Canadian auto insurance premiums have increased 12.2% nationally compared to this same time last year, while personal property (home) insurance rates are up 7.7% since 2023 Q3, per the latest quarterly Applied Ratings Index report.
“The results highlight an ongoing rising trend in premium rates for both personal auto and personal property lines across all provinces,” said Steve Whitelaw, senior vice president and general manager of Applied Systems Canada.
Alberta and Ontario are showing the largest auto insurance increases among provinces with private auto insurance markets. Alberta’s auto insurance premiums in 2024 Q3 jumped 12.9% over the same time last year, while in Ontario, auto insurance premiums rose 11.6% over the same period last year.
Meanwhile, home insurance premium rates in Ontario ballooned by 10.4% in 2024 Q3 compared to the same time last year. Saskatchewan and Manitoba home insurance rates increased by 7.6%, while home insurance rates in 2024 Q3 were 5.4% higher than in the previous quarter.
The Applied Ratings Index analyzes more than 1.3 billion insurance quotes completed in auto and home insurance, measuring increases or decreases in average premium rate trends across Canada. To derive the premium index, Applied uses the average of the three best final premiums of each risk quoted.
The Index does not include auto insurance premium rate information for provinces with public auto insurers (B.C., Saskatchewan, and Manitoba), although it does have home insurance information for these provinces.
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Long-term, auto rates in the third quarter of 2024 have increased by 31.1% compared with the beginning of January 2021. Auto rates have climbed steadily since the height of the pandemic, and at no time have they shown any signs of decline.
Data from Statistics Canada shows auto repair costs inflation is coming down from a high of 7.9% in 2022 to 2.7% in 2024, but it is still almost double the inflation rate of household goods measured by Canada’s Consumer Price Index (CPI). In 2023, auto repair cost inflation was at 5.8%, whereas CPI inflation was at 3.8%. Auto repair inflation costs have been routinely higher than CPI inflation for the past three years.
Home insurance rates seem to be hitting a plateau after three years of steady increases, per Applied Rate Index figures. For example, in 2024 Q2, home insurance rates nationally peaked at an increase of 25% over three years dating back to January 2021. But in the last quarter, 2024 Q3. Home insurance rate increases dipped slightly to 24.5% higher than rates in January 2021.
Stats Can shows inflation of building material costs for residential structures in Canada spiked to as high as 20.2% in 2022. That has since fallen dramatically to a 4.2% inflation rate in 2024. Still, that’s more than double the current rate of CPI inflation (1.6%).
Feature image courtesy of iStock.com/Henrik5000
