Call Now : 1-855-237-2905
or click below for quote
FacebooktwitterlinkedinyoutubeFacebooktwitterlinkedinyoutube

An Update on Auto Insurance Rates in Ontario and Where We Can Expect Things to Go

Updated April 21, 2022

Our last update on auto insurance rates in Ontario (see the post from August 2021) saw a welcome downward trend in the costs of insuring a vehicle, especially in our province. Let’s take a look at where things stand now at the start of 2022 and where we can expect them to go as the year unfolds…

Some communities in Ontario hit hard with increases

As we mentioned, the pandemic has resulted in some decreases in auto insurance premiums.

However, this was not the case across the board and in looking at rates in our province, we can see that in some towns, they experienced increases, not the decreases enjoyed in other part of Ontario. Some of the towns hardest hit include Oshawa, Nobleton and Schomberg – they experienced double digit increases in their auto insurance rates. Other cities that saw increases (though not as dramatic) include Napanee, Trenton, PIcton and Belleville. (Click here to see the full data from Canadian Underwriter).

Many of these town, while they saw increases, still pay lower premiums that the average cost of auto insurance in Ontario (which currently sits at $1,555 – source: Canadian Underwriter). However, this shift in rates is dramatic.

Looking to the pandemic for an explanation

So what is the explanation for this rise? Again, we can look to the pandemic as a possible explanation for this trend.

Firstly, we know that with the pandemic we saw more and more people leaving large cities centres and moving to smaller towns (as we talked about in this post). More people living in these small towns could potentially explain the rise in rates.

Another source of speculation is that these smaller towns did not see the massive shift in driving habits as did, say Toronto. Less commuting to the city and less cars on the road played a major role in shifting auto insurance rates in the GTA and other large centres as more and more people worked from home (as we talked about in this post).

Where is the priciest auto insurance in Ontario?

While the cities we talked about above already enjoy cheaper auto insurance rates, despite the increases they are experiencing, let’s take a quick look at which parts of our province have the most expensive auto insurance rates.

In 2021, we have a new leader in rates – Vaughan replaced Brampton as the most expensive city in Ontario to insure a vehicle.

Rounding out the top 5? Ajax came in at number 2, Richmond Hill at number 3, Brampton dropped into number 4 and finally Mississauga finished at number 5 (Source: Canadian Underwriter).

Rising costs, inflation and supply chain issues

With inflation on the rise, consumers can expect to see the effect on their auto insurance rates the next time they go to renew. One factor that insurers take into account when they are setting their rates is to look at the cost to process claims. Inflation means that these costs will be going up, which then gets passed on to drivers.

Not only are we looking at inflation affecting costs to repair cars, we’re also facing other issues such as labour shortages and supply chain issues that are driving up the costs of parts. Parts can be hard to find and when they are available, they simply are more expensive.

What does the future hold?

As we look ahead, with things opening up and our province setting the path for a return to “normal,” if we see that driving habits return to what they were before the pandemic, we can expect to see rates going back up to pre-pandemic levels. More traffic on the road means more accidents, more aggressive driving and more potentials for auto insurance claims. Many of the factors that lead to cheaper auto insurance rates, such as more people working from home, insurance providers offering COVID relief discounts and fewer new drivers with the backlog in testing and issuing new licences, will likely no longer play a role in the realm of auto insurance pricing. Only time will tell…

Stay tuned for our next post where we will take a look at where things stand with home insurance rates in Ontario.

Resources referenced for this post:

From the Canadian Underwriter:

Have any questions about auto insurance rates in your part of Ontario? Want to learn how you can get the best rates? Get in touch with someone from our team today! Or click here to get an online auto insurance quote in minutes!

car insurance Ontario Click for an auto insurance quote or give us a call at 1-855-237-2905

FacebooktwitterlinkedinFacebooktwitterlinkedin

Copyright © Insurance Buddy™., 2022. All Rights Reserved