Insurance

Published on April 23rd, 2013 | by Jordan

Do Ontario Drivers Pay More For Auto Insurance?

It’s a question you hear often (and loudly): “why do I pay so much for car insurance?” Even good drivers with spotless records are scratching their heads as to why their rates only seem to keep climbing. Though a number of factors can affect your rate, there’s one in particular that most drivers aren’t aware of: insurance fraud. We consulted the Insurance Bureau of Canada’s recent State of the Industry report to find out more.

How does insurance fraud affect me?

“According to a report by KPMG Forensic (commissioned by IBC), auto insurance fraud in Ontario costs as much as $1.6 billion per year – that’s 18% of total auto insurance premiums. While the problem is very much localized in the Greater Toronto Area, no municipality is immune.” What does that mean for drivers in the GTA? “Insurance fraud takes money from honest policyholders and wastes public resources.” This, in turn, causes rate increases.

Auto Insurance Rates

So believe it or not, those who claim Ontarians pay more for auto insurance are actually correct! According to the report, “the average Ontario driver spends 5% of his or her disposable income on car insurance – compared to 3.1% in Atlantic Canada and 2.6% in Alberta.”

What’s happening to prevent insurance fraud?

According to the report, the “IBC has already helped reduce abuse and keep costs down. [They] are committed to continue helping government develop an auto insurance system that works for everyone by:

  • Implementing recommendations from the government’s Anti-Fraud Task Force;
  • Developing solutions to the mediation and arbitration backlog;
  • Providing clarity on the definition of catastrophic impairment;
  • Promoting consumer education and fraud awareness; and
  • Working with law enforcement to investigate and prosecute insurance fraud.”

Where can I learn more?

The Insurance Bureau of Canada’s “The Price is Wrong” campaign aims to “engage Ontarians, answer their auto insurance questions and get their opinions.” Visit www.ibc.ca to learn more about what affects your auto insurance rates.

How do I lower my car insurance premium?

One of the common reasons people think their rates should lower each year is loyalty; unfortunately, some insurance providers don’t take this into account when calculating your rate. But with auto insurance from CAA, the longer you’ve held a membership, the bigger the discount you’ll receive on your premium. You could save up to 15% just for being a CAA Member!

 

 

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