Why Are Auto Insurance Premiums so High in Ontario?
The Fraser Institute published a report saying that Ontario drivers pay some of the highest insurance premiums in Canada. Why is it so expensive to insure a vehicle in this province? This article will help explain some of the reasons why premiums are higher in Ontario.
More Cars Are Stolen in Ontario
One of the many factors that determine the cost of insurance in an area is the frequency of vehicle theft. Over the last few years vehicles that have been stolen the most in Ontario include the Honda Civic, Cadillac Escalade, Audi S4, Acura RSX & Integra and the Hummer H2. An increase in the incidence of theft makes the cost of premiums rise. If you buy a car that is stolen less often then you can likely expect your premiums to go down. This isn’t always possible but it’s something to keep in mind when purchasing a car. Theft and damage is often more common in larger metropolitan areas and Ontario has many cities with large populations.
No-Fault Insurance – Is it Better?
No-fault insurance is meant to lower the cost of insurance premiums but many critics feel that it might be driving up the cost of insurance in Ontario. No-fault auto insurance is a type of insurance whereby the payouts are provided by your own insurance company rather than the insurance company of the person deemed “at-fault” in the accident. You can read more about no-fault insurance by clicking here.
The amount of auto insurance fraud in Ontario has ramped up quite significantly over the last few years. Here are a few news articles discussing this alarming trend:
- Fraud prosecutor needed, officials say
- Car crashes staged for insurance scam: Police
- How small-time auto insurance scams have evolved into big business in Canada
- Staged car accidents on rise in Toronto: insurers
- Shady clinics bilk $1.3 billion in bogus car insurance claims scam
Auto insurance fraud costs insurance companies billions of dollars each year. These costs inevitably come back to the consumer through higher insurance premiums. In many other provinces in Canada there is less fraud. This could be due to smaller populations or better enforcement of the law. It could also be that less criminals in those other provinces have insurance fraud on their repertoire of illegal money making schemes.
Ways to Fight Back – How Ontario Drivers Can Save Money on Car Insurance
- Bundle Your Insurance – Almost all major insurance companies will offer you special deals for bundling your home, auto and life insurance products. If you have other financial services or retirement savings plans with a specific institution then you could save even more.
- Look for Discounts – Depending on the insurance company that you choose, there may be discounts for seniors, students with good grades, drivers with good driving records etc.
- Drive a Hybrid – There are a number of insurance providers in Canada now offering discounts on car insurance for hybrids. Meloche Monnex Insurance is one of the companies currently offering such discounts.
Those are just a few of the ways you can fight back against expensive insurance policies in Ontario. Being a safe driver is probably going to save you the most money in the long run so keep that in mind. Safe driving can also lower the risk of injuring yourself or others and that should be even more important than saving money on car insurance premiums.