Where Things Stand With Car Insurance and COVID

One Year Later – a Look At Where Things Stand With Car Insurance and COVID

It’s hard to believe that it’s already been over a year since COVID-19 has dominated our lives. At the outset of the pandemic, we touched on how car insurance has been affected by this dramatic shift in our reality (check out this post).

We thought that it would be a good idea to take a look at where things stand now in Ontario one year later…

COVID and car insurance rates

We’ve touched on how COVID affected driving patterns (here and here) but essentially in a nutshell, we saw much less driving which translated to far fewer crashes. For example, in the GTA, the Ministry of Transportation of Ontario reported that traffic volume during peak commuter times was down 30% – 40% and collisions were down about 50% at the start of the pandemic. However, the Ontario Provincial Police reported that fatalities actually increased by 22% in serious crashes (source for all these stats: Canadian Underwriter).

As time has gone on, this trend towards less driving has remained steady, with many companies shifting to work at home models and climbing infection rates leading to more lock downs and restriction of activities.

So how does this impact car insurance rates?

Many were hoping that the drastic reduction of accidents would translate to cheaper rates, but with the increased severity of these crashes, it’s hard to say whether premiums will actually get lower and stay there. CAA has announced that they are indeed lowering their rates by 15% (click here for more details on that) and Aviva Canada has also announced a 20% discount (check out this resource from Canadian Underwriter for the full list of insurance companies offering pandemic relief ). For some, car insurance premiums have actually increased (click here to find out more about why car insurance rates went up during the pandemic), so time will tell if other insurers follow suit and offer cheaper premiums for drivers in Ontario.

Usage based insurance

A trend that has emerged from the pandemic is an uptick in usage based insurance or pay as you go. We’re seeing that people who are driving less during these times have switched over to usage based insurance to save money and pay only for how much they drive. CAA reported a 300% increase in their pay as you go product which targets low-mileage drivers (source: Canadian Underwriter). We can expect that this trend will translate to drivers in Ontario having more options for leveraging telematics, as more insurance companies jump on board the usage based model, especially since now in Ontario insurers are allowed to use telematics data to penalize bad drivers with higher rates (click here for more information on that).

If your driving situation has changed due to the pandemic, or if you have any questions at all about your car insurance coverage and what you can do to save money, please reach out to one of our insurance professionals. You can also click here to access our online car insurance quote system.

As case numbers continue to climb and our province buckles under the pressure of this 3rd wave, we hope that you are all keeping safe and well during these tremendously difficult times.