When Insurance Premiums Increase

In our previous article, we asked this question:

Where and when did the biggest art heist in Canadian history take place?

Answer: On September 4^th, 1972, thieves broke into the Montreal Museum of Fine Arts on Labour Day weekend, and made off with over $2 million worth of jewelry, figurines, and 18 paintings (worth $10.9 million today)?€? and they?€?ve never been caught! One of the paintings was a rare Rembrandt, estimated to be worth over $1 million alone. 

Did you remember this historical event?

Now for this post’s question!

True or False: If you switch to a more expensive car or a newer model of vehicle, your car insurance premium may increase.

We’ll reveal the answer in our next post!

It’s easy to get frustrated and have a gut reaction when your insurance premiums increase, but remember what your mother told you about getting angry? Take a deep breath, count to ten, and then look at the problem again.

Instead of freaking out and screaming at the universe’s cruelty (because the universe is out to get you, naturally), let’s take a quick look at some of the reasons why your insurance premiums might, indeed, see a change.

Increasing Claims Costs

With an increased amount of claims made, there’s an increase in cost associated with covering those claims that includes everything from medical expenses, to labour, to building materials. We’re seeing the costs of claims increase exponentially, particularly vehicle repair and rehabilitation costs associated with medical expenses.

Even if you’ve never made a claim yourself, if others have, that means the amount of available funds decreases?€?and this amount has to be made up somewhere. If it just so happens that during a given year there are numerous claims made on losses or accidents, everyone will have higher premiums the next year to ensure that the pool of available funds can be refilled.

Fraud Impacts You, Too

Sadly, fraudulent insurance claims aren’t a thing of the past, or found only in clichéd detective novels. Ontario is the richest source of auto insurance benefits in Canada, with the highest costs for drivers, making it a tempting location for auto insurance fraud.

Canada has actually seen an increase in accident fraud, where a collision may be staged between multiple parties looking to cash in on insurance claim payouts, or they may involve innocent drivers.

These schemes can go so far as to bribe witnesses, tow-truck drivers, or even medical responders, in order to have accident records falsified to benefit the “victim?€? and increase the insurance payout.

But There’s Hope!

Yes, your insurance premium may go up, and it may feel like there’s nothing you can do about it. However, each deliberate small act you take to protect yourself and help keep premiums down adds up that’s money in your pocket, and ultimately, greater security.

When you’re driving, remember all those things you ignored from your Driver’s Ed teacher. Defensive driving not only saves lives, but can translate into savings on your auto insurance. Many insurers are now offering discounts for people with clean driving records, which can put you in a good position from the get-go.

And how close do you live to your workplace? You may be eligible for a discount if you live under five kilometres away, since it significantly reduces the likelihood that you’ll get into an accident.

It’s also worthwhile to consider combining your insurance, so that the same company takes care of your home, auto, and other necessary insurance. Many companies are offering package discounts and multi-vehicle discounts that you could take advantage of.

Increased insurance premiums are frustrating all around, but an inevitable fact of life. Fortunately, with the steps outlined above, the inevitable doesn’t have to be quite so painful. Speak to your broker today, as there are many coverage options that could reduce your premium.  Your broker can ensure you are taking advantage of all the discounts you might qualify for!