Woe is Brampton, long the priciest in the province
Brampton has retaken first place… in an inauspicious bracket.
According to RATESDOTCA, an online rate comparison site that surveys trends in Ontario insurance, the receding impact of our recent Covid-inspired driving changes has the dust settling in familiar patterns. Brampton, long used to carrying the highest auto insurance rates in the province, has returned to retake that crown.
Now we’re all back to business as usual once again, rates are heading northward, and skies further darkened by ongoing global parts shortages and inflation.
“It’s not a surprise,” says insurance expert Daniel Ivans from RATESDOTCA. “Covid had a big impact, and much of the GTA was shut down. We saw decreases and some rebates during that time, but now things are catching back up.”
Last year’s survey put Vaughan in the top spot, but they’ve fallen to number five despite experiencing just a one per cent reduction in rates. That’s not much of a story compared to Brampton, a city that has vaulted back to number one with a wicked 37 per cent increase in insurance rates, going from an average premium of $1,976 to $2,707.
Toronto and Mississauga rose to second and third spots, with average annual premiums of $2,325 and $2,311. While not the jagged uptick that Brampton experienced, those are hefty increases of 19 and 17 per cent respectively.
Hamilton is back on the top ten list, with a 16 per cent hit in that city on an average spike from $1,564 to $1,820. If you’re moving, choose your new postal code with care. Drivers in the GTA “pay some of the highest premiums in the province.”
Brampton’s mayor announced in February a pilot program aimed at tackling escalating auto theft in that city by offering Faraday pouches to targeted households. I was told Friday by the mayor’s office that the pouches have arrived and mailing will begin shortly. They were also glad to hear that the Premier has allotted over $50 million to combat auto theft in the province, though the province should be doing far more to rein in premiums that are becoming unbearable for many.
Will Brampton’s pouch program curb theft? Thieves have increasingly moved beyond the relay theft scam, but every deterrent, including attaching the old school Club to your steering wheel, will help move someone past your car. We’re all just moving targets.
“Ontario is catching up on what is a global problem,” says Ivans. “The U.K., the U.S., we’re about 18 months behind. This is about increasing costs of labour and car parts as well as consumer behaviour.”
Insurance companies in Ontario must apply for rate increases to the Financial Services Regulatory Authority (FSRA). Even as some of you saw rate deductions or rebates because you were driving far less after March 2020, the industry was bracing for a return to full roads, global shortages, more expensive vehicles, and inflation. They were asking for — and receiving — the right to charge you more. “Rate change requests began last year, and some were hefty, with the provincial regulator approving some as high as 15%,” per the survey.
“By publication time, 22 insurance providers had received approval to increase their rates since the start of the year, with the average change per insurer standing at 6.5%. Still, more approvals are expected.” If you’ve been happily re-upping with the same company year after year, it might be time to contact your broker to rerun some numbers. Don’t do this if you have a conviction on your record, however; no sense triggering a peek at your driving abstract if you don’t have to.
It’s small comfort, but right now Alberta is in an even worse situation. According to Hello Safe, another site that sifts the numbers, average premiums there have hit $3,151. That province announced a freeze on rates for 2023, though previously approved hikes will still be filtering through to consumers.
A recent Ernst & Young report digs into the vast discrepancies between provinces; while they have different methods of delivering auto insurance, the report scrapes it down to a granular level. According to the Calgary Herald, “… the report found [that] a 30-year-old married man driving a 2019 Ford F-350 with one March 2021 accident on record would pay $4,791 annually in Alberta. That’s the highest in Canada, next to Nova Scotia ($3,735) and Ontario ($3,568), and well above B.C. ($2,065) and Saskatchewan ($1,417).”
For a glimpse at how backwards we are getting this entire thing, consider this: I drive a three-year-old hatchback with modern safety features. While repairs on all vehicles are considerable, mine would generally be cheaper to repair than one of the luxury SUVs that outsell it. But while insurance companies keep telling us how costly it is to repair increasingly expensive vehicles, my rate wouldn’t necessarily go up if I climbed into a far larger vehicle.
Why? Because insurance actuaries are staring at numbers, and if I’m in a huge pickup, the chances of physical injury to its occupants (me) go down; if that pickup rams my hatchback, it’ll cost a lot more to repair my body. So even though I choose to drive a right-sized, relatively inexpensive vehicle, my insurance rates will reflect what it will cost to fix me if I get rammed by someone else who chooses to drive a behemoth.
Check with a broker before you buy a car, and before you move. There could be some unpleasant surprises in store.
Lorraine Sommerfeld – Driving.ca – 2023-05-08
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