Ontario auto rates keep going up

The Financial Services Commission of Ontario (FSCO) has approved average rate increases for auto insurance of 7.8% in the past year.

The Belair Insurance Company Inc. is the only insurer to decrease its rates in the quarter. They received approval for a decrease of 0.47%.

The biggest increase was CAA Insurance Company (Ontario) at 12.10%. The Dominion of Canada General insurance company had approval for a 5.36% increase. Intact Insurance Company increased by 5.51%. The Economical Mutual Insurance Company has a 6.73% increase with Security National Insurance Company getting a 3% increase. Pilot Insurance Company saw a 7.50% increase.

In total 54.67% of the market had rate changes approved. The weighted rate change average of 5.86% for 2009 Q2 is an increase over 2008 Q2’s average weighted rate increase of 5.59%.

July 2009 is seeing some further changes in rates. Some companies have received permission to increase rates by 15% to 20%. This could affect homeowners rates as well as auto insurance.

The increase in premiums is to help pay for increased costs of rehabilitation for victoms of car crashes. Of course the insurance companies have also had losses in the stock market.

What is interesting is that the lowest online auto quote decreased by 2.4% between 2009 Q2 and 2008 Q2, as reported by Kanetix. Kanetix is an online marketplace for insurance quotes and mortgage rates.

This is likely a result of people not buying new vehicles and becoming more cost-conscious in our challenged economy. Unfortunately the drop can also be attributed to persons not choosing to purchase extra coverage such as collision or comprehensive. Another factor is that people are getting older and more experienced then last year so they will find rates lower as well.

The insurance answer to saving money on insurance is not necessarily shopping online. You need to look at all your options for how to reduce your overall insurance costs.