Why did my premium increase?

You’re a good driver. You haven’t had any accidents. And yet, your insurance premium is going up. Why? 

Claims have gone up, as has the cost of auto repairs, over the past several years, while the average premium in auto insurance has changed little.  With more claim payouts and higher auto repair costs, the insurance premiums used to pay losses must be adjusted. This is what’s happening at the moment on the auto insurance market.

Did you know? When you’ve been in a road accident and make a claim, your insurer uses the premiums paid by all of its customers to compensate you. 

Auto repair costs

The greater use of in-vehicle technology, which directly impacts repair costs, is a key factor in explaining the higher auto insurance premiums.  In fact, repairing a car after a collision cost an average of $4,794 in 2018, 35% more than it was 10 years ago. For the same period, the average premium increased by only 5.7%1.

The arrival of driver-assistance systems, now available on more and more models, are changing our vehicles into veritable itinerant computers. Over the years, the technology has become more sophisticated and parts and labour costs have risen, driving up repair costs.

Losses are up

Another explanation for the higher insurance premiums is the steady rise in claims volume and frequency. GAA stats confirm this. For the past two years, there were more claims and their costs went up significantly. 

However, the auto insurance premiums did not follow the trend and has changed little during many years: in 2018, the average premium was $595, a price comparable to 20041. However, it is in Quebec that the average premium remains the lowest in the country.

Is there anything I can do about this?

Yes, there is. In addition to the choice of your vehicle and your insurance coverage, your driving habits have also a great impact on the cost of your auto insurance.  Safety driving pays off!

Tip 1: Shop around

The auto insurance market is very competitive. Take advantage of that and shop around.  But make sure you compare the coverage you’re being offered. 

Tip 2: Drive carefully

Of all the claims paid by insurers, the vast majority are for road accidents. Collisions can be avoided by adopting safe driving habits and being courteous on the road.  

Tip 3: Reduce distractions

Avoid all distractions when you take the wheel. For example, plan your route and program your GPS before starting out. 

1 GROUPEMENT DES ASSUREURS AUTOMOBILES, Automobile Statistical Plan, General Results, 2018

 

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