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What Causes Insurance Premiums to Rise? Online Resources Examine Multiple Factors

What Causes Insurance Premiums to Rise? Online Resources Examine Multiple Factors

If you reside in Canada today, you probably wonder how the recent legal changes permitting the use of recreational marijuana will impact your auto insurance premiums.

A recent survey reported some 91% of Canadians held concerns about this issue. As a demographic group, Millenials felt even more uncertain over the outcome of the new legislation than other people: fully 94% wonder what, if any, impacts the law will have on their premiums.

Fortunately, online research allows consumers to check auto insurance premiums, credit card rates, mortgage rates, and loans.

Doing your homework for you

Various websites collect information from a variety of companies engaged in business and finance in North America, and then use this proprietary data to establish an index to permit members of the public to track increases (or decreases) in average rates in Alberta, Ontario, and the Atlantic Maritime provinces.

For example, LowestRates.ca offers an index to evaluate the average auto insurance premium paid by drivers insuring a single vehicle since the first quarter of the year. Consulting this Auto Insurance Price Index can help you evaluate if you pay above or below average rates for your geographic location.

Why does this information matter? In the case of auto insurance premiums, the evidence suggests the typical Canadian driver may find rates increasing in the near future. During the past year, average rates in Ontario have risen by 12.21% for female drivers and by 9.67% for male drivers. This large province has witnessed the most significant auto insurance increases tracked. Average rates have also risen to a lesser extent for many drivers in Alberta and the Maritime Provinces.

Explaining auto insurance premium increases in Canada

The collection of raw data by third parties may hold value for analysts seeking to evaluate the impact of new legislative changes. Some experts have surmised the legal change allowing the recreational use of cannabis may eventually result in higher auto insurance premiums for many Canadians. This development may result largely from an increased risk of encountering roadway accidents.

They frequently cite data gathered in the United States by the Insurance Institute for Highway Safety. That entity recently released a report indicating U.S. states which have chosen to legalize pot for recreational purposes have witnessed a 5.2% higher accident rate than adjoining jurisdictions which enforce marijuana prohibitions. Rising accident rates often compel insurance companies to raise their premiums.

A useful financial planning website

Regardless of their views on the legalization of recreational cannabis, drivers in Ontario, Alberta, and the Maritime Provinces discover a wealth of insights by shopping for car insurance online. While the average rates don’t necessarily impact an individual driver, this data does help reveal past and present trends. People interested in resolving uncertainty about the impacts of new legislation can often discover helpful clues in financial rate data.

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The post What Causes Insurance Premiums to Rise? Online Resources Examine Multiple Factors appeared first on Modest Money.

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