Shop Insurance Canada has criticised the price hike in Ontario auto rates, describing it as a “blow to the province’s quest to lower premium rates,” which will mean increased costs for consumers.
The company said that the Financial Services Commission of Ontario’s (FSCO) third quarter auto insurance rate recommendation to increase prices was “shocking for many.”
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The FSCO guidance, released in October, recommended that auto insurance rates should be increased by 1.50%.
But some insurers took a more drastic approach.
“We have already seen in some provinces that insurers went against regulatory recommendations and decided not to raise their premiums in 2016. It is unclear at this moment which auto insurers will follow that lead in Ontario, but some have already started raising premiums by up to 12%,” the company said in a release yesterday.
The move to raise rates could potentially undo the strides made by the Ontario government and the private industry to reduce rates in the province, it said.
Citing Ontario’s very high rates, with average annual premiums at over $1,500, the company said that the Liberal government’s 2013 pledge to cut costs by over 15% in two years had failed.
Work has continued to lower car insurance in Ontario since however, and the number now stands at around 10% less than it was in 2013, Shop Insurance said.
“If insurance companies now increase rates by up to 12%, Ontarians could find themselves back to square one in terms of how much they pay for auto insurance,” the company said.
And while not all companies will implement major price hikes, the impact to the consumer is still considerable.
“Of course, the majority of companies will raise premiums by lower percentages, and as mentioned some may not higher them at all,” the company said.
“However, even a small increase means that hope of continued decreases in Ontarian car insurance costs are harder to predict.”
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