While sometimes it seems the price of everything is rising each year, in Ontario lately car insurance costs, on average, have been falling. Part of that is the provincial government’s approach to reducing rates in Canada’s most expensive province for auto insurance premiums. However, in the absence of such regulatory corrective action, there are a number of factors that affect car insurance prices, and some of these are subject to inflationary and other effects that contribute to cost increases over time.

Factors Affecting Car Insurance Prices

insurance claim

Insurance companies base car insurance premiums on a number of factors that involve assessing the risk and potential claims cost that a vehicle faces. Some of these could, over time, change in either a positive or negative direction. For example, if you live in an area that is undergoing population growth, the increased traffic density that accompanies that growth could be a statistic that insurers consider. This is particularly true if there’s a corresponding increase in the accident and insurance claims rate for your postal code region, a geographical division that many insurance companies use to identify insurance activity. Costs of repairs may also increase over time, as materials costs rise. Since a collision insurance policy covers part of those repairs, after a driver pays the deductible, rising costs will reflect in rising premiums.

Your Driving Record and Car Insurance

If you are experiencing accidents, speeding tickets or insurance claims every year, you can expect to pay more for insurance every year, since you are demonstrating a pattern of poor driving habits. If, on the other hand, you have no traffic tickets, accidents or other insurance claims, your positive driving history starts to influence a downward pressure on your premiums.

It may be up to you to contact your insurance company or broker to ask about changes to your policy. They are obligated under the Financial Services Commission of Ontario to explain conditions surrounding your policy to you. You may be eligible for discounts or lower base rates, but you may have to ask for these. They may not be automatically added into your policy.

Avoiding Annual Car Insurance Increases

Each insurance company has its own way of issuing car insurance and calculating premiums. Because of this, two companies may offer widely varied pricing for similar policies. If you have received a notice of car insurance renewal that includes a price increase, it’s possible that another company may not have a similar increase. Even though you already have insurance, comparison shopping at renewal time is a smart idea.

You can start here on the RateLab page. Entering your car insurance information will search over 30 car insurance providers to match your needs against their policies. The search will return the lowest price estimates for your situation. You can then negotiate with your existing provider or pursue coverage with a lower cost provider and fight against the annual increase in car insurance costs.