Home, auto rate increases in 2023 “highest…seen in years.”

Canadian auto insurance rates increased 10% in 2023 compared to 2022, and similarly home insurance rates saw an increase as well — up 6.6% last year, according to the latest release of the Applied Rating Index.

“The close of 2023 saw the highest premium rate index for both personal auto and personal property seen in years,” Steve Whitelaw, senior vice president and general manager of Applied Systems, commented in a release.

As of the end of 2023, both auto and home insurance rates were climbing on a quarterly basis as well.

During 2023 Q4, for example, auto rates increased 4.8% compared to the previous quarter (2023 Q3). And in home insurance lines, rates in 2023 Q4 were up 2.4% compared to the previous quarter.

Applied’s index is a data-driven report of current conditions and trends for personal lines auto and property (home) insurance premium rates. It analyzes completed quotes to measure increases or decreases in average premium rate trends across Canada.

Related: Where auto and home insurance rates are headed

Nowhere in Canada was safe from rate increases in both auto and home lines of business, Applied’s latest report shows.

In personal auto lines, all provinces experienced higher premium rates year-over-year. Quebec (12.4%) and the Atlantic provinces (10%) saw the highest rate increases, with Ontario (8%) and Alberta (7.6%) seeing significant increases as well.

Personal property lines in all provinces followed the same trajectory as auto premiums — up.

In order, the highest regional home insurance rate increases last year to the lowest were:

• British Columbia (11.1%)
• Atlantic provinces (9.1%)
• Ontario (8.3%)
• Saskatchewan and Manitoba (6.4%)
• Quebec (2.5%), and
• Alberta (0.7%).

These numbers won’t come as much of a surprise to anyone following Canada’s property and casualty insurance industry over the past year.

On the auto side, people are returning to their commutes to the office, so the frequency of collisions is increasing. Auto insurers paid out more than $1.2 billion in auto theft-related claims last year, a record high. And inflation is jacking up the price of repairs due to the higher prices for parts, plus more expensive technologies installed in cars. Also, in part due to supply chain issues, auto claims are more expensive because of longer repair cycle times and vehicle rentals.

Meanwhile, the Canadian P&C industry paid out more than $3.1 billion in claims related to natural catastrophes last year, the fourth-highest on record. And the same issue with inflation and supply chain has also increased the amount required to pay for home repairs in the wake of theses Cat events.

Feature image courtesy of iStock.com/wildart