Canadian Underwriter

This ‘cardinal sin’ will increase your client’s auto insurance bill

May 26, 2020   by Greg Meckbach

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Young male motorists can expect to pay more than women for auto coverage but the decisions your clients make have an even greater bearing on their insurance bill, the co-founder of suggests.

“The cardinal sin is cancellation for non-payment,” CEO Justin Thouin said Monday in an interview.

“If you have a gap (between insurance policies) because the insurance company cancelled you because you haven’t paid, you are going to be penalized with high insurance prices for years to come.”

Thouin made that comment during an interview about test data his firm released May 20. That data compares rates for male and female drivers in Toronto, Montreal and Calgary, all other factors being equal. For example, men between the ages of 17 and 19 in downtown Toronto were quoted rates 27% higher than women in the same age group. works both with direct writers and P&C brokers to deliver leads from consumers who are shopping online for home and auto insurance. ran test data for the same vehicle make through its own quoting engine, keeping many other variables (including marital status, employment status, kilometres driven and winter tires) constant.

“Gender, while it does play into pricing, is not even the most important factor,” said Thouin. In addition to not getting your policy cancelled for non-payment, two other key factors are not getting Highway Traffic Act tickets and not having at-fault claims, suggested Thouin.

Generally the disparity between quotes for men and women decreases with age. For example, in Toronto, men and women between 40 and 50, using’s test data, were both quoted $1,830.

Despite the Canadian Charter of Rights and Freedoms and provincial human rights laws prohibiting discrimination by gender, the Supreme Court of Canada upheld Ontario insurers’ ability to use age, gender and marital status as rating factors in Zurich Insurance Co. v. Ontario (Human Rights Commission), a divided ruling released in 1992. Initially, in 1984, the Ontario Human Rights Commission ruled in favour of Michael Bates, who had complained about his insurer’s use of age, gender and marital status as rating factors. But Zurich was successful on judicial review.

A key factor was Zurich’s argument that as of 1983, there was no “practical alternative” to using age, gender and marital status as rating factors. The top court did not rule on whether insurers had, by 1992, any practical alternative to using gender.

“Statistics are now being collected on a wide range of possible risk factors. This process was initiated in 1985 and would only have generated meaningful statistics in 1988,” Justice John Sopinka wrote for the majority in the 1992 ruling in favour of Zurich. “It may well be that there now exists a statistical basis for determining insurance premiums in a non-discriminatory manner. However, this appeal is limited to the situation as it existed in 1983 and not as it existed in 1988 or as it currently exists today.”

In dissent, Justice Beverly McLachlin noted that Ontario’s superintendent of insurance had been pushing since 1977 to stop discriminating against young males.

“The mere statistical correlation between a group and higher risk cannot suffice to justify discrimination on prohibited grounds. Such correlation accepts the very stereotyping that is deemed unacceptable by human rights legislation,” wrote Justice McLachlin, who later went on to serve 18 years as Chief Justice of Canada.

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3 Comments » for This ‘cardinal sin’ will increase your client’s auto insurance bill
  1. Dave Stauffer says:

    Removing sex as a rating factor, would result in an increase in rates for females. The same as removing age as a rating factor. It would increase rates for the older drivers. So is that not discriminating against those who as a group have safer driving histories? When you purchase insurance you are joining a group, and share in that groups overall claims experience. Most consumers think that it is not right for younger people to pay more for insurance, just because of age. That they should be entitle to the same rate. Not realizing of course that the older driver would pay more so that the younger may pay less. We have a take all comers rule in Ontario, yet insurers are allowed to deny entry into “groups” to protect their rates. The bottom line, is that premiums are required to pay claims, and the companies use many, many factors to determine individual rates. If some factors are removed to reduce rates for some sectors of the driving public, the rates must increase for others.

    • Brian Johnson says:

      Your comment is bang on. It would be unfair to penalize others that as a group are shown to be a lower risk and therefore should have lower rates. It’s not discrimination it’s simply charging the right premium for the risk.

  2. Darren McNeil says:

    On the other hand, perhaps insurers should rate all new drivers (male and female) as medium – high risk. Stick the actual sinners with bigger premiums after the offence, and adjust the rates favorably for the good drivers as they age and gain more experience.

    The poor risk drivers no matter their age or sex are always stuck with higher rates anyway, so equalizing the younger drivers premiums shouldn’t have much of an impact on the older drivers.

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