Bad news for residents of Ontario as they should prepare to pay higher automobile-insurance premiums this year, warns a leading online insurance and mortgage broker. In its latest survey released Wednesday, Kanetix found the lowest insurance rates quoted on its Web site rose by an average of 5.3% in the fourth quarter, marking the first increase in five quarters.
“This was an interesting quarter,” says George Small, co-founder of Kanetix Ltd., which provides an online automotive-insurance shopping service for Canadians. “This is the first time we saw a shift for some time.” While automobile-insurance rates had fallen in 2008 and for most of 2009, the fourth quarter appears to have “turned the corner,” he said. “We’re in a different part of the cycle.”
Several factors likely contributed to the decrease in rates over the past several quarters, including the traditional industry cycle. As well, with the economy’s slowdown, many consumers held on to their older vehicles for longer than normal, and generally the older the vehicle, the lower the premium.
Although some insurance providers have already announced rate increases, Small said Kanetix hasn’t seen a jump in the lowest quoted rates until now in part because many Ontario drivers have been taking measures to keep their rates down. Among some of the best measures, he said, drivers can look for discounts and deductibles. “We encourage people, as they’re going through the quote process, to really look at discounts, especially now when times are tough,” Small said.
As an example, some insurance providers offer a discount if drivers use snow tires, he noted. They may also offer group discounts, under which drivers who belong to certain employer groups, trade unions, or alumni and professional associations could qualify for significant savings.
As well, Ontarians should review their optional coverage to determine if it still applies, he said, pointing to such services as coverage on foreign rentals, which may no longer be necessary if travel budgets have been cut.
Drivers of older vehicles could also consider raising their deductible for collision and liability.
Kanetix also noted that it can definitely pay to shop around, noting that rates can “vary wildly” among providers. It also suggests drivers review the rates they pay regularly, as the provider with the lowest quote at the start of a policy may no longer be the provider with the lowest quote.
Ontario is Canada’s largest automobile-insurance market, representing about half of the private insurance market.
-By Monica Gutschi