If you have received your renewed insurance policy, you are almost certainly shocked and confused about why your insurance price is so high.
Insurance in Ontario is going through a major overhaul right now. Here is what you need to know.
Due to increased frequency and severity of claims, insurance companies have paid billions in settlements. Insurance companies are for profit businesses, and like any business when they are not profitable, changes are made to become profitable again. These changes involve the rate groups for vehicles (this is how insurance companies decide the cost to insure each vehicle) as well as territory ratings (this is related to postal code and gives insurance companies metrics regarding where you are driving).
The insurance industry is calling these changes a "correction".
In previous years, insurance companies have not been charging enough premium to cover the claims they were paying out. This correction is anticipated to last 3 years (2019-2021). Burlington is an area that has seen a major correction. As Burlington drivers, we used to have some of the lowest insurance rates in the province. Now with growing communities, increased traffic, and more severe weather, Burlington has seen a tremendous increase in rates compared to previous years.
What can I do?
Working with a broker is the best way to ensure that your policy and price work for you. All insurance companies are changing their rates and going through this "correction" however there still could be savings with another company. As brokers, we work for our clients and aim to educate during changing times like the one we're in, and ensure the best coverage and price for each client.