Ontario Auto Rates Drop More Than 10% in 2004

According to rate approvals from the Financial Services Commission of Ontario, the average auto insurance rate dropped 10.6% over the course of 2004. But insurers say consumers in Ontario will see even more savings in 2005.

Rates fell 6.08% on average, comparing the end of 2004 to the end of 2003, but this does not take into account fourth quarter 2004 approved rate decreases, as these will not play out until policies are renewed, FSCO notes. Between the end of 2002 and 2003, rates increased 14.1%, on top of an average 15.8% increase between the end of 2001 and the end of 2002.

The Insurance Bureau of Canada (IBC) says Ontario drivers should save about $900 million in premiums this year. “This is a direct result of a financially stronger, more competitive insurance industry and essential reforms undertaken by the Ontario government,” says Mark Yakabuski, vice president of federal affairs and Ontario region for IBC (see also “Industry prepares”, pg. 46 of this issue). “Drivers should shop around and consult with their insurance representatives to make sure they are taking advantage of declining rates,” he advises.

IBC data indicates an even larger decrease in actual rates than is indicated by the FSCO filings, with rates down 12% since November, 2003. This means the average personal auto premium fell from $1,499 to $1,319 over that time. And the decrease is even greater when commercial vehicles are taken into account, the IBC adds. IBC figures represent actual policy data from member companies representing 90% of the industry, while FSCO figures are based on rate filings.