Car Insurers Could Save Up To $6.7 Billion in Canada In 2020 Because Of Covid-19 Pandemic

$ 6,683,102,669

…is the estimated amount of savings on payouts realized by the car insurance companies in 2020 across Canada because of the Covid-19 restrictions, as most drivers had to stay home large parts of the year across the country.

Car Claims Drop In displayInfo.name

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Savings made by Canadian car insurers during restriction measures

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Annual average car insurance premium

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Overall numbers as for Canada
Total car insurance payouts in Canada as for 2019$ 20,323,032,100
Average claims number decline across Canada during 202032.9%
Estimated total car insurance payouts in Canada in 2020$ 13,639,929,435
Estimated savings made by car insurers in 2020$ 6,683,102,669
Estimated car insurance savings in 2020 in Canada (HelloSafe estimates)

26,7% drop in car accidents

With most Canada’s provinces facing restriction measures during spring and again in autumn / winter, many Canadians were forced to stay at home. As a consequence, many daily commutes came to a halt, meaning fewer people on the roads, and a lower probability of accidents occurring. That’s confirmed by the numbers :

26.7%
decrease in car accidents
 

…across the Canadian territory

32.9%
decrease in car-related claims


…due to low traffic on the Canadian roads

$ 2.8 billion
saved

…during the only first spring spike pandemic period (mid-March to mid-June)


32.9% fall in car-related claims across Canada

As a consequence of accident numbers decreasing on the roads, the car-related claims rate has dropped by – 32,9% overall on the Canadian territory . With a 35.1% decrease rate observed, Ontario is the State where car claims have decreased the most, just in front of British Columbia (- 34%) and Quebec (- 33.6%). On the opposite, Nunavut (12%), the Northwest Territories (11.2%) and Yukon (7.8%) were less affected by the governmental restrictions, and are the regions where claims decreased the less.

Car insurance savings per province (8 most populous provinces)

Overall, insurance companies in Canada could have actually saved up to $6.7 billion thanks to the change in driving habits caused by restriction measures.

  • The Canadian State accounting for the highest savings is Ontario, with an estimated $2.73 billion reduction in payouts by the insurers. The province of Quebec ranks number 2, with an estimated $1.59 billion saved by car insurers there, in front of British Columbia (913 million) and Alberta (745 million)
  • Usually, motor insurers put aside ⅔ of premiums to cover road accidents. However, the reduction in the number of accidents has cut that  proportion significantly. One big car insurance player has told Hellosafe.ca that it will save as much as half the funds it expected to have to pay out for personal injury claims in 2020.

Toronto, on top of the cities where savings are the highest

A majority of road traffic accidents usually happen in dense urban areas. It is therefore no surprise to see that the biggest cities are those where car insurance savings on payouts have been the highest:

  • The Toronto metropolitan area amounts to almost $1,4 billion savings in car insurance payouts in 2020 – concentrating alone one fifth of all the savings made in the country in the same period of time
  • Then come in the ranking the metropolitan areas of Montreal ($718 million saved), Vancouver ($500 million), Calgary ($231 million) and Edmonton ($196 million).
CitiesProvinceDecrease rate (2019-2020)Estimated savings on car insurance payouts in 2020
Toronto (Metro)Ontario37.5%$1,391,430,124
Ottawa-GatineauOntario / Quebec36.8%$210,569,610
MontrealQuebec35.3%$718,340,861
Vancouver (Metro)British Columbia35.1%$499,578,491
Quebec CityQuebec33.3%$135,756,292
CalgaryAlberta32.3%$230,777,170
EdmontonAlberta31.9%$195,931,867
WinnipegManitoba29.0%$119,370,060
HalifaxNova Scotia28.1%$51,453,974
SaskatoonSaskatchewan27.9%$39,550,701
FrederictonNew Brunswick27.8%$16,356,300
ReginaSaskatchewan27.6%$34,250,325
St. John’sNewfoundland and Labrador25.1%$25,893,900
CharlottetownPrince Edward Island24.1%$10,691,388
Savings on car insurance payouts in 2020 per city (HelloSafe estimates)

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Antoine Fruchard, insurance expert and CEO at Hellosafe.ca

With most people stuck at home, their cars have inevitably stayed in the garage. Indeed, customers are inevitably questioning why they continued to pay such high insurance premiums while they weren’t able to drive. It will be interesting to see if all the insurance companies will make refunds, and which forms will take those refunds. Competition on the market should increase in the coming months, and that means customers should benefit from a slight drop in car insurance premiums. However, in certain provinces such as British Columbia, the presence of (almost) car insurance monopolies is problematic, not allowing policyholders to benefit from a diverse offer which would result in lower premiums for them”.

Our methodology

We based our study on public information provided by reliable data-providers and several insurance partners who provided us anonymously with claims for the studied period.

About Hellosafe.ca

Hellosafe.ca is a comparison platform which is shaking up the insurance market – giving you access to the best Canadian insurance deals in less than 30 seconds. Hellosafe.ca is supported and financed by Blue, an Insurtech Venture Capital firm. Blue already owns two leaders in the French insurance comparison market, Réassurez-moi and Coover. These platforms help more than 10 million people with their insurance every year. We have developed a unique comparison technology that gives access to cover details and quotes without customers having to give their phone number or email address. This engine is the result of four years of hard work.

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