Did the sanitary crisis of Covid, that shook Canada and the rest of the world since March 2020, stop the galloping rise of car insurance prices in Canada? In a new barometer, Hellosafe.ca show that the situation varies a lot from a province to another, through an analysis in 3 sequences:
- First, the analysis of the period from 2017 to 2019, where quotes have risen of 19.10% across the country
- Then, details about the rates changes quarter by quarter in 2020, with the Covid crisis as a sharp breaking point
- Lastly, a province by province forecast for auto insurance rates in 2021.
Car insurance rates increased by 19.1% between 2017 and 2019 in Canada
Canadians are often complaining about high prices of their auto insurance coverage and their constant growth year per year. But are they right? Overall, pre-Covid numbers (2017-2019) show that yes, auto insurance quotes increased across Canada. That's what the numbers show:
|Province||2017 (price taken in March 2018)||2018 (price taken in March 2019)||2019 (price taken in March 2020)||Change 2017-2019|
|Prince Edward Island||795$||817$||864$||8.68%|
|Newfoundland and Labrador||1,130$||1,168$||1,229$||8.76%|
- Even if Quebec is the province with the cheapest auto insurance rates in Canada - with an average quote of 798$ - the "Beautiful Province" is also the one with the highest increase in auto insurance prices before the Covid crisis (+17% from 2017 to the end of 2019)
- The Atlantic provinces have also been very impacted by this rise in auto insurance rates from 2017 to 2019, especially in Nova Scotia (+ 17.58%) and New Brunswick (+15.16%)
- Even if the increase was less important, British Columbia (+9.05%), Ontario (+11.69%) and Alberta (+12.3%) are the provinces where average quotes of auto insurance are the highest in Canada.
Overall slowdown in car insurance quotes increase in Canada in 2020
The Applied Rate Index provides the most recent data on auto insurance rates changes on a quarter by quarter basis - using a methodology based on 80% of the independent brokerage market and 675 insurer rating plans in Canada. This average quote rate change is calculated compared to the same quarter last year (Q1 2020 vs. Q1 2019, etc.)
Changes in auto insurance rates by quarter in 2020 (Source: Applied Rate Index)
Thanks to this data, it's clearly visible that the Covid-19 crisis, from March 2020 onwards, acts as a brutal stop to the increase of auto insurance prices across Canada. Indeed, after a 10.6% acceleration during Q1 2020 comparing to Q1 2019, the average auto insurance rates increase in Canada slows down in the next quarters: +4.7% for Q2; +1.3% for Q3 and even -2.6% for Q4.
Ontario, the Canadian province where car insurance rates decreased the most in 2020
However, those changes varied from one province to another:
- Ontario seems to be the winning province, with auto insurance rates decreasing faster than the rest of the country in all quarters: +6.4% for Q1, +0.8% for Q2, -1.7% in Q3 and even -3.2% in Q4! It's great news for the Ontarian drivers, given that their average car insurance rate is the second highest in Canada (after BC)
- Quebec also saw its average auto insurance quote rate increase at a slower pace than the rest of the country at the beginning of the crisis, i.e. during Q2 (+4.2%) and Q3 (-1.6%). However, prices appears to be on the rise again in Q4 (+1.6% vs. -2.6% for all Canada).
- On the contrary, Alberta and the Atlantic provinces, which are among the most expansive provinces for auto insurance coverage in Canada, are seeing a continuous auto insurance quotes rise quarter after quarter in 2020, although the increase is gradually moderating throughout the year.
- With an increase that still stands at +8% in Q4 2020, Alberta seems to be the Canadian province that was the least favored in 2020 for what regards car insurance rates changes.
2021’s car insurance rates in Canada: what to expect?
If the trend seems to indicate a halt to the increase in car insurance prices across Canada in 2020, what will happen in 2021? Again, this will depend on the specifics of each province. Here's a quick overview of what Canadian drivers should expect.
Ontario: a slight decrease in auto insurance rates to be expected for 2021
In Ontario, auto insurance companies must have their year-over-year quotes changes validated by the Financial Services Commission of Ontario (FSCO). Here are the changes that have already been validated by the FSCO for 2021:
|Insurance companies||Market share in Ontario||Quote variation validated by the FSCO||Effective date of application|
|Belair Insurance||14.61%||-1.85%||January 15, 2021|
|Commonwell Mutual||0.56%||-0.1%||March 1, 2021|
|The Co-operators||7.64%||0.34%||February 7, 2021|
|Gore Mutual||1.48%||-4.96%||January 1, 2021|
|Heartland Farm Mutual||0.31%||-0.42%||January 1, 2021|
|Intact||14.61%||-2.15%||December 18, 2020|
|Portage la Prairie Mutual||0.17%||-0.03%||February 1, 2021|
|Wawanesa||3.80%||-0.04%||May 1, 2021|
Thus, even though this table only lists one third of the car insurance market in Ontario for the moment, we can see that the trend goes towards lower prices. It's particularly interesting to see major players such as Belair Insurance and Intact (nearly 30% of the market share in Ontario between them) apply significant premium reductions (respectively -1.85% and -2.15% for 2021).
B.C.: 15% reduction announced on ICBC’s basic insurance rate
With its public auto insurance plan managed by the ICBC (Insurance Corporation of British Columbia), B.C. is the Canadian province with the highest quote (1,832$ on average) in 2021. In the midst of the Covid crisis, it has become very difficult for ICBC to justify maintaining such high prices.
Thankfully, in December 2020, the ICBC announced a 15% decrease on the "basic" car insurance coverage plan, effective May 1st, 2021. This decision was made in part due to pressure from the provincial government, which promised an overall 20% reduction in auto insurance quotes.
Atlantic provinces and Alberta: a moderate increase in quotes expected in 2021
For the 4 Atlantic provinces and Alberta, auto insurance quote increases are expected to continue in 2021, although at a much more moderate level than in the previous years. However, a decrease in the average auto insurance rates still doesn't seem to be happening in these 5 provinces.
Saskatchewan and Manitoba: public auto insurance players advocating for a decrease
Saskatchewan and Manitoba have this specificity of having a mandatory auto insurance plan controlled by the provincial government. In both provinces, efforts are being made to help drivers in 2021:
- In Saskatchewan, the SGI (Saskatchewan Government Insurance) has frozen any change in auto insurance quotes in 2021 because of Covid situation
- After an initial decrease in insurance quotes decided by the MPI (Manitoba Public Insurance) in 2019, the organization decided in June 2020 a further decrease of 10.5% for the coming year.
Quebec: auto insurance quotes should increase slightly in 2021
As detailed above, the beginning of a recovery in auto insurance quotes growth has been observed in Q4 2020 (+1.6%) in Quebec, after a Q3 marked by a downward trend (-1.6%). As the province with the lowest auto insurance rates, Quebec should see its auto insurance prices increase slightly in 2021, but much more slowly than before the Covid crisis.
This increase is justified by the increase in the average cost of claims. According to the Insurance Bureau of Canada, the average cost of claims in Quebec has risen from 3,559$ in 2008 to 4,794$ in 2018, an increase of 34.7% in 10 years.
How is the car insurance quote divided by coverage?
Here's how the average car insurance quote is distributed across Canada:
Collision or payout
Third party liability
- Pays the cost of repairing or replacing the vehicle, up to its value on the date of loss, if the vehicle is damaged due to unforeseen circumstances such as falling objects, vandalism, fire, theft or attempted theft, natural disaster, or civil disturbance.
- Pays the cost of repairing or replacing the vehicle, up to the value on the day of the loss, in the event of a collision with another vehicle, with the ground, or with an object on the ground.
- Damage to your automobile in a collision in Quebec for which you are not responsible
- Property damage caused to others for which you are responsible
- Property damage and bodily injury when an accident for which you are at fault occurs outside Quebec.
Third party liability coverage is required by the Automobile Insurance Act for a minimum of 50,000$. This amount may not be sufficient and can be increased to 1 or 2 million $ at your request.
Antoine Fruchard, director in chief at Hellosafe.ca
"An analysis of the car insurance rates chances in Canada shows quite clearly that the Covid crisis was a breakthrough, putting an end to the ever-growing rate increases of the past several years. Nevertheless, there are strong disparities between provinces, due in particular to the fact that the insurance systems are very different from one province to another. Even if car insurance quotes have increased less quickly - or even decreased - in Canada in 2020, we could see prices on the rise again in 2021, with the sanitary context expected to come back to normal step by step throughout the year. Nevertheless, in some provinces like Ontario or B.C., some insurance players have already planned to lower their rates, which is good news for consumers."
To elaborate this study, we have used data published by the GAA, the Canadian Insurance Portal and the Insurance Bureau of Canada. The data is not available for all provinces, depending on the rythme of publication of the numbers. The data collected is the most recent to date.
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.