Will COVID-19 continue to keep car insurance rates soft in Ontario?

car insurance rates

It’s fair to say 2020 was an unprecedented year because of the COVID-19 pandemic. Almost every facet of our lives has changed as we continue to grapple with the deadly virus, and that includes managing the cost of auto insurance.

On that note, and as we cruise into 2021, motorists in Ontario are wrestling with high auto insurance premiums. While many insurers refrained from increasing their base rates in 2020 and instead offered a series of rate-relief measures to help their customers, future rate changes may be on the way.

For drivers in Ontario, finding affordable car insurance has become more important than ever.

COVID-19 influenced rates

While consumers saw their finances pinched in many areas in 2020, car insurance rates provided a respite for some. With fewer commuters on the road, many insurers decreased their rates as lockdown measures kept most people at home.

Canada is still in the grip of uncertainty because of COVID-19, though vaccines point to a brighter future. What this means for auto insurance premiums through 2021 is up for debate. If vehicle use and traffic volumes return to normal levels, insurance companies could react by increasing their rates.

Still, Canada’s vaccination program is hardly a quickfire rollout. Prime Minister Justin Trudeau says most Canadians will receive the vaccine by September. In the meantime, COVID-19 will continue to influence the way we live. A second wave of the virus prompted Ontario to once again issue a stay-at-home order through January and February.

Whether drivers will continue to benefit from the crisis by receiving softer rates remains to be seen. Insurers will weigh driving trends and other factors such as the frequency of collisions and the cost of claims through 2021. A cautious approach may see insurers avoid requesting big rate hikes while the pandemic continues.

Rate Changes Continue to Fluctuate in Ontario

RATESDOTCA reports Ontario’s car insurance regulator, the Financial Services Regulatory Authority (FSRA), has a published list of currently approved rate changes. Some insurance companies secured approval to decrease their premium rates, highlighting the carriers’ willingness to soften rates during the COVID-19 pandemic. 

Below are the approved rate decreases and increases which take effect on December 1, 2020, or later:

InsurerRate Increase or Decrease %Insurer Market ShareEffective Renewal Date
Wawanesa1.96%3.8%December 1, 2020
Gore Mutual-4.96%1.48%January 1, 2021
Heartland Farm Mutual-0.42%0.31%January 1, 2021
Belair Insurance (Intact)-1.85%14.61%January 15, 2021
Portage la Prairie Mutual Insurance Company-0.03%0.17%February 1, 2021
Commonwell Mutual-0.10%0.56%March 1, 2021

Getting the best deal

Whether insurers continue to offer softer rates to reflect reduced vehicle use or increase rates through 2021 as Ontario returns to normalcy, finding the best deal remains important.

Ontario continues to be one of Canada’s most expensive auto insurance markets.  According to RATESDOTCA’s data, Ontarians were paying $1,616 on average for coverage during December 2020, a 9.7 per cent increase compared to December 2018. Despite the impact of COVID-19, motorists continue to pay over the odds for car insurance in the province.

Where you live is one factor insurers consider when determining car insurance rates. RATESDOTCA shows drivers in Brampton pay on average $2,698 per year for coverage, while customers in Kingston, Brockville, and 11 other locations pay just $1,103 on average each year.

Of course, most people cannot move to another municipality to get a better auto insurance rate. Shopping around remains one of the best ways to lock in a favourable premium no matter where you live. For drivers living in Brampton and the Greater Toronto Area, shopping around is arguably an essential part of buying car insurance.

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