Ontario Insurance Rates
Let’s dive into what determines Ontario Insurance Rates! Every insurance company in Ontario will have a list of criteria individuals must meet in order to calculate an auto insurance rate. No two companies are the same making it difficult to know exactly why a premium may be high or low. Ultimately Ontario insurance rates must be approved by FSCO before being used.
FSCO, or the Financial Services Commission of Ontario, set the rules by which insurance and financial companies must adhere to when it comes to Ontario insurance rates (auto insurance). If an insurance company wishes to change their rates, by increase or decrease, they must have approval from FSCO first. Not every insurance company will apply for a change annually but the market is consistently changing meaning insurance companies have to adapt accordingly.
What factors contribute towards insurance rates?
Firstly, an insurer must submit their proposed rate calculations to FSCO, including supporting information to back up their proposal. This information is then reviewed by FSCO alongside other factors such as current claims costs, market conditions and the resulting impact that these factors have on the sufficiency of an insurance company’s current rates. An insurance company can then be approved or advised to amend their proposal.
Postal codes and their resulting impact on Ontario insurance rates are also a big factor and a hot topic of discussion right now. Some are calling it discriminatory while others defend the use of a postal code as a rate factor. The reason behind it is simple – living in a densely urban populated area, such as Brampton or Toronto, will mean an increased claims risk volume for an insurance company. If an insured resides in an area that is more rural, the risk of a claim is significantly lower, therefore the rate can reflect that.
Driving records also play a big role in rate factors in Ontario. If you have a clean record, your rate should reflect that, likewise if you have a more uneven record.
Where do the premiums go?
Primarily, your premium contributes towards the cost of ever-increasing claims especially when a person is injured. Did you know injured persons can claim Accident Benefits regardless of fault? Two other factors that have recently caused an increase in insurance rates in Ontario are distracted driving incidents alongside higher claims cost for repairing technologically advanced vehicles. The third quarter of 2018 saw many insurance companies in Ontario request an average rate increase of 2% while some companies increased their rate by up to 11.6%. More information on rates can be found on the FSCO website.
There are always other options
Everyone in Ontario will experience a rise in their auto or home insurance rates at some point, but the good news is there are many insurance providers in Ontario that can provide a competitive solution. No brokerage in Ontario will have a contract to write with every single insurance company so you may find you have to go on a quoting spree to find the best solution to meet your needs. Websites like Myhunter.ca can also help make the search easier.
If you find yourself looking for better insurance rates in Ontario and are interested in speaking with one of our licensed insurance brokers please give us a call today at 1-877-454-4476 or submit a quote request through our quote page. Whether it’s for your auto, home, commercial business or farm, we have the markets to suit your needs.
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