Marie-Claude Dulac

By Marie-Claude Dulac

May 22, 2019


Why does your auto insurance cost more?

Article revised on 22 May 2019

You receive your auto insurance renewal and notice that your premium has increased. If you made a claim over the previous year or notified your insurer of changes, you were likely expecting the price hike. If not, you may be wondering what caused the increase. Here’s what you need to know!

There are many possible causes for an insurance rate increase at renewal. They can occur as a result of a change in your file, but also other factors beyond your control that cause notable increases with all insurers and unfortunately affect all Quebec residents.

Changes to your insurance file

Your premium rate is personalized. It is recalculated at each renewal and takes into account all relevant information in your file, such as:

  • How the vehicle is used
    If you add new drivers to your car insurance, for example, or change the mileage travelled during the year, these changes will be reflected in the new price.
  • Claims or accidents during the last year

Why? Because statistics prove that in the years following a loss, the likelihood of incurring another loss is greater.

External causes over which insureds and insurers have little control

Various external factors can cause an auto insurance rate increase in Quebec. Here are the major ones:

1. Increase in the price of parts and labour

The cars on Quebec roads are more often than not equipped with modern technology such as sensors for air pressure in tires and devices for detecting blind spots or staying in your driving lane.

These technological devices are easily damaged upon impact and require:

  • The purchase of costly replacement parts
  • More complex and longer repair work, partly due to the calibration of the vehicle’s various sensors
  • Ongoing training expenses for mechanics
  • The purchase of state-of-the-art equipment

The shortage of specialized labour also causes an increase in salaries which directly impacts the fees charged by garages.

This increase in automobile repair costs is passed on to the amounts paid in the event of claims.To be able to adequately cover their clients, insurers have no choice but to increase their rates.

2. The increase in claims

According to theGroupement des assureurs automobiles(GAA), the number of auto claims has increased in recent years. The many sources of distraction drivers are exposed to today, mainly related to the use of cell phones while driving, increase the probability of road accidents.

3. Climate change

Extreme weather conditions are more common, which also impacts the number and value of auto insurance claims.

  • Flooding
    Over the last several years, more and more Quebec residents have been affected by this type of natural disaster. It stands to reason that an increased number of vehicles have also been damaged.
  • Hail, freezing rain, heavy rainfalls and violent winds
    Increased hail, freezing rain and violent winds are causing more collisions and damage to the bodies of cars.
  • Extreme winter conditions
    Extreme winter conditions, including greater variations in temperature, also cause an increase in auto insurance premiums. For example, during extreme cold spells, abrasive products are less efficient, and there is an increase in car accidents.

How can you limit price hikes?

Here’s our advice to get you a fair price for your auto insurance and to take advantage of all the possible savings available to you!

Want to avoid a premium increase, after an auto claim? It’s possible!

7 Tips to Get a Quality and Affordable Car Insurance

8 Reportable Changes When Renewing Your Car Insurance

Additional resources:
Infoassurance – Why is my premium going up?

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