A highway is busy with traffic, showing one reason why the cost of your car insurance may have gone up at renewal time

Everything seems to be rising in cost lately. If the cost of your car insurance recently went up at renewal time, there are several reasons why that might be. While some premium increases may be caused by factors within your control, others are caused by issues that are affecting car insurance customers across the country. We've got the scoop on some common reasons for price increases and some things you can do to help lower the cost of your car insurance.

Some car insurance price increases may be caused by factors within your control, but others are caused by widespread issues that are affecting drivers across the country.

Car insurance premium cost factors you can control

There are many factors that go into determining the cost of your car insurance, from your choice of vehicle to your driving habits. These are a few common factors within your control that may cause your premium to go up at renewal time:

  • You’ve been involved in an at-fault collision. Generally speaking, your insurance company rewards you based on the number of years you go without making an at-fault claim. When you make a claim following a collision where you’re determined to be at fault, you start over again and have to re-build your claims-free reputation.
  • You’ve had traffic tickets or other violations. The more severe the violation, the more of an impact it will have on your premium.
  • Your licence has been suspended because of a traffic violation or other serious offence. If your licence is suspended for an administrative reason (e.g., you forgot to renew it or it has been taken away for medical reasons), it shouldn’t affect your premium.
  • You've added a new driver or car to your policy. Replacing the current vehicle on your policy with a newer car can raise your premium if the cost to replace or repair your new car would be higher than replacing or repairing your old vehicle. Adding another driver to your policy, especially if they're a new driver or are under the age of 25, may also increase the cost of your car insurance.

Car insurance premium cost factors affecting the entire industry

Sometimes your car insurance premium may go up even when you have a perfect track record and nothing seems to have changed. This can be frustrating, to say the least — but you're not the only one experiencing this type of increase. We're here to explain what's happening behind the scenes that's contributing to industry-wide price increases across the country.

Before we get started, it's worth noting that car insurance premiums are regulated by the government. If your car insurance company wants to increase its rates, it has to apply to a government body — and its application has to be approved before rates increase. These are a few of the reasons insurance companies are applying to increase their rates:

  • Technology in modern vehicles costs more to repair. Many modern vehicles are built with advanced driver assistance systems that help keep you and your passengers safe. The flip side? These systems involve complex sensors and computerized components that are expensive to repair.
  • Distracted driving is on the rise. Not only does this mean that the number of accidents is increasing, but the damage that occurs in distracted driving-related accidents tends to be more severe. As the frequency and severity of claims increase, so do car insurance premiums.
  • Car insurance fraud is affecting the entire industry. In Ontario alone, the Insurance Bureau of Canada reports that car insurance fraud costs drivers an estimated $1.6 billion each year (or about $236 per driver). Insurance companies are working to reduce instances of car insurance fraud and minimize the impact they have on customers.
  • Medical services are becoming more expensive. If you’re in an accident and need physiotherapy, for example, the cost of an appointment is likely higher today than it would have been in the past. Insurance companies have to factor an overall increase in medical expenses into their premiums.
  • Trends in your area show that you're now at higher risk for collisions, theft, or other incidents. Insurance companies need to charge their customers enough that they will be able to pay all claims that are made — so as your risk of making a claim increases, so will the cost of your insurance. Your premium may increase if your insurance company's advanced analytics show that your area has become more prone to congestion, extreme weather events that lead to collisions, or crimes like carjackings, for example.
  • More people are commuting again. Across Canada, people are returning to the office as COVID-19 restrictions are lifted in a growing number of workplaces. More traffic means an increased risk for accidents, so car insurance premiums are rising in response, especially for drivers in urban areas and for those with lengthier daily commutes.
  • Inflation is playing a role in rising insurance rates. Rising inflation means car part prices and repair costs are increasing, so it's more expensive than it has been in previous years to repair a vehicle after an accident. In response, insurance companies are more inclined to increase insurance premiums.

How you can save on car insurance

As you can see, there are a number of factors that contribute to increased car insurance premiums, and unfortunately you can’t control every detail that goes into the calculation. But the good news is there are plenty of things you can do to lower your premium, from taking advantage of discounts to increasing your deductibles. Here are some of the best ways to save on car insurance: 

How to save $ on home insurance

It’s no secret that the cost of car insurance is going up across the country. Car insurance fraud, new technology in modern vehicles, and rising medical expenses after accidents are just a few of the reasons rates are going up.The good news is, there are plenty of ways you could save on car insurance…like installing a steering-wheel lock or alarm system, using winter tires in the colder months, changing your driving habits, or buying coverage for multiple vehicles or properties (or both!) from the same company.Discounts may also be available to drivers who are conviction-free, above a certain age, or part of a special group or association.If your insurer will allow it, choosing a higher deductible could lead to a lower premium, too.Plus, if you’ve been insured with the same company for a long time and haven’t had to make any claims, you could be rewarded with even more savings. But wait, there’s more! Believe it or not, there are even more ways you could save on car insurance. Talk to your licensed broker to find out what you can do to get the coverage and service you need at the best possible price.

Did your car insurance premium go up this year? Find out why and learn what you can do to save.

Learn even more ways you could save on car insurance:

Simple ways to save on car insurance
10 car insurance discounts that could save you money

If you have questions about your own car insurance policy or you want to make sure you’re getting the best price available to you, reach out to your group’s licensed insurance broker today.

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