Now, you may be wondering what influences insurance rates in the first place. In the last few years, auto insurance rates have increased for many Canadians for a few reasons. We call these reasons "cost drivers".
Here are just a few at a glance:
Cost Driver 1: Cars cost more to fix.
Newer cars are full of sensors, cameras and expensive technology. Repairs after a collision that looks like a minor fender-bender can cost big bucks. The increases in severity and frequency of severe weather events (hail, wind, water, etc.) have also had an impact on claims costs.
Cost Driver 2: Claims costs have skyrocketed.
In many parts of the country, claims costs have increased substantially. This is because more people with minor injury claims have been receiving settlements in amounts that are along the lines of what is received by those having far more serious injuries. This increases claims costs and premiums for everyone. In nearly every part of the country, on average, insurers have paid out more in claims, operating expenses and taxes than they've collected in premiums in recent years.
Cost Driver 3: Auto theft and insurance fraud are big problems.
There were over 85,000 vehicle thefts reported in Canada last year. (That's 1 theft every 6 minutes). And auto theft isn't just an insurance problem – it's a social menace that takes resources away from police, healthcare and court systems. Auto insurance fraud remains a multi-million dollar problem and is a main driver of insurance costs.
Cost Driver 4: Distracted driving is still not taboo.
Distracted driving, including using social media while behind the wheel, is a big problem. Driver inattention is the leading cause of collisions and contributes to apx. 80% of all collisions.
If have insurance questions, please call our Insurance Helpline 1-844-2ask-IBC. We're here to help.