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Why Are Ontario Car Insurance Rates Going Up?

Look for Discounts to Beat Higher Ontario Car Insurance Rates

Along with inflation rates that have been the highest in decades, Ontario drivers are getting hit with higher car insurance rates.

Car insurance rates in Ontario have jumped this year and the trend may continue in 2024. You’ll need to review your car insurance policy to make sure you are getting all the insurance discounts available to you.

Top reasons for Ontario car insurance increases

  1. Higher Inflation

Higher inflation is having an impact on the cost of labour and auto parts. Insurers adjust car insurance premiums based on the expected cost of covering future auto insurance claims.

Ontario has had an 8.1% increase in the cost of vehicle parts, maintenance and repairs. This type of increase impacts the cost of claims involving physical damage to vehicles.

Auto insurance premiums in Ontario have risen by 14% in the past 6 years and will likely continue to climb.

  1. Physical claims costs

What if you get into an accident? The technology in a new car tends to increase the cost of fixing it after an accident.

New technology, such as sensors and cameras in a bumper, increase the cost of repairs because the bumper, sensors, and cameras all must be repaired.

  1. Car theft

Higher rates of car theft in Ontario can also impact your insurance premium.

According to the Financial Services Regulatory Authority of Ontario (FSRA), there was a 65% increase in theft claim costs in 2021. FSRA expects claims costs to continue to increase.

Insurance companies consider the risk of theft when they are determining car insurance rates in Ontario.

Talk to your Western Financial Group car insurance expert about incentives or discounts for installing anti-theft devices in your car.

  1. Traffic

There are more cars on the road in Ontario and how much we drive has an impact on our car insurance. More cars on the road can result in more collisions and higher claims costs.

Traffic is also returning to pre-COVID-19 levels.

You can check to see whether your Ontario car insurance provider has been approved for a rate increase on the FSRA website.

Did you know that car insurance rates in Alberta and Ontario were the most expensive in Canada?

How to save on your Ontario car insurance

  1. Bundle your home and car insurance

When you bundle your Ontario car and home insurance with Western Financial Group, you can get a discount and it’s an easy way to cut costs without cutting coverage.

Do you have more than one car? If they’re insured under the same policy, you can save money on your car insurance with a multi-vehicle discount.

Do you have a motorcycle, snowmobile, ATV, or recreational vehicle (RV)? You can bundle your toys with your car and home insurance to save, but you need to have car insurance to bundle everything together for a multi-product discount.

If you’re an Ontario renter, you can bundle your renter's insurance with car insurance to get a discount.

Don’t be confused if you see bundling referred to as a multi-policy or multi-product discount.

  1. Yearly kilometres

If you don’t drive much, you could save money on your Ontario car insurance. Some insurers define low-mileage drivers as people who drive fewer than 10,000 kilometres a year.

If you don’t drive much, you may fall into this category and get better rates based on your kilometres driven per year.

  1. Your deductible

Your deductible is the amount of money you are responsible for paying out-of-pocket before your insurance company covers the costs of an accident you’ve been in.

If you choose a higher deductible, or if you raise it when your policy renews, you could substantially lower your Ontario car insurance premium to save. That’s because you are agreeing to be responsible for a larger part of any potential claim costs.

While you’re hoping to stay accident free, make sure that you can financially handle your higher deductible.

If you have a car that’s more than 10 years old, you may want to reduce your deductible because your car is likely only worth a few thousand dollars.

  1. Soft credit check

A soft credit check will allow your Western Financial Group car insurance expert to give you the best price for your Ontario car insurance. It is a factor that determines the level of discount available to you to save on your car insurance.

A soft credit check looks at the information in your credit report, but it does not impact your credit score.

  1. Type of vehicle

Higher-end car models that require specialized parts and labour cost more to insure than a popular model with basic and parts.

  1. Claims free

The longer you’re claims-free, the more you can save. You’ll get the most out of saving on your Ontario car insurance when you reach the maximum number of consecutive claims-free years.

  1. Experienced driver: The more years you’ve been licensed, remained claims free and maintained continuous insurance, the lower your premium should be.

Check to see if you can get a discount or reduced premium if you are over 60 and have remained claims free.

Younger driver: Your student driver can save money on their car insurance premiums when they complete an accredited driver’s training course.

  1. Use-based insurance (telematics)

Your Ontario car insurance rate should decrease if you are using usage-based insurance (UBI) because it allows your premiums to reflect the time more accurately that you spend driving and your driving habits.

UBI is optional and it captures such factors as how fast you accelerate, how often you brake, and how many kilometres you drive yearly.

While it rewards good driving with a rate discount, a surcharge can be added if you engage in risky driving behavior.

  1. Premium payment options

You can apply for a Premium Financing Plan with Western. Our premium financing plan offers a flexible and convenient way to pay your insurance, allowing you to:

  • Spread the costs over equal monthly payments
  • Choose a withdrawal date that works for you
  • Pay the remaining balance at any time

10. Traffic

There are more cars on the road in Ontario and how much we drive has an impact on our car insurance. More cars on the road can result in more collisions and higher claims costs.

Traffic is also returning to pre-COVID-19 levels.

Talk to your Western Financial Group car insurance expert about incentives or discounts for installing anti-theft devices or other risk control measures in your car. Ask about possible discounts for snow tires.

Factors that can determine your Ontario car insurance premiums

  • Vehicle make, model, year and safety features
  • Your age and gender and marital status
  • Your driving and insurance history, which includes claims and convictions, and may include other factors such as whether or not you have taken driving training
  • How long you have had your licence
  • Where you live
  • How frequently you drive/how many kilometres per year
  • If your car is also used for business purposes
  • Your personal driving history and that of other household drivers who are listed on your auto insurance policy
  • Market conditions

Ontario drivers with recent driving convictions, a history of at-fault claims or limited experience generally represent a higher risk than drivers with clean driving records and more driving experience. Drivers deemed to be a higher risk typically pay more for their Ontario car insurance.