You may have heard that auto insurance rates have been on the rise since the pandemic began in March 2020.
It's true - auto insurances have increased.
According to Canadianunderwriter.ca, “The average auto insurance premium climbed by about 30% in Alberta, 17% in Atlantic Canada and 4% in Ontario over the course of 2020 (2020 Q4 versus 2019 Q4), according to data collected by the comparison site for home and auto insurance, and other financial products.”
Rates have increased despite lockdowns leading to fewer drivers on the road – but why is this?
Rate increases are attributed to more inexperienced drivers using the roads, in particular young adults who may have previously relied on public transportation. And young people aren’t the only ones. Drivers of all ages who previously relied on public transportation took advantage of lighter traffic and started driving to and from work.
In the same regard, many drivers no longer commuted to work and started working from home, which resulted in substantial savings on auto insurance rates.
However, removal of a cap on insurance rate hikes has meant that insurance companies can now raise annual rates more than the previous 5% limit. In Alberta, this has meant that some insurance prices have risen 36% since the cap was removed in the third quarter of 2019. In comparison, some Atlantic Canada insurance companies have said they are either restricting new business or thinking about pulling out due to caps on what they can charge drivers.
The good news is you don't have to settle for high auto insurance rates. Getting the best rate is one of the advantages of working with a qualified insurance broker – they always have your best interest in mind and will ensure you get the best rate on personal auto insurance, despite rate increases.
At OTC Insurance, we work with clients to find the appropriate level of coverage to fit their needs, budget and risk level. We work with a variety of different auto insurers to get clients the best possible price for the coverage they desire. Contact us to learn how we can help.