Despite increasing rates, LowestRates.ca found that 37% of Canadians do not compare car insurance before purchasing
TORONTO, July 31, 2018 /CNW/ - Today, LowestRates.ca, an online rate comparison site for insurance, mortgages, loans and credit cards, released its Q2 2018 Auto Insurance Price Index, which uses proprietary data to track the average cost of car insurance in Canada on a quarterly basis.
The report found that the price of auto insurance has been trending upward in all three markets surveyed with increases of 2.93% in Ontario, 2.84% in Alberta and 0.92% in Atlantic Canada versus the prior quarter. When compared with this time last year, Alberta saw the steepest rate increase at 8.29% and Ontario saw an increase of 0.67%. Annual data for Atlantic Canada is not yet available.
Breakdown by sex:
- Men are paying 0.17% less than in Q2 2017
- Women are paying 2.50% more than in Q2 2017
- Men are paying 6.67% more than in Q2 2017
- Women are paying 5.99% more than in Q2 2017
- Men are paying 1.95% more than in Q1 2018
- Women are paying 0.42% more than in Q1 2018
Despite rising auto insurance prices across the country, LowestRates.ca found that 37% of Canadians who have car insurance did not spend any time researching and comparing rates before purchasing a plan, with baby boomers (42%) and women (38%) the most likely to neglect comparing rates. In Alberta, where auto insurance prices saw the steepest increase over the last year, 32% of Albertans said they did not compare rates before locking in; similarly, 33% of Ontarians who have auto insurance did not spend time researching rates, and 36% of Canadians living in Atlantic Canada did no comparison shopping.
"This edition of the Auto Insurance Price Index makes clear what I'm sure a lot of Canadians assumed—car insurance rates are increasing across the country," said Justin Thouin, Co-founder and CEO of LowestRates.ca. "This makes it all the more important that consumers utilize the full gamut of resources available to find the rate that works best for them. Unfortunately, we know that over a third of the country is not doing that, and as a result, are likely paying more than they need to for their auto insurance. The Auto Insurance Price Index is just one of the many tools that can help equip Canadians with the information they need in order to make smarter financial decisions."
How does the Auto Insurance Price Index Report work?
The index works by looking at the lowest auto insurance quotes available on LowestRates.ca each quarter and comparing those rates to the hundreds of thousands of quotes processed by the website. 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% in 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 103 at the end of Q2 2018
- Alberta increased from 100 on the index at the end of Q1 2018 to 103 at the end of Q2 2018
- Atlantic Canada increased from 100 on the index at the end of Q1 2018 to 101 at the end of Q2 2018
This index also shows the value of comparing auto insurance. While the average quoted price on LowestRates.ca rose 0.67% in the second 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 1.11% rate increase in Q2.
Why do rates increase?
Insurance rate increases are directly related to costs incurred by providers. For instance, if the number of claims rise 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 costs of new vehicle repairs and fraud. The LowestRates.ca Auto Insurance Price Index tracks the percentage change in the average quote requested for car insurance by individual drivers residing in Ontario, Alberta and Atlantic Canada, insuring only one vehicle.
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 wants to help everyone become more financially literate, with a goal of saving Canadians $1 billion in interest and fees.
For further information: Press contact: Jamie Gillingham, Eighty-Eight, 1 416 944 2722, [email protected]