Year after year, you renew your insurance contract without asking yourself too many questions. You are, in fact, quite willing to accept a small yearly increase in order to avoid the lengthy process of going around insurance companies to find new coverage. In 2019, however, you were in for a SURPRISE! Like many Quebeckers, you likely saw a major hike in your car insurance premiums. Assurances Multi-Risques would like to explain the reasons behind this sharp price increase in the province’s car insurance industry.
Why did car insurance premiums go up?
Of course, buying a new car is always more exciting than getting it insured. As you know, however, getting adequate coverage for your new car is a good way of protecting your investment in case of damage or accident, and the key to driving around without a care in the world! When your premium goes up all of a sudden, however, it’s normal to ask why and if this price increase is justified? Here are the reasons behind 2019’s car insurance premium increase.
According to data from Groupement des assureurs automobiles, the price of the average car insurance premium in 2007 was $566. In 2017, it was $564. That means that the average car insurance premium went down $2 over a 10-year period. Over this same 10-year period, however, the average claim for material damages rose by 17% while the average civil liability claim went up by 41%. Moreover, the cost of repairs also increased during this period due, in part, to the multiplication of electronic equipment in cars. Finally, the frequency of accidents, and therefore of insurance claims, also went up by 6% over this same 10-year period.
All of this means is that, over the last few years, Quebec car insurers have not been able to adequately support their industry because of a shortfall in insurance premium revenues. Insurers are held to due diligence and must make sure to be able to adequately compensate client claims, hence the increase in car insurance premiums.
If you would like more details on this topic, please have a look at two very interesting articles (in French only) published by TVA Nouvelles and the magazine Protégez-vous.
How can you reduce your car insurance premiums?
We have already published an article on this topic. To have a look at it, please click here.
In a nutshell, if your car insurance has gone up considerably in 2019, it might be the right time to contact an independent insurance broker who will not only shop around for a better price, but will also have an in-depth look at your current contract, update your information, find the best insurance coverage for you, and make sure that there are no loose ends that could cause you problems down the road. While your broker is doing all the work, you’ll have time to engage in something more pleasant, like going for a long ride for example