Thousands of Ontario drivers are in their cars less and working from home more, provided they’re even working at all because of the pandemic. Even so, many auto insurance companies in the province are now increasing their rates.
“I would say the pandemic has been a windfall to the insurance industry,” said Naimesh Kotak, a lawyer and founder of Kotak Law in Mississauga, which focuses on personal injury cases.
"Consumers are not getting a good deal,” Kotak told Global News in an interview.
In spring, large and small companies offered temporary discounts and premium deferrals.
“It returned approximately a billion dollars to support affected drivers,” said Pete Karageoros, director of consumer and industry relations with the Insurance Bureau of Canada, which represents Canada’s auto insurance companies.
Those discounts ended in summer. Now, policyholders are starting to receive renewals that are marginally higher than last year.
“The rates that we are seeing as drivers in Ontario today are rates that are reflective of the driving and claims experience up to the end of 2019 and in 2020 before the lockdown,” said Karageorgos.
A York University professor who has researched the industry over several years says insurance companies are charging higher premiums than necessary.
“The overpayments are likely in the 10 to 16 per cent range on average,” said Fred Lazar, who teaches at the Schulich School of Business.
