Car insurance rate increases

The top reasons why car insurance premiums increase

Even if you’ve had no tickets, no accidents, and no claims, there are many factors that could result in higher car insurance premiums.

1. Driving patterns have returned to pre-pandemic levels. More people are back on the road, meaning collisions and claims are increasing in frequency.
2. Inflation is making everything more expensive. As inflation leads to higher prices for all goods and services, it also affects the cost of things like new and used vehicles, emergency services, parts, and labour. That means paying for claims is more expensive, too.
3. Supply chain disruptions and labour shortages are leading to higher costs. The harder it is to find labour and materials, the more expensive it is to complete vehicle repairs or replace an unrepairable vehicle after a damage-related claim.
4. Car theft is on the rise. Car thieves are taking advantage of the increased value of used cars and stealing a wide variety of vehicles at an unprecedented rate. The Insurance Bureau of Canada estimates car theft costs Canadians more than $1 billion each year. This is an external link
5. Fraudulent claims are increasingly common. Fraudsters who stage accidents to cash in on insurance payouts are contributing to an increase in the overall number of claims, leading to an increase in car insurance premiums.
6. Distracted driving is on the rise. Distracted driving now outpaces impaired driving as a leading cause of accidents and deaths on the road, resulting in an increase in related claims. Premiums are increasing to offset the costs of these claims.
7. Trends might show that your area has a higher risk for collisions, theft, or other incidents. Your premiums could increase if analytics show that your area has become more prone to risks (like extra traffic congestion or extreme weather events that lead to collisions, for example).
8. Medical services are getting more expensive. It’s not just physical repairs that can cause premiums to rise. People injured in accidents usually need medical services like physiotherapy to recover, and these services cost more every year.
9. Autonomous features can mean costly repairs. Newer vehicles now offer a wide range of autonomous and safety capabilities like adaptive cruise control, advanced driver assistance systems in windshields, and park assist to keep you and your passengers safe. The flip side? They all use complex computers and sensors that cost more to repair — even after a minor fender bender.