THUNDER BAY — Many drivers can expect to experience sticker shock when their car insurance policies come up for renewal this year.
In Ontario, the Financial Services Regulatory Authority has already approved insurance companies’ applications for rate increases as high 11 to 15 per cent, while others have been granted smaller hikes.
“Insurance rates are going to go up in the near term, because we’ve already seen rate approvals at FSRA come in. An insurer operating in Ontario has to apply to FSRA if they want to raise rates. It will look at the application and say ‘Yes, that makes sense based on your numbers. Your costs have gone up,’ ” explained John Shmuel of rates.ca.
In interviews with TBnewswatch, Shmuel and a spokesperson for the Insurance Bureau of Canada cited multiple reasons for the rise in premiums.
Some of the recent increases are “the biggest ones I’ve seen in a long time,” said Shmuel, managing editor of the website that allows consumers to compare rates for a variety of financial products.
This may come as a surprise to many drivers, as during the COVID-19 pandemic over the past three years, insurers were offering rebates or discounts on existing premiums because people weren’t driving as much and the frequency of collisions declined.
According to the Insurance Bureau of Canada, premiums in Ontario actually fell by an average of 4.5 per cent from July 2021 to July 2022.
“That’s changed in the past six months,” Shmuel said. “We’ve seen traffic come back to pre-pandemic levels and exceed them in some cities,