Do you think you’re paying too much for car insurance? With Ontario having the highest insurance rates in Canada, and the GTA specifically having the most expensive car insurance, most would probably shrug their shoulders and say "Obviously." A new report from the Ontario Trial Lawyer’s Commission suggests they may be right.
The author of the report, Schulich School of Business professor Fred Lazar, says insurance in Ontario is overpriced. He explains companies have taken an additional $5 billion from customers between 2011 and 2016, with $1.5 billion from 2016 alone.
In 2013, the Ontario Liberals promised to reduce car insurance payments by 15% by August 2015. Now, in May 2018, this new report suggest we are in fact overpaying by $143 a year instead of saving the promised $225 - a difference of $368!
The Insurance Bureau of Canada, however, would like to disagree. Steve Kee, IBC spokesperson, said that for every dollar earned in insurance premiums, insurance companies paid out $1.03, which would suggest premiums are at a fair level. A counter-argument is that the number of car insurance claims decreased by 27% in 2011 but premiums weren’t adjusted downwards to compensate. Unfortunately, insurance companies don’t disclose any information about their operating expenses (I wonder why?) and so we can’t get access to the actual numbers.
Both sides have an interest in having you believe their side of the story. Obviously, insurance customers would rather spend less, and insurance companies would rather have you pay more. Whether or not you believe either Lazar or Kee is up to you, but no matter who is correct, one thing is certain. Ontarians pay the most in car insurance.
There are ways to lower your car insurance premiums, but even by being the best driver possible, Ontario still faces insurance rates that are much higher than the national average. In fact, Ontarians pay more than double that Quebecers pay annually. Before you consider moving to Quebec to get better insurance rates, compare car insurance quotes online to see if you’re able to get a better deal west of Ottawa. If you don’t shop around, you won’t know if there’s a better deal for you out there.