Toronto, Ontario — The insurance experts at Ratehub.ca published their predictions for 2023 in late December, with results showing little reprieve on the way for an already strained insurer-repairer ecosystem, as inflated repair costs have trickled downward to increased premiums for customers.
Statistics Canada’s October Consumer Price Index report for passenger vehicle insurance premiums shows that drivers are paying an average of 3.9 percent more on auto insurance annually, and according to Ratehub’s analysis, that figure isn’t likely to improve any time this year.
These increased costs have found their way into the repair sector as well, as the report noted that passenger vehicle parts, maintenance and repairs have also risen in cost by 7.4 percent annually.
Ratehub’s senior director of insurance, Matt Hands spoke to the effect these costs have on both the customer and the repair provider.
“Three or four years ago, repairs would be done in a week or two. Now they’re probably taking three or four weeks—maybe even longer,” said Hands.
“That’s going to cost insurance companies more because they’re paying for rental cars longer which would contribute to the rising cost of claims.”
The report also touched on how increasingly complex high-end vehicles—specifically those equipped with many cameras and sensors—have become substantially more expensive to repair or replace due to supply shortages of their more specialized equipment and materials.
Ratehub Insurance’s director of sales, Morgan Roberts commented on a similar reality in the electric vehicle sector.
“Electric vehicles can cost more to insure due to the cost to repair them. For example, they may require more specialized services to repair,” said Roberts.
Ratehub.ca’s full 2023 insurance predictions report can be found here.
