July 20, 2005

Study shows Ontario drivers pay more for insurance

Ottawa, Ontario – A study by the Consumers’ Association of Canada released yesterday shows that Ontario drivers pay, on average, 45 per cent higher automobile insurance rates than those in British Columbia.

The release used 3,776,997 rate quotes across 300 diverse rating groups, and provides a detailed comparison of rates between Ontario, Alberta and British Columbia. The study shows that the average auto insurance rate in Ontario is $2,383, while it is $1,324 in British Columbia. The high rates are not confined to Toronto; they were also noted in smaller cities such as Thunder Bay, Sault Ste. Marie, Windsor, Sudbury, Kingston and Ottawa.

The study also shows that difference in rates do not reflect differences in policy coverage. It notes that in Ontario there is a government-mandated deductible of $30,000 on all injury claims, while in Alberta the government has mandated a cap of $4,500 on injury claims. British Columbia does not have these restrictions.

Among the study’s key findings:

  • Ontario has much higher auto insurance rates than Alberta or British Columbia, while Toronto has higher rates than Vancouver or Calgary.

  • Auto insurance rates vary significantly across the Greater Toronto Region.
  • Ontario has the highest auto insurance rates in larger cities, compared to cities in British Columbia, Alberta and Saskatchewan; it also has the highest rates in mid-sized cities and in smaller communities, compared to similar cities and communities in British Columbia and Alberta.
  • Vancouver’s auto insurance rates for a perfect driver are lower than any rate quote from any company in Toronto.

The Consumers’ Association noted a pattern among independent brokers which it says is “clearly not in the consumer’s interest”; a typical broker may only sell policies from one or two insurance companies, although there are almost a hundred operating in Ontario. “Many of these brokerage firms have financial ties to insurance companies, which limits real consumer choice,” says Bruce Cran, president of the Consumers’ Association. “An overwhelming compelling message has emerged from the Study for consumers in Ontario. Shop widely among many brokers and use the Internet to find the lowest auto insurance quote.”

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