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| January 13, 2010: Car insurance premium rates skyrocket in Ontario - at far more than double the stated general inflation rate... |
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A recent study of Ontario car insurance costs reveals a 5.3 per cent average increase in the lowest auto insurance rates for Ontario drivers in the 4th quarter of 2009 compared to the same quarter in 2008. The car insurance cost increases, consistent with rate changes previously approved and announced by Ontario's auto insurance regulator, means drivers should prepare themselves for rising car insurance premiums in the months ahead.
"Ontario car insurance rates appear to be on the rise and drivers have more reason than ever to watch what they are paying in insurance," says George Small, Co-founder of Kanetix Ltd. "It's important for drivers to know they have choices. There are money-saving options available that may help them keep their car insurance premiums as low as possible." There is a tendency to erroneously assume that competing insurers offer similar rates. In fact, however, rates can vary wildly between providers. No two unrelated companies are identical, and the company with the lowest rate when a policy was first purchased may not be the company with the lowest rate at present. There may be discounts that one may be eligible for but is not getting and a review of automobile insurance is well worth it. For example, some insurers offer a discount if you change your tires seasonally, saving you up to 5 per cent. In another example, the group discount, may allow drivers who belong to certain employer groups, trade unions, or alumni and professional associations to qualify for savings of up to 10 to 20 per cent. Review of your deductible may also serve to lower your automobile insurance costs. The higher your deductibles the lower your premium. For example, policyholders with deductibles set to $500 could save up to 5 per cent by raising them to $1,000. Keep it affordable though, because this is how much you'll have to fork out should you need to submit a claim. Review your policy to see if there are optional coverages included in your current policy that you may not need. For example, if you drive an older car and your collision and comprehensive deductible is set to a dollar amount that is nearing or more than the value of your car, it may no longer make sense to: a) keep these coverages, or b) keep these coverages at the current deductible amount. Drivers are cautioned and urged to disclose all facts to their insurance broker. Don't assume that automobile insurers respect the charter of rights. Age and gender discrimination, as well as the neigbourhood where you live, and numerous other factors play a part in determination of premium. Moreover, a "forgivable accident" may not be portable from one insurer to another, so if you have had an accident, or a traffic infraction, make sure to disclose it to your broker before you consider switching companies. Insurance companies may charge you in your premium for the "forgivable accident" feature; however, it is one of the ways in which they keep you captive and you need to know whether the "forgivable accident" is portable to the new insurer. Also, car insurers defy mathematics. In the car insurance world, 50+50=200. In other words, the car insurance cartel in Ontario has what they call a "fault chart". If you and the other driver disagree on how the accident occurred or who caused it, the insurance companies ultimately win as both drivers will be considered "partially at fault". It's often irrelevant whether you were deemed to be totally at fault or only partially at fault; for premium calculation, you will get dinged for the accident just the same regardless of the degree of fault that is ultimately attributed to you. Payment of premium: Consider carefully the doubtful merit, if any, in paying your premium other than annually in full. A 3% additional charge up front for the "pleasure" of risking your insurance policy (and your future insurance costs) by paying monthly is not a 3% financing cost but works out to an APR that is double that amount (or more if your payment schedule involves paying two months up front or a "handling fee"). A missed automated monthly installment may cause cancellation of coverage "for non payment" and a huge insurance premium rate hike - as much as 200% or more - if the insurance company refuses to reinstate. One of the best "investments" in automobile insurance is to deal with a qualified and consumer interest oriented insurance broker rather than to purchase your car insurance "online" as if it was a toaster or a movie ticket. A good broker will go to bat for you, should the need arise, and just that is one of the best investments in the financial sector, and well worth any minor difference in the premium. E.&O.E. |
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