Have you noticed a recent and unexpected spike in your car insurance premium? You’re not the only one. For years, Canadians have been increasingly frustrated at the rise of auto insurance rates, particularly because they are unexpected and seemingly unwarranted. Particularly prevalent in Ontario, auto insurance spikes have become increasingly common. Factors such as insurance fraud and distracted driving have been causing major hikes in auto insurance rates. Ontarians seem to be taking the hit the most, paying a whopping 55% higher car insurance rate than the Canadian average, according to a 2017 study by insurance researcher, David Marshall.
The Main Culprit: Insurance Fraud
Fraud in the auto insurance space has been cited as the number one cause for the surge in insurance premiums. According to Insurance Bureau of Canada (IBC) report in 2017, auto insurance fraud has cost Ontario about $1.6 billion per year. From staged car accidents to fraudulent car repairs and dishonest claims, auto insurance fraud is growing rapidly and Ontarians have been paying the price; In 2018, 18% of our insurance premiums were used to cover these fraudulent insurance claims.
When a claim gets filed, there are numerous players that are involved; private health care clinics, lawyers and medical specialists. Auto insurance fraud goes beyond intentional car damage or fake car accidents. Health care clinics overcharge insurance companies or even bill insurance companies for treatments that never occurred. Insurance fraud has been truly impacting the insurance industry, costing insurance companies billions. The end result? Insurers are put under intense financial strain and have no option but to increase premiums.
Ford’s Auto Insurance Reforms
In April, Ford released a “Putting Drivers First” program, aiming to transform Ontario’s current auto insurance landscape and offer better access and a wide array of coverage options for Ontarians. This means that insurers can offer drivers more customizable plans and even discounts that will reduce their insurance premiums. For instance, the reform will allow insurance companies to evaluate a driver’s credit to offer lower insurance rates. Ultimately, this reform will increase competition in the insurance sector, leading to lower insurance premiums for Ontarians.
What You Can Do
While Ford’s reform is a much-needed change to Ontario’s current auto insurance landscape, there are methods you can implement today that will help reduce your car insurance premiums. Consider investing in anti-theft devices for your car, or bundling your home and auto insurance. Insurance companies offer telematic programs, which can track your driving behaviour and mileage. If you are frustrated about your current auto insurance rate, we are always happy to help you find a premium that doesn’t break the bank. Contact us today!