Article sponsored by the Insurance Bureau of Canada

Claims have gone up, as has the cost of auto repairs, over the past several years. With more claim payouts and higher costs, the premiums required to pay losses must be adjusted. This is what’s happening at the moment on the auto insurance market.

Auto repair costs

The greater use of in-vehicle technology, which directly impacts repair costs, is a key factor in explaining the higher auto insurance premiums. In fact, according the stats compiled by Groupement des assureurs automobiles (GAA), repair costs have risen 25% over the past 10 years. In fact, the average cost of repairing a vehicle after a collision was $3,500 in 2008, compared to $4,400 in 2017.

The arrival of driver-assistance systems, now available on more and more models, are changing our vehicles into veritable itinerant computers. Over the years, the technology has become more sophisticated and parts and labour costs have risen, driving up repair costs. 

Losses are up

Another explanation for the higher insurance premiums is the steady rise in claims volume and frequency. GAA stats confirm this. For the past two years, claims frequency and costs were up significantly. However, the premiums charged by insurers did not follow the trend.

Is there anything car drivers can do about this?

Yes, there is. In addition to the choice of the vehicle and insurance coverage, they can control the cost of their auto insurance:

Shopping around: The auto insurance market is very competitive. But they should make sure to compare the coverage being offered. 

Driving carefully: Of all the claims paid by insurers, the vast majority are for road accidents. Collisions can be avoided by adopting safe driving habits and being courteous on the road.  

Reducing distractions: For example, planning the route and programming the GPS before starting out.