Tuesday, 18 October 2016

Ontario Auto Insurance Rates Are Heading Back Up

FSCO's latest quarterly rate approval numbers have been released and the news is not good for consumers. Half the savings as a result of statutory accident benefit cuts that became effective on June 1 are already gone.

 FSCO approved 25 private passenger automobile insurance rate filings during the third quarter of 2016. These 25 insurers represent 63.56% of the market based on premium volume. Approved rates increased on average by 1.5% when applied across the total market. This wipes out almost half of the modest 3.07% reduction in approved rate filings in the first quarter of 2016. Depending on rate filings in the last quarter, we could see a net increase in rates for the 2016 calendar year.

 The government has abandoned the the 15% rate reduction promise made in August 2016. However, if you aggregate all the rate changes since the 2013 announcement, the total rate reduction is 8.34% when applied across the total market.

 Product reforms have proven to be an ineffective tool for controlling auto insurance premiums in Ontario. As long as transactional costs within the system remain high, Ontario drivers will continue to pay high rates. A new delivery system is needed to bring Ontario's costs in line with other jurisdictions. For a discussion on how to address the systemic problems in Ontario, see my article entitled Ontario's 25-Year No-Fault Journey.


  1. Hi there, I enjoyed your article. I was shopping around for high risk auto insurance rates, and is it your opinion that rates have gotten a little more competetive in Ontario of late? I'm now in Alberta but considering a move back to Ontario and wanted to research a little. I know that there are some good providers out there in Ontario likethese guys, https://2ndchanceautoinsurance.ca/onlinequote/ but I am still shocked at the difference between Alberta and Ontario. Thoughts? Is this a permanent trend upwards, cost wise? Thanks again, Christy

  2. Auto insurance rates in Ontario have been stable since 2010 but only because there have been several rounds of benefit costs during that period. The rate differential in Ontario and Alberta is because of several factors - higher concentration of drivers in the Toronto area, different driving conditions, the product in Ontario is different than in Alberta, fraud, the cost of administering the Ontario system is too high.


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