Car Insurers Could Save Up To $2.7 Billion in Ontario In 2020 Because Of Covid-19 Pandemic

$ 2,730,266,633

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

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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29.1% drop in car accidents across Ontario

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 :

29.1%
decrease in car accidents
 

…across the Ontarian territory

35.1%
decrease in car-related claims


…due to low traffic on Ontario’s roads

$591 million
saved

…only in the city of Toronto


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 highest:

  • The City of Toronto amounts to more than $591 million savings in car insurance payouts in 2020 – which is the greatest total among all the Canadian cities
  • Then come in the ranking the cities of Ottawa ($200 million saved), Mississauga ($152 million), Brampton ($126 million) and Hamilton ($111 million).
CitiesDecrease rate (2019-2020)Car insurance savings in 2020
Toronto37.5%$591,411,891
Ottawa37.0%$199,955,984
Mississauga36.4%$151,828,441
Brampton36.6%$125,697,422
Hamilton35.6%$110,614,639
London34.1%$75,735,157
Markham35.2%$67,019,929
Vaughan33.7%$59,724,422
Kitchener35.3%$47,589,592
Windsor35.5%$44,620,376
Richmond Hill35.8%$40,401,280
Burlington34.8%$36,856,827
Greater Sudbury33.3%$31,124,189
Oshawa32.9%$30,356,979
Barrie33.8%$27,600,132
St. Catharines34.2%$26,316,434
Guelph33.1%$25,226,024
Cambridge34.5%$25,873,680
Kingston32.8%$23,452,240
Thunder Bay34.4%$21,436,526
Waterloo32.5%$19,746,494
Brantford32.0%$18,058,752
Pickering34.3%$18,188,744
Niagara Falls29.9%$15,212,333
Peterborough34.3%$16,075,763
Kawartha Lakes28.9%$12,614,790
Sault Ste. Marie31.0%$13,152,800
Car insurance savings in 2020 in Ontario (HelloSafe estimates)

On a national scale: 32.9% fall in car-related claims across Canada, $6.7 billion saved on payouts

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.

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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, 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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