Auto insurance – Why do Insurance rates increase and how can you save?

With insurance rates on the rise, it’s important to realize there are many components that contribute to these increases. If you’re purchasing a new policy or renewing an existing one, these insights will help you understand how your rates are calculated. You can also find more information on how to better manage your insurance costs at mcdermottinsurance.ca

Top reasons for Auto insurance increases

Why did car insurance increase 2020?

Fraudulent claims are increasingly common

Fraudsters who stage accidents to make money contribute to the rising cost of insurance. In Ontario, the Insurance Bureau of Canada reports that fraud cost an estimated $1.6 billion per year ($236. Per driver).

Distracted driving is on the rise

Distracted driving now outpaces drunk driving as a leading cause of accidents and deaths on the roads. Premiums are increasing to offset the costs to these claims

Trends might show your area as a higher risk for collisions, theft or other incidents

Your premiums could increase if analytics show your area has become more prone to risks (like extra traffic congestion or extreme weather events that lead to collisions, for example).

Medical services are more expensive

It’s not just physical repairs that can cause premiums to rise. Accident victims usually need medical services like physiotherapy to recover, which cost more every year.

Autonomous features mean safety, not always savings

Newer vehicles now offer a wide range of autonomous capabilities like adaptive cruise control and park assist to keep you and your passengers safe. The flip side? They also use complex computers and sensors that cost more to repair.

Windshields now have built-in technology

New advance driver assistance systems make windshields more expensive to replace. Recalibrating a car’s computer system following a windshield replacement also adds to labour costs.

Front and rear bumper sensors are pricey

Even a tiny fender bender can require a bumper replacement, and many repairs require the car’s computer system to be recalibrated for the sensors to work. Those extra labour costs can really add up.

How to save on Auto Insurance

Although costs are rising, there are way to save premium dollars

• Higher deductible
• Conviction / Claims –free discount
• Renewal Discount
• Multi-policy discount

Why did car insurance increase 2020? Ask our Brokerage about more detailed information on rising costs, discounts and ways to save or visit mcdermottinsurance.ca