Hard Insurance Market: What You Can Do To Combat Increasing Rates

Insurance rates are on the rise in Ontario. Some of the leading factors contributing to increasing rates are fraudulent claims and increased claims costs as a result of higher property and vehicle values. In addition, severe weather events are leading to higher claims costs across the country. Below is a summary of the biggest claims events over the past two years and their estimated total claims costs.

Canadian Severe Events Claims Costs 2017-2018

April Ice Storm, Ontario $190,000,000.00
Flooding in Southwestern Ontario $57,000,000.00
Flooding in Windsor, Ontario $124,000,000.00
Winter Storm Eastern Canada $54,000,000.00
Fort McMurray Fires, Alberta $3,600,000,000.00
Wildfires, British Columbia $127,000,000.00
Total Costs $4,125,000,000.00

As your broker, we advocate for our clients to help minimize the impact rate increases have on your wallet. To help you understand what we can all do to combat increasing rates, we have summarized the leading causes of these increased rates below. In addition, we have outlined ways we can all help prevent further rate increases in the future.

Overall Insurance Rates

Cause
Solution
  • Increased claims costs due to fraud in the form of:
    • Staged accidents
    • Fraudulent practices by some businesses in towing, auto body repair, health, legal, etc.
  • General feeling that insurers “can afford it” and complacency to insurance fraud
  • Insurance industry and law enforcement working together to identify fraud, prevent fraud, and convict perpetrators.
    • Aviva is a leader in this – several investigations to raise awareness (ie. Health care practise and recent W5 investigation on auto claims)
  • Public help and awareness needed to identify fraud and prevent

Auto

Accident Benefits Claims Costs

Cause
Solution
  • Ontario has the most generous benefits in the country
  • Cost to administer claims still high
  • Fraudulent practices by some health practitioners
  • Pressure needs to be put on government and regulators to make changes to prevent fraud and change practices

Increased # of Collisions

Cause
Solution
  • Primarily due to increase in distracted driving losses
  • Higher penalties for distracted driving convictions
  • Some insurers now counting these tickets as major convictions (ie, WA)

What Can You Do to Reduce Your Auto Insurance Costs?

  • Take advantage of available discounts:
    • Multi-Line Discount: Insure your home and auto insurance are with the same company
    • Winter Tire Discount: install winter tires during winter months
    • Student away from home Discount: If you have an underage driver in the household who is attending school away from home
  • Review the use of your vehicle – if you are recently retired or driving less than in the past, we can save you money!
  • Licence status – any upgrade to your licence may save you money
  • Consider Your Payment Options – pay in full to avoid paying any service charges
  • Raise your deductible
  • Practice Good Driving – Drive carefully and avoid accidents and tickets
  • Avoid Distracted Driving – Put down the cell phones! Hand held devices cause accidents and expensive convictions

Property

Climate Change/Large Weather Related Losses

Cause
Solution
  • More severe and frequent events
  • Insurers collecting more data than ever to better understand each individual risk, predict losses, and price appropriately
    • The Intact Centre on Climate works with homeowners, communities, governments and businesses to identify, and reduce, the impacts of extreme weather and climate change.
  • Geographical analysis used to better predict weather patterns and possible resulting damage

Inadequate and Aging Infrastructure

Cause
Solution
  • Water/sewer lines can’t handle the increased amount of water
  • Public pressure on government to invest in infrastructure

# of Finished Basements Increasing

Cause
Solution
  • Trend to finish basements increases claims costs- increased finished sq.ft in house + below grade
  • Public education on water damage prevention
  • Installing back-water valve and sump pump

What Can You Do to Reduce Your Property Insurance Costs?

  • Update Your Broker – Be sure we are aware of any updates you have made to your home (new roof, furnace, water heater etc.)
  • Maintain a good credit rating – this may help you obtain better rates on your home insurance
  • Take advantage of property insurance discounts:
    • Mortgage Free – a discount is applied if you are mortgage free
    • Sump pump or back water valve – if installed a sump pump or back water valve, you could save $
    • Unfinished basement
  • Raise your deductible
  • Regular Maintenance – Keep your home properly maintained to avoid potential losses

Report Insurance Fraud

  • Fraud costs all of us – report incidents of fraud to the authorities to help curb future rate increases.
  • Use your Insurer’s network for preferred vendors – these partners work closely with your Insurer to ensure work is done right, at the right price, and guaranteed. This helps prevent fraudulent practices.

To report insurance fraud, call Crime Stoppers or visit the Insurance Bureau of Canada for details.

What is Mass Insurance doing to manage Ontario Insurance rates?

At Mass Insurance, we advocate on behalf of consumers to put much needed pressure on regulators to reduce claim costs, especially with respect to auto insurance. Reducing red tape and administration costs to settle claims is one of the hot topics in the industry.

As your broker we can:

  • Review your policy and make recommendations to help reduce costs
  • Quote your insurance with other companies to see how your Insurer compares
  • Group rate option! We offer great employee and association rates if you qualify. Speak with one of our brokers to find out more.

SAVE UP TO 30% ON YOUR INSURANCE TODAY

Mass Insurance Brokers

59 Main Street, North Markham, Ontario, L3P 1X7

Monday to Friday 9am to 5pm