More than half of Canadian drivers switch insurers due to price

More than half of Canadian drivers switch insurers due to price | Insurance Business Canada

Motor & Fleet

More than half of Canadian drivers switch insurers due to price

Survey shows concerning finding among 74% of respondents

Motor & Fleet

By
Terry Gangcuangco

Ratehub.ca has surveyed drivers to understand Canadians’ perspectives on auto insurance. The findings highlight significant behaviours and strategies motorists are adopting in response to increasing premiums.

The survey revealed that 57% of drivers have switched insurance providers due to price hikes, while 60% are open to opting out of specific coverages to lower their rates.

In pursuit of premium reductions, 67% of drivers have compared car insurance quotes, 64% have maintained a clean driving record, 58% have bundled multiple insurance products, and 41% have increased their deductible.

Notably, 74% of ex-policyholders who no longer own or operate a vehicle are reconsidering their future ability to own a car due to rising insurance costs.

Matt Hands (pictured), vice president of insurance at Ratehub.ca, commented: “It’s not surprising that nearly half of respondents reported significant increases in their auto insurance premiums. Several factors contribute to these rate hikes.

“One major reason is the rising cost of vehicles and their repairs. Vehicles today are equipped with advanced technology and safety features, making initial purchase prices and repairs more expensive.

“Another contributing factor is the surge in auto thefts across Canada, particularly in provinces like Ontario, where auto theft claims costs increased by 524% between 2018 and 2023.”

Hands went on to explain: “Increases in comprehensive claims, such as auto theft, impact both insurance companies and drivers. This makes it increasingly difficult for consumers to find competitive rates and options.

“Due to these factors, it’s unsurprising that 74% of former policyholders who no longer own or operate a vehicle are second-guessing their ability to own a car in the future.

“Insurance fraud also plays a significant role in this pricing increase, as fraudulent claims drive up overall costs for insurers, which are then passed on to consumers.”

Meanwhile Morgan Roberts, VP of RH Insurance, warned against cutting down on cover.

“Of the 60% of drivers considering opting out of specific coverage, many might not realize the full extent of what they’re losing, making the savings not worth it,” he pointed out. “It’s crucial for drivers to understand the implications.

“For example, opting out of direct compensation property damage in Ontario means forfeiting coverage for not-at-fault accidents. If you’re not at fault, you won’t be reimbursed for the replacement value of your vehicle, repair costs, towing costs, or any other damages.”

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