The excerpted article was written by Pete Evans · CBC News 

Despite highly publicized rebates from companies in the early days of the pandemic, rates for new car insurance policies have risen during COVID-19 and are set to increase even more soon, a new report suggests.

According to financial technology firm, the cost of car insurance climbed between April and June for most drivers in the market for a new policy in parts of the country where rates aren’t heavily regulated. That’s despite moves in March and April by a number of insurers to offer COVID rebates on bills, to reduce monthly premiums to people who were driving less because of lockdowns.

The Insurance Bureau of Canada (IBC) said in statement to CBC News that its members paid out more than $750 million worth of rebate cheques and reduced premiums in the first three months of the pandemic, a figure the group calls “real, tangible support for Canadians who are focused on supporting their families and businesses during this uncertain time.”

But even as many existing policy holders were getting rebate cheques or negotiating lower premiums in exchange for reduced coverage because they were driving less, drivers seeking new insurance policies were being quoted higher prices on the whole, according to

And rates are poised to keep rising because of conditions that predate the pandemic, the company says.

CBC has reported previously on the deluge of drivers who signed up for COVID discounts, only to discover they didn’t amount to much or came with all kinds of fine print.

Premiums have not been changing in the same way or by the same amount everywhere. Drivers in Alberta have seen their premiums skyrocket of late, but that’s mainly because of a situation that predates the pandemic. The previous, NDP government put a cap on the amount that insurers were allowed to raise rates by, but the current Conservative government removed that law last year, and rates have marched steadily higher ever since — up 24 per cent on average.

Justin Thouin, president of, said in an interview that the previous government’s policy of keeping insurance rates artificially low left insurers in “a place where they were losing money in many cases on drivers, so a number have left the market. Rates are going to continue to go up like this while there’s no competition. It’s going to be very difficult for Alberta drivers,” he said.

Regulatory changes aren’t the only thing to blame. Despite fewer people on the roads for a time, Thouin says there’s an uptick in accidents caused by distracted driving. And modern technology on cars is making them safer, but also more expensive to fix when they get into accidents.

Prices in Ontario have also risen, but not by as much. Ontarians pay some of the highest prices in Canada for insurance, but premiums had been trending lower for several quarters before rising by two percentage points during the quarter when COVID began.

Despite healthy competition, the insurance industry blames higher than normal incidences of insurance fraud for part of why rates are higher in Ontario.

Thouin said that despite rebates, COVID-19 may have helped cause the uptick in rates because large numbers of people gave up using public transit in favour of driving.

The IBC says one of the biggest questions facing the industry is how and when drivers’ commutes return to anything approaching normal.

“The biggest unknown at this point is whether when returning to the workplace … drivers will return to public transit, or if there will be an increase in driving,” the IBC said. “Despite the fact that Canada has recovered a majority of the jobs lost, public transit use remains very low. This could lead to increased driving, and higher claims.”

After a slight uptick in the first few months of COVID, Thouin says he expects rates are set to rise even more in Ontario because the current government is seemingly in no hurry to cap rates after removing caps put in place by the previous one.
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