The Canadian Auto Association (CAA) has taken an aggressive approach to Ontario's Auto Insurance Cost and Reduction strategy-lowering third quarter rates by more than ten times the provincial average.
In August 2013, the Ontario Liberal government unveiled its plan to lower auto insurance rates an average of 15% over the next two years. Drivers will start seeing results before then, however. It is estimated that car insurance rates will have decreased an average of 3% to 5% by January 2014, with incremental decreases from there on out.
Many policy providers are jumping on this opportunity now in an effort to attract new customers and beat the insurance shuffle-which means there has never been a better time to start shopping around on your car insurance.
"Ontario has the highest auto insurance rates in the country. Bringing those rates down by reducing fraud and unnecessary industry costs will save millions in payouts and help control premiums," says Matthew Turack, VP of CAA Insurance Company (Ontario)."With our proposed rate reduction, ongoing work to eliminate insurance fraud and the introduction of new technologies, we hope we can lead by example and pass the benefits on to those drivers of good standing."
The Financial Services Commission of Ontario (FSCO) regulates auto insurance in the province. Third quarter findings report that insurance rates declined by an average of 0.68% across the entire market from July 1st to September 30th 2013, but the CAA Insurance Company (Ontario) beat the average rate reductions tenfold. Rates were reduced an average of 7.15%.
KANETIX sees this dramatic rate reduction as one of the first moves by an insurer to capitalize on the mandated rate decrease.
"The rate decreases will happen in three waves early in 2014," says Sean Graham, principal broker at KANETIX. "Early indications are that the first major decreases could happen sometime from January to March. Some of the more profitable insurers are asking FSCO for more time to get ready to implement the new changes and are backing off an earlier commitment to drop rates in January. Expect a lot of rate decrease in March to August. It's possible that a few opportunistic companies will try something like CAA and drop rates earlier to gain market share, but that all remains to be seen and there are no indications as to who might do this."
Rate reductions will be seen upon renewal-so if you're up for renewal in the coming months you'll be the first to experience the changes. Depending on your current provider, however, you may not be getting the best bang for your buck. For those considering a switch, Graham has some advice.
"Shop your insurance policy on renewal because rates will vary severely from company to company," he says. "It's important to note that this 15% rate decrease is an average. If you're a good driver and haven't seen your 15% then you should not only shop around, but also keep an open mind about new technology such as Usage Based Insurance programs, which will reward good drivers for their good driving habits. These will start popping up on the landscape as insurers look to sort the bad drivers from the good and reward them with fairer insurance premiums."
Use your renewal as an opportunity to compare car insurance quotes and shop around for the plan that's right for you. If you're not up for renewal, it's possible that even with a mid-policy cancellation fee you'll still be saving money if you switch providers. Know for sure: Shop the market for your auto insurance through KANETIX.ca and start saving today.