Auto Insurance Rates Rise in Ontario, Alberta and Atlantic Canada

Today, LowestRates.ca, an online recommendation site for personal finance products like insurance, mortgages, loans and credit cards, released its Q3 2018 Auto Insurance Price Index, which uses proprietary data to track the average cost of car insurance in Canada on a quarterly basis.

The report found that the price of auto insurance has been trending upward in all three markets surveyed, with increases of 3.57% in Ontario, 0.24% in Alberta and 1.79% in Atlantic Canada versus the prior quarter. When compared with this time last year, Ontario saw the steepest rate increase at 10.71% and Alberta saw an annual increase of 6.70%. Annual data for Atlantic Canada is not yet available.

Breakdown by sex:

Ontario

  • Men are paying 9.67% more than in Q3 2017
  • Women are paying 12.21% more than in Q3 2017

Alberta

  • Men are paying 7.36% more than in Q3 2017
  • Women are paying 5.56% more than in Q3 2017

Atlantic Canada

  • Men are paying 1.97% more than in Q2 2018
  • Women are paying 1.39% more than in Q2 2018

As auto insurance rates continue to rise, Canada has also become the first G20 country to legalize recreational cannabis. LowestRates.ca found that a staggering 91% of Canadians do not know how the legalization of cannabis will affect their ratesMillennials (94%) are the least certain of the potential impact. A study released in October by the Insurance Institute for Highway Safety gives some insight into what could happen: it found that U.S. states that legalized cannabis have accident rates that are 5.2% higher than neighbouring states. If legalization leads to an increase in impaired driving and more accidents, it’s likely that rates will see an increase in Canada, as well.

“It’s a time of unknowns in the Canadian insurance industry,” said Justin Thouin, co-founder and CEO of LowestRates.ca. “The potential effects of cannabis legalization have shown Canadians the importance of educating themselves on not just insurance, but personal finance as a whole. That’s exactly what the Auto Insurance Price Index aims to do—give Canadians another tool that can equip them with the information they need in order to make smarter financial decisions.”

How does the Auto Insurance Price Index Report work?

The index works by looking at the lowest auto insurance rates available on LowestRates.ca each quarter, getting an average and then comparing it to past quarters. A benchmark quarter, in this case Q1 2018, is used to create a baseline (a reading of 100) for the index. Each point on the index above or below 100 represents a roughly 1% change in prices. For instance, a 105 index reading would mean the price has increased by 5% since Q1 2018.

Each market has seen the following increases on LowestRates.ca’s Auto Insurance Price Index:

  • Ontario increased from 100 on the index at the end of Q1 2018 to 107 at the end of Q3 2018
  • Alberta increased from 100 on the index at the end of Q1 2018 to 103 at the end of Q3 2018
  • Atlantic Canada increased from 100 on the index at the end of Q1 2018 to 103 at the end of Q3 2018

This index also shows the value of comparing auto insurance. While the average quoted price on LowestRates.ca rose 0.67% in the second quarter, that was less than the amount insurers were approved to raise rates. The Financial Services Commission of Ontario, which regulates auto insurance in the province, approved insurance providers for an average 2.06% rate increase in Q3.

Why do rates increase?

Insurance rate increases are directly related to costs incurred by providers. For instance, if the number of claims rises in a given quarter for one insurer, they’ll increase their premiums, even if other insurers lower their own prices. There are several trends right now that may contribute to these increases, including a higher number of distracted driving accidents, the rising cost of new vehicle repairs, and fraud. The LowestRates.ca Auto Insurance Price Index tracks the percentage change in the average car insurance quote received by individual drivers insuring only one vehicle in either OntarioAlberta or Atlantic Canada.

About LowestRates.ca

LowestRates.ca is an online rate comparison site for insurance, mortgages, loans and credit card rates in Canada. The free, independent service connects directly with financial institutions and providers from all over North America to offer Canadians a comprehensive list of rates. LowestRates.ca wants to help everyone become more financially literate, with a goal of saving Canadians $1 billion in interest and fees.

SOURCE LowestRates.ca

Don’t let Halloween become a nightmare – Drive Smart tips from ICBC

Halloween is meant to be a fun celebration, but it can also be risky if parents, children and drivers don’t take precautions. Last Halloween, there were 950 crashes, resulting in 280 injuries in B.C.*

With Halloween celebrations starting this weekend, here are ICBC’s tips to help keep ghosts and goblins of all ages safe:

Drive Smart tips

  • Stay well below the speed limit: Drive well below the speed limit in residential areas, especially between 5:00 p.m. to 9:00 p.m., the peak period for trick-or-treating. A car going 30 km/hr needs about travels 18 metres – the length of four cars – in order to come to a complete stop. Driving at a lower speed will give you more time to stop in case a child runs across the street unexpectedly.

  • Scan as you drive: Children may be walking in unexpected places like driveways, alleys and parking lots. Drive slowly and be prepared to stop at a moment’s notice.

  • Don’t roll through stop signs or intersections: Come to a full stop at all intersections take the time to scan crosswalk and street corners. Small children can be difficult to see, especially when wearing a dark costume.

  • Do not pass a slow or stopped vehicle: Have patience on Halloween night. Many drivers will be driving slowly to watch out for trick-or-treaters. If a car is slowing down or stopped in front of you, don’t try to pass the car. They may be stopping to let children cross the road, or stopping for something else you cannot see.

Tips to keep kids safe

  • Make sure the costume fits: A costume that’s too big or small could cause a child to trip and fall, causing injury.

  • Be bright to be seen: Many costumes are quite dark, making your child less visible at night. Try to nudge your child toward a lighter costume. Add reflective tape to their outfit and treat bag, and get them to use a flashlight or headlamp to help them stand out in the dark.

  • Create a safe route: If your kids are trick-or-treating without you, plan a safe route for your children and their friends. The best route should be familiar, well-established, direct and away from busy main roads. Establish a return time.

  • Travel in groups: Organize a group to trick-or-treat together. Walking in a group will make you and your children more visible to drivers.

  • Follow the rules of the road: Always walk on sidewalks and cross only at crosswalks when travelling with your child. If there is no sidewalk, walk as far to the edge as possible, facing traffic. For older children that are trick-or-treating with friends, review the rules and remind them to work their way up one side of the street, instead of crossing back and forth.

  • Consider other ways to celebrate: Instead of traditional trick-or-treating, consider hosting a Halloween party for your child and their friends, attending a Halloween party if offered at local community centres, or taking your child to a local shopping centre that offers trick-or-treating opportunities in a well-lit, controlled environment.

Tips for adults to celebrate safely

  • Plan for a safe ride home: If your Halloween celebrations involve alcohol, make a plan before you head out. Arrange for a designated driver or use other options to get home safely—call a taxi, take transit or call a sober friend.

  • Light fireworks safely: In areas that allow the purchase of fireworks, light your fireworks in a clear, open and safe space. Lighting fireworks on the road is not safe for you or drivers.

Regional statistics*

  • In 2017, there were 600 crashes and 200 injured on Halloween in the Lower Mainland.

  • In 2017, there were 140 crashes and 27 injured on Halloween on Vancouver Island.

  • In 2017, there were 120 crashes and 30 injured on Halloween in the Southern Interior.

  • In 2017, there were 66 crashes and 13 injured on Halloween in the North Central region.

*Crashes and injuries are from ICBC 2017 data for the 24-hour period on October 31.

Insurance cap no solution, says Newfoundland consumer advocate

 

Dennis Browne says in PUB submission that increased deductible a better way to tackle issue

The province’s consumer advocate says he is against a cap being imposed on compensation for minor injuries sustained in automobile accidents in the province because he believes there will be very little change to insurance rates for consumers, and it will impede victims’ rights to access the court system.

He is, however, suggesting an increased deductible.

Dennis Browne, in his submission to the Public Utilities Board (PUB) in relation to the PUB’s review into automobile insurance in Newfoundland and Labrador, said that after considering all the evidence presented during the PUB’s hearings, it is difficult to conclude that the introduction of a cap would be an improvement or translate into long-term, stable rates for consumers.

“A cap in other jurisdictions has resulted in litigation to determine if a claimant falls within the legislative definition of ‘minor injury’ which would be subject to the cap,” the submission states.

“This could prove an expensive proposition for consumers. Currently our courts determine the value of claims, rather than pre-determined legislative definitions. Consumers should maintain their right to access the court system unencumbered. The imposition of caps will impact adversely on consumers generally.”

The PUB was asked by the provincial government to review and report on a number of issues with respect to automobile insurance in the province, including the reasons behind increasing claims costs for private passenger vehicles and taxi operators, and options to reduce the costs.

The PUB was specifically asked to examine the impact on rates and implications for claimants of introducing a monetary cap on claims for non-economic loss for minor/mild injuries or continuing with the current deductible of $2,500, or increasing the deductible.

“On balance after considering all of the evidence, it is in the best interests of consumers at this juncture to continue with a deductible regime, but one which will ensure reduced and sustainable premiums.”
Consumer Advocate Dennis Browne

The Insurance Bureau of Canada (IBC), the national trade association that represents 90 per cent of Canada’s property and casualty insurers, has stated that insurers in Newfoundland and Labrador are losing money because claims costs are escalating.

Reforms the IBC are proposing to help stabilize the auto insurance industry in the province include replacing the existing $2,500 deductible with a $5,000 compensation cap on minor injuries.

Browne notes in his submission there is varying evidence concerning the profitability of the insurance industry in this province and its long-term sustainability.

“On balance after considering all of the evidence, it is in the best interests of consumers at this juncture to continue with a deductible regime, but one which will ensure reduced and sustainable premiums,” Browne suggests. “A change to the legislation … with an increase in the deductible of up to $10,000 is therefore recommended.

“This substantial deductible would be more difficult to disregard and could serve to balance the interests of insurers and consumers, provided that the insurers are committed to premium reduction and long-term premium stability.

“There is evidence a deductible of $7,500, could result in premium savings of $45. A deductible of $10,000, could result in premium savings of $65. These savings are not impressive. The industry must offer better. Furthermore, the deductible may be optional. For those consumers who do not want to opt into the legislated deductible, the industry can offer the purchase of an appropriate policy.”

Other recommendations

Browne’s submission also discusses and makes recommendations on a number of other areas covered by the PUB’s review.

They include: the causes of poor claims experience for taxi drivers and operators — including details regarding the underlying causes of loss and high claim costs incurred; the problem of uninsured drivers; highway safety and accident prevention; law enforcement efforts; and education and awareness.

“In this submission rate design and caps on compensation and the focus on reducing the frequency and severity of accidents have been examined,” Browne noted.

“Our roads can be safer. This can be achieved by more robust enforcement and co-ordination of key players. The taxi experience in this province can be improved by instituting driver monitoring, enforcement of Service NL taxi-related measures taken in 2018, and by having Facility Association re-examine their rating approach. Insurers have a role to play by implementing various methods of vehicle data monitoring for taxis and private passenger vehicles.

“This submission deals with the insurance product, and that it may be improved by increasing the existing deductible for injury claims, making accident benefits mandatory with enhanced medical and rehabilitation benefits, the establishment of pre-approved evidence-based treatment protocols and instituting direct compensation for property damage.”

Brown also stated that the high number of uninsured drivers on the roads can be reduced by assigning licence plates to individuals, and creating a mechanism for better communication/notification as between insurers and the Motor Vehicle Registry.

The PUB’s final report to the provincial government is expected sometime this fall.

IBC reviewing private member’s bill on auto insurance pricing

Insurance Bureau of Canada (IBC) is currently reviewing the private member’s Bill 42, introduced this afternoon by MPP Parm Gill, that looks at eliminating postal code as one factor used in determining risk for auto insurance premiums.

Under the current regulations, auto insurance premiums are based on claims data, including the frequency and cost of collisions. The current regulations are outdated and don’t reflect the realities of today’s drivers.

Ontario’s drivers look forward to an improved regulatory environment. Ontario auto insurers are actively seeking modernized regulation that enables them to meet the needs of Ontario drivers. We are committed to working with government to fix auto insurance in this province,” said Kim Donaldson, Vice-President, Ontario, IBC.

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 126,000 Canadians, pays $9 billion in taxes and has a total premium base of $54.7 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

If you require more information, IBC spokespeople are available to discuss the details in this media release.

SOURCE Insurance Bureau of Canada

Private member’s bills aim to end auto insurance postal code ‘discrimination’

By Shawn Jeffords

THE CANADIAN PRESS

TORONTO _ Two Ontario legislators from different parties introduced separate bills on Monday aimed at stopping auto insurance companies from charging drivers higher premiums based on where they live, saying it was time for the practice to end.

The politicians _ one from the ruling Progressive Conservatives and another from the Opposition NDP _ said they want the Financial Services Commission of Ontario, which regulates insurers, to stop the practice they call discriminatory.

Parm Gill, a Tory legislator from Milton, Ont., introduced a private member’s bill on the matter, saying drivers from the communities around Toronto pay higher auto insurance rates than those living in other areas of the province.

“Ontario’s auto insurance rates are amongst the highest in Canada despite having some of the lowest levels of accidents and fatalities,” he said.  “Our government is committed to ensuring fairness in rate setting and ending discriminatory practices.”

Gill said his bill would ensure drivers are evaluated based on their driving record and not where they live.

“This bill, if passed, will promote personal responsibility,” he said.  “A good driver in my riding of Milton should pay the same rates as a good driver anywhere else.”

NDP legislator Gurratan Singh introduced a similar bill on Monday and said his legislation, if passed, would require the Financial Services Commission of Ontario to refuse approval for risk classification systems that don’t consider the Greater Toronto Area as a single geographic region.

“Drivers in the Peel region and other parts of the GTA continue to arbitrarily pay significantly higher auto insurance rates than any where else in the province,” he said.

Singh said drivers in his riding in Brampton pay on average $1,000 a year more in auto insurance premiums each year than a driver in north Toronto. His bill would result in lower insurance rates for GTA drivers, he said.

“It will make sure that insurance companies are not allowed to gouge people simply based on the neighbourhood they live in or the municipality that they live in,” he said.

Singh wouldn’t say if he will work with Gill to meld their bills into one.

On Friday, the Financial Services Commission of Ontario announced insurance rate increases for the third quarter of 2018, approving a 2.06 per cent increase. In the second quarter of 2018 the commission approved a 1.11 per cent increase.

Finance Minister Vic Fedeli wouldn’t say if the government will support the Gill’s legislation, committing only to review it once it is tabled.

Fedeli’s spokesman said the government is looking at the regulatory environment surrounding the province’s auto insurance sector, with the potential of allowing more competition in the marketplace.

“Our government is committed to ensuring fairness in rate setting, ending discriminatory practices and working towards a system that puts drivers first,” Robert Gibson said in a statement.

Pete Karageorgos, director of Consumer and Industry Relations at the Insurance Bureau of Canada, said insurers would welcome modernization of the sector regulations and acknowledged that some of them are “stale.”

He noted that the Financial Services Commission of Ontario sets out how insurance rates are set, including various rating factors used to set premiums.

“They are the ones that set those rules in place in terms of using things like a person’s driving record, the type of car they drive, even where they live,” he said. “Geography is something that’s used and it’s used not just here in Ontario but in every insurance market across the country.”

IBC: Calling bull on ICBC

Prince George Citizen

In its recent editorial, ICBC is defending its new $50 fee for unlisted driver protection by arguing that this is “common practice across North America and beyond” and that “in many other jurisdictions, insurers will likely not cover your claim if an unlisted driver crashes your vehicle.”

Unfortunately, ICBC’s justification simply does not hold water. As the association representing Canada’s private insurance companies, we are compelled to inform that this is not common practice in other auto insurance markets across Canada or in the United States.

While auto insurers often request drivers to list other family members living in their homes who may use their vehicles, listing all incidental drivers like friends, neighbours, and co-workers is not. Nor is denying claims if an unlisted driver causes an accident.

Many of the upcoming ICBC changes that are designed to price auto insurance based on driver risk and to make accidents follow driver records – as opposed to their vehicles – are an effective way to incent better behavior on our roads, and mirror the way auto insurance is priced in other provinces. ICBC’s new unlisted driver protection fee does not.

With British Columbians paying more for auto insurance than anyone else in Canada, this is just the latest example of why B.C. drivers deserve choice and the freedom to shop around for their auto insurance needs. If ICBC were open to competition and drivers didn’t want to purchase “unlisted driver protection” they wouldn’t have to – they could take their business elsewhere.

Aaron Sutherland

Vice-President, Pacific Region

Insurance Bureau of Canada

 

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