Auto insurance premiums have skyrocketed in Ontario in the past few years. According to the Financial Services Commission of Ontario (FSCO), auto insurance premiums in the province increased by an average of 5.6 percent in 2008, 8.8 percent in 2009 and 6.2 percent in 2010. Since the reported rate changes are averages, your rate change may be higher or lower than average. As I reported here and here, the auto premiums for our household went up 22 percent in 2010 followed by another increase of 7.6 percent in 2011. Note that since most drivers renew their auto insurance annually, it may take up to a year for the rate changes approved by FSCO to take effect.

Our auto insurance renewal notice for 2012 arrived in the mail recently. The good news is that our auto insurance premium for the exact same coverage and driving record as last year is lower by 8 percent. I count myself lucky because Nordic Insurance Company, which is the underwriter of our policy increased rates by an average of 7 percent in 2011.

According to FSCO, auto insurance premiums went up by an average of 5 percent in 2011, a lower increase than previous years. It appears that new regulations capping accident benefits implemented by the Ontario Government in September 2010 are taking effect. The bad news is that you may still be hit with a hefty increase. Some insurance companies have received approvals for rate hikes of as much as 13 percent. If you are among the unlucky ones, be sure to shop around, review your insurance coverage, consider increasing the deductible and make sure you are getting all the discounts you are eligible for.

This article has 10 comments

  1. My mail did not make me happy last week… My TD Insurance premiums unfortunately went up (not a single accident or ticket during 2011). It’s probably time to shop around again…

  2. You’re probably receiving a reduction at least in part because you live in Ottawa. IMHO, something radical needs to be done to cut down on the wave of fraudulent intentional collisions in Toronto and Brampton.

    • @Alex: I’m going to shop around anyway. The problem is, it takes at least 1/2 hour to get the quotes, so I’ll probably just try a couple of insurance companies.

      @Viscount: I agree. I also think the Government should adjust the profit assumptions downwards. IIRC, regulation still allows insurance companies to earn something like 12%, rates that were set when the interest rates on bonds were much higher than now.

  3. It’s a sad commentary on car insurance costs when a 5% increase feels like good news, but you’re right that it does feel like good news. Let’s celebrate — car insurance costs only went up a little more than inflation.

  4. Thanks for sharing. I need to shop more this year for rates.

  5. @Michael: It’s interesting that auto insurance premiums are so volatile. Our rate changes for the past 3 years are: 22%, 8% and -8%. I wonder why the rates bounces around so much when there is no change in the driving record or coverage.

    @Mark: I’m going to try Johnson Insurance again this year. Last year, their quote came in substantially less than Belair Direct but I could never reach the agent for some reason.

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  7. You could always sell your car and cancel your insurance. Do the math, it is probably the best deal

  8. My accidents benefits last year increased 20% (from $261 to $313). Today my renewal came with a 66% increase on accident benefits – now $520. I have had a clean record for 30 years. This is on a 16 year old Neon. You’re not kidding it’s time to shop around.

  9. I will be happy to provide you with a free no obligation quote for your home and auto insurance needs. Our rates are very competitive.
    Let’s see if we can save you some money!!!