Why did auto insurance coverage charges go up in some Ontario communities?

Whereas auto insurance coverage premiums throughout Ontario dropped a mean of three.8% final yr from 2020, sure areas noticed single- or double-digit will increase, in accordance with a latest report from charge aggregator Ratesdotca.

The cities of Nobleton, Schomberg, Orangeville and King Metropolis, which tied for 10th place within the high ten costliest cities within the province, noticed will increase of 14.2% year-over-year. Oshawa noticed a 12.1% enhance.

Different cities, specifically Napanee, Trenton, Port Hope, Cobourg, Belleville and Picton, noticed common will increase of 6.5% from 2020 to 2021, knowledge from Ratesdotca’s Auto Insuramap present. However these cities additionally pay practically $400 much less per yr that the 2021 Ontario auto common of $1,555 at $1,175 (together with the village of Kendal, which noticed its premiums drop 7.6% year-over-year).

So, whereas they rounded out the underside of the provincial rating, why did these communities (apart from the village of Kendal) see charge will increase? It could possibly be correlated to the migration of metropolis dwellers to the nation, says Ratesdotca insurance coverage professional and chartered insurance coverage skilled Tanisha Kishan.

“Due to distant work, individuals began transferring a bit farther out and the variety of automobiles on the highway might have elevated barely,” she says, including that extra knowledge is required to have the ability to conclude that positively. Extra seemingly, drivers in these communities maintained comparable commutes.

It’s additionally attainable that driving habits in sure areas weren’t as closely impacted by the pandemic as they have been within the Higher Toronto Space, Kishan says in an interview. Toronto drivers noticed vital decreases, as did suburban drivers who commute to town for work. The typical annual premium for Toronto together with its suburbs was $1,952 in 2021, 11.3% decrease than the 2020 premium of $2,200.


Canadian Underwriter additionally requested if there have been different attainable explanations aside from postal code as to why locations like Nobleton, Schomberg, Orangeville and King Metropolis and Oshawa noticed double-digit charge will increase.

“Throughout the pandemic, many individuals moved from city areas to rural areas. The ensuing enhance in inhabitants in some areas correlates to larger site visitors density and will doubtlessly drive up charges,” Kishan says. “As communities develop, it isn’t uncommon to see charge fluctuations.”

She notes that other than postal codes, many different components decide auto insurance coverage charges, together with:

  • Particular person traits corresponding to age and gender;
  • Car traits corresponding to yr, make and mannequin;
  • Car utilization (enterprise versus pleasure);
  • Annual kilometres pushed;
  • Years a driver has been licensed and insurance coverage historical past;and
  • Loss historical past, together with prior claims and tickets.

Ratesdotca’s report additionally discovered Vaughan was the most costly Ontario metropolis for auto insurance coverage in 2021, with estimated annual insurance coverage premiums of $2,179. Brampton, the previous title holder, is now in fourth place averaging $1,976 a yr, practically 27% cheaper year-over-year. In close by Toronto, the typical annual premium for town and its suburbs was $1,952 in 2021, 11.3% decrease than in 2020.

Ratedotca’s estimates are based mostly on a 35-year-old driver of a 2018 Honda Civic with a clear driving file.

However perspective is all the things in terms of swings such because the 12.1% in Oshawa and 14.2% in different Ontario cities.

“On the floor, these swings in quotes seem vital, however we should keep in mind there’s a stark distinction between ‘quotes generated’ and ‘premiums paid’,” an Insurance coverage Bureau of Canada spokesperson says. “If there are a couple of outlier quotes constructed into the evaluation, they may actually skew the averages and make it seem charges are considerably larger or decrease. The typical of a number of quotes doesn’t essentially mirror the precise premiums paid – drivers usually choose the most-affordable quote, not the typical.”

Utilized’s Score Index discovered that common for premiums paid for auto insurance coverage in Ontario decreased by 4.5% in Q3 2021 in comparison with Q3 2020.

It’s laborious to foretell how auto insurance coverage charges will pattern sooner or later. If driving habits and patterns return to what was seen pre-pandemic, it’s seemingly that charges will begin to enhance once more, Kishan suggests.


Function picture by iStock.com/jimfeng

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