Rates reach new peaks in Alberta and Atlantic Canada, increasing 10.05% and 3.75% in Q4
TORONTO, Jan. 24, 2019 /CNW/ - Today, LowestRates.ca, an online recommendation site for personal finance products like insurance, mortgages, loans and credit cards, released its Q4 2018 Auto Insurance Price Index, which uses proprietary data to track the average cost of car insurance in Canada each quarter.
The report found rates in Alberta are up 10.05% in Q4 when compared to the same time last year — the steepest increase in the country. Ontario saw an annual increase of 1.7% and Atlantic Canada saw a climb of 3.75%.
"For drivers, it's likely no surprise that auto insurance costs continue to increase as rates have been rising steadily for over a year now," said Justin Thouin, co-founder and CEO of LowestRates.ca. "While rate changes are influenced by a number of external factors, it's important for drivers to understand that while some insurers are raising rates, others may be lowering theirs. Insurance companies raise rates when their costs rise. And not all companies experience the same costs. That's why it's important to compare online to ensure you're being charged a competitive rate."
Breakdown by sex:
- Men are paying 0.67% more than in Q4 2017
- Women are paying 4.68% more than in Q4 2017
- Men are paying 9.49% more than in Q4 2017
- Women are paying 11.13% more than in Q4 2017
- Men are paying 2.88% more than in Q4 2017
- Women are paying 5.70% more than in Q4 2017
Prices fell in Ontario on a quarterly basis
While it's important to look at auto insurance prices on an annualized basis to smooth out seasonal volatility, the data did show that prices in Ontario fell for the first time since 2017 on a quarterly basis. Prices in the province were down 5.63% from Q3 to Q4. Alberta and Atlantic Canada, on the other hand, saw an increase of 4.2% and 1.95%, respectively, on a quarterly basis.
The decline in Ontario premiums shows the value of comparing auto insurance prices online. While the average quoted premium for LowestRates.ca users in Ontario declined 5.63% in the fourth quarter, that was less than the amount insurers were approved to raise rates. The Financial Services Commission of Ontario, which regulates auto insurance in the province, approved insurance providers for an average 3.35% rate hike in Q4 2018.
How does the Auto Insurance Price Index Report work?
The index works by looking at the lowest auto insurance rates available on LowestRates.ca each quarter, getting an average and then comparing it to past quarters. A benchmark quarter, in this case Q1 2018, is used to create a baseline (a reading of 100) for the index. Each point on the index above or below 100 represents a roughly 1% change in prices. For instance, a 105 index reading would mean the price has increased by 5% since Q1 2018.
Each market has seen the following increases on LowestRates.ca's Auto Insurance Price Index:
- Ontario increased from 100 on the index at the end of Q1 2018 to 101 at the end of Q4 2018
- Alberta increased from 100 on the index at the end of Q1 2018 to 107 at the end of Q4 2018
- Atlantic Canada increased from 100 on the index at the end of Q1 2018 to 105 at the end of Q4 2018
Why do rates increase?
Insurance rate increases are directly related to costs incurred by providers. For instance, if the number of claims rises in a given quarter for one insurer, they'll increase their premiums, even if other insurers lower their own prices. There are several trends right now that may contribute to these increases, including a higher number of distracted driving accidents, the rising cost of new vehicle repairs, and fraud. The LowestRates.ca Auto Insurance Price Index tracks the percentage change in the average car insurance quote received by individual drivers insuring only one vehicle in either Ontario, Alberta or Atlantic Canada.
LowestRates.ca is an online rate comparison site for insurance, mortgages, loans and credit card rates in Canada. The free, independent service connects directly with financial institutions and providers from all over North America to offer Canadians a comprehensive list of rates. LowestRates.ca's mission is to help Canadians become more financially literate, with the goal of saving them $1-billion in interest and fees.
For further information: Jamie Gillingham, Eighty-Eight, 1 647 490 1507, [email protected]