Photo by Patxi Izkue
Recent claims that auto insurance rates may be rising dramatically are neither accurate nor supportable, according to the Insurance Bureau of Canada‘s (IBC) Ontario region.
The organization explained that Ontario’s recent auto insurance reforms are addressing cost pressures and working to stabilize the province’s auto insurance system.
It added the following:
- Information provided by the General Insurance Statistical Agency (GISA) and the Financial Services Commission of Ontario (FSCO) shows that Ontario auto insurance rates have been trending at the rate of inflation.
- Based on GISA monthly average data, premiums have increased by 2.5% per cent from May 2010 to May 2011. FSCO’s data for the first quarter of 2011 shows an average increase of 1.78 per cent. While there is still a requirement for insurers to increase their rates to match their underwriting and expense needs.
- The target range set by the Bank of Canada to contain inflation ranges from 1 per cent to 3 per cent.
“Auto insurance premiums that are renewed today can reflect rates that were requested up to one year ago,” said Ralph Palumbo, vice-president IBC, Ontario, in a statement.
“The tangible benefits of Ontario’s auto insurance reforms will take some time before they are realized by consumers. The good news, however, is that we are already seeing that premium increases, when they occur, are keeping pace with the rate of inflation.”
