The Financial Services Commission of Ontario (FSCO) released its first quarter rate approvals today April 13, 2012. The approved changes resulted in an average decrease of .18% for the entire market based on requests of 17 different provincial insurance companies. The rate changes varied from an increase of 5.39% to a decrease of 4.46% with slightly more decrease requests resulting in the overall decline in Ontario auto insurance rates.
Some of these approved changes have already taken effect with the remaining changes to be implemented by the end of July. According to Anne Marie Thomas of InsuranceHotline.com, each insurance company’s rate changes are aggregated resulting in the overall percentage change. “Insurance rates for one company may have gone up in Sudbury but decreased in Oakville; hence, the rate changes reported are the average of all the changes made to various profiles and locations” says Thomas.
According to FSCO “rates vary from company to company because each company basis its rates on its own claims costs and uses a different set of risk characteristics to determine the rate for a specific consumer.” Thomas explains that each company must file a proposal for a rate change with detailed support outlining the rational for the change. “While each request may eventually get approved, it may not be the original proposed rate change that gets accepted as there is a long discovery and review process.”
The last time the market saw a similar decline in auto insurance rates was the third quarter rate approvals of 2010. At that time rates went down by .21% and since then they have increased quarter over quarter at an average of 3.12%. According to Thomas, “It appears that the auto insurance reforms of September 2010 are starting to take effect and hopefully this is the beginning of rate stabilization in Ontario. This is a great time to compare your insurance rate to see how these changes may impact your insurance costs.”