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  • Writer's pictureKathryn Slack

A hard market: why insurance premiums are trending up in Ontario

Have your insurance premiums gone up significantly in the last few years? You're not alone! Premium increases are driven by the reality of the new "hard market", which some say the Canadian insurance industry has been moving toward since 2018. In this article we'll explain the hard market, some factors causing insurance premiums to rise in Ontario, and how consumers can take control and save money.

What is a "hard" market?

A hard market is characterized by an increase in claims (losses) and a decrease in profits for insurers. As a result, insurance companies may be less inclined to take on new business, underwriting rules become more stringent, and premiums become more expensive.

When these changes result in strong profits again, there is more competition within the industry and the cycle returns to a "soft" market.

Factors Causing Insurance Premiums to Rise in Ontario

  • Cost of Auto Repairs - As newer vehicles are built with more advanced technology, repairs become more complex and more costly, sometimes exceeding the amount of premium collected.

  • Distracted driving - has become a leading cause of car accidents in Ontario. It is estimated that 8 in 10 accidents are caused by distracted driving.

  • Fraud - Both opportunistic and premeditated fraud rings have an immense impact on insurance premiums, especially in the auto insurance market. The Insurance Bureau of Canada estimates fraud costs Ontario drivers $236 each in premiums(1). Click here to learn more about the impact of insurance fraud.

  • Climate change - is increasing the frequency of severe weather events (floods, windstorms, ice storms, forest fires, etc.) which result in an increase of home insurance claims.

Do we have any control as consumers?

Tickets, convictions, accidents, and claims can all increase your insurance premiums. Surcharges or loss of discounts due to a claim, combined with generic increases in the current market, can result in significant premium increases.

Good driving habits can decrease your risk of a ticket or accident. Installing

water mitigation devices such as a sump pump or backwater valve can reduce

the impact of a water claim in your home (and often qualify for a discount on

your home insurance).

How can I save money?

Shopping around for competitive insurance rates is often disappointing and unsuccessful in a hard market, but there are still ways to save. Some suggestions include:

  • Working with a broker who has access to multiple markets and can shop for you!

  • Increasing deductibles

  • Decreasing coverage (where advisable)

  • Take advantage of multi-policy or multi-product discounts

  • Telematics/UBI programs in the auto insurance industry (i.e. My Driving Discount offered by Novex and Intact)

Contact your broker to discuss all of your options, they are best equipped to find the most competitive price while ensuring your insurance needs are met.



1 - Insurance Bureau of Canada (

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