Insurance rates are on the rise

By CRM staff

Toronto, Ontario – April 25, 2019 – While there are a number of reasons why insurance rates can increase, LowestRates.ca, says the increase that Alberta and Ontario drivers are seeing could be a result of insurers pulling out of the business.

In the Q1 report conducted by LowestRates.ca, Alberta has experienced the largest increase of 11.22 percent, while Ontario has been experiencing a 9.06 percent increase.

“Auto insurance rates have been on the rise for more than a year now, and this happens for a number of reasons that are typically outside of the average driver’s control—more instances of fraud and a greater number of accidents, for example,” said co-founder and CEO of LowestRates.ca Justin Thouin. “While overall rate increases won’t affect every driver, if you are affected, this is a great opportunity to shop around for more competitive insurance plans. Most drivers could save quite a bit on their auto insurance if they spent more time comparing rates.”

According to the comparative insurance site, insurers they have spoken to say, they have been paying out more in claims than they were taking in from premiums. As a result, some insurers have had to pull out from the business. In the past year, Esurance and AIG Insurance have departed from Canada.

A few weeks ago, the Ontario government announced plans to introduce new insurance policies, which was praised by Thouin.

The new initiative, called the Putting Drivers First plan, was outlined in the Legislature by Tory Finance Minister Vic Fedeli as part of the Spring Budget. 
 
It aims to reduce premium costs by providing drivers with more options and reducing the amount insurers spend on claims processes. According to the Ford Government, drivers will soon be able to treat auto insurance like a buffet, allowing drivers to pick and choose the coverage that works best for them, though it is unclear what options will become optional. 
 
While the details may be unclear, Thouin believes that the policy has great potential.
 
“The best insurance is bespoke insurance. The more rates can be tailored to individuals and their driving behaviours, and not based on postal codes, the better,” Thouin said. “The bottom line is that Ontario’s drivers pay the second highest rates in the country because the auto insurance industry is simply inefficient. We need more insurance companies to push premiums down. With more competition, innovation and efficiency are rewarded.”
 
Another part of the bill which Thouin is particularly impressed by is the proposed Driver Care Card. The new tool, which may be a chip-and-pin card, is expected to simplify the claims process, with insurers loading it with the funds earmarked for repairs or other accident-related expenses.
 
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