since 2002.
Inflation
Inflation or the rise in prices is a major problem, and it has contributed significantly to the cost of insurance premiums in Ontario.
Will the car insurance premium rates drop in Ontario?
If the Financial Services Commission Of Ontario approves lower car insurance rates, the charges may drop. Inflation in the province has contributed to a significant increase in the cost of insurance premiums, ranging from 0.93% in 2013 to about 2.57% in 2018.
However, sudden drops might happen if there is a change in the legislation and regulation. For example, many governments in other provinces have mandated discounted auto Insurance rates for all the drivers who use snow tires. This is because snow tires reduce the chances of accidents which helps lower the cost of driving for all the people who have invested in driving safety.
Endnote
Buying car insurance is compulsory in Ontario. However, unlike in BC, the government allows the citizens to look around for the best deals from private insurance companies. So it is advised that you take some time to compare the various insurance companies and then get a competitive quotation for the amount of coverage you need.
Additionally, you are advised to buy vehicles with good safety features like brake assist and airbags.
Also, vehicles with high crash test scores and medium-range engines have cheaper insurance rates than high utility cars.
