Vehicle insurance premiums are expected to keep climbing this year, with auto theft driving and steady inflation fueling the rise, according to a new report by Ratesdotca. So, what are the main factors causing insurance costs to rise in 2024?

1. Rampant Inflation

Inflation is partly to blame for the rising rates. “With interest rates going up, with inflation getting higher, the average claim payout is a lot higher,” said Daniel Ivans of Ratesdotca. “With an increase in the cost of claims, obviously there’s a need for more money to fund those claims down the road.”

Experts predict inflation could begin to slow down at some point soon, but it certainly hasn’t happened yet. For now, Canadians are really feeling the burn as inflation continues unabated.

2. Servicing Costs

Inflation isn’t the only factor causing insurance costs to rise in 2024. The cost of servicing and replacing vehicle parts has gone up as technology itself has advanced, according to Ratesdotca’s report, which notes supply chain disruptions have also led some companies to pause production.

3. Auto Theft

One of the biggest factors causing insurance costs to rise in 2024 is auto theft. Canadian insurers paid out over a billion dollars in claims for the first time two years ago, according to the Insurance Bureau of Canada (IBC). Auto theft claims in the Greater Toronto Area alone accounted for a whopping 50% of that amount.

More than 80,000 cars were stolen in Canada last year, which is a staggering number. Provincewide, claims for stolen vehicles rose a mindboggling 329% between 2018 and 2022, from $160 million to $700 million. The Insurance Bureau of Canada estimates car thefts cost every individual Ontario driver about $130 a year.

The provincial and federal governments are trying hard to crack down on auto thefts, but these efforts won’t positively affect our insurance premiums anytime soon.

So, what can we do?

Ontario drivers should reach out to their broker for advice right away to see what discounts might be available at the moment. For example, some companies now add a $500 surcharge for cars listed as a commonly stolen vehicle, but some companies will waive that if the customer installs an anti-theft device in their vehicle.

Insuring multiple vehicles under one company, bundling different types of insurance, and agreeing to use apps that track driver performance and reward safe driving habits could save anywhere from 10% to 30% on your insurance premium.

We recommend contacting a licensed broker at My Hunter to learn more. You can call us at 1-877-454-4476 to speak to a team member, or reach out to us via our website. We hope you’ve enjoyed the latest addition to our Blog page, Insurance Costs to Rise in 2024. See you next time!

By Dan McDonald, Marketing Coordinator