To answer the question of why auto insurance rates are increasing this year, RATESDOTCA pointed to the ongoing issue of Canada’s prolonged period of inflation, which has forced insurance providers to adjust their rates accordingly to maintain the value of certain accident benefits. The inflation also affected deductible amounts, which would force policyholders to pay more out of pocket. These two factors, along with the need for insurers to raise their rates after two years of offering rebates during the height of the COVID-19 pandemic, are more than enough reasons for rate changes.
For its outlook, RATESDOTCA took a closer look at two notable provinces, Ontario and Alberta. The rate comparison website stated that Ontario drivers should expect their rates to increase, but when the increases apply depends on when a customer’s policy is set to renew.
“For current policyholders, rate increases take effect at the time of renewal, so some customers may have already seen their premiums rise, while others may see it in the coming months,” said RATESDOTCA auto insurance expert Tanisha Kishan, who added that Ontario’s FSRA is still approving rate increases and that RATESDOTCA is expecting an average premium increase “in the high single digits.”
RATESDOTA foresees auto insurance rates in Ontario to rise 5% in the first quarter of 2023, and up to 7% in Q2 2023. Q3 and Q4 remain unclear, but RATESDOTCA hinted that the increases during those periods may look similar to Q2’s.
Alberta’s auto insurance market tells a different story, noted RATESDOTCA. The province’s rate approvals were significantly lower (between 2% and 3%) last year, and RATESDOTCA suspects that those would impact rates this year. Several insurers have even been pressured to reverse their approved rate changes.
Paying some of the highest auto insurance premiums in Canada – if not the