Car insurance premiums are expected to continue rising in 2024, with increasing inflation and widespread car theft, according to a new report.

In its 2024 car forecast, Ratesdotca indicated that the regulator in Ontario has already approved price increases for about twenty insurance providers in the first quarter of the year.

Daniel Evans, an insurance expert at Ratesdotca, said, “We are seeing increases of up to 25 percent,” which is much faster than usual.

He added that whether your car insurance is rising or not depends on “how it was last year for each individual provider,” and the average annual premium in the GTA is $2,391, according to the latest figures from the provincial insurance regulator, and a 25 percent increase would raise the average annual cost by about $600.

The Financial Services Regulatory Authority of Ontario (FRSA) said it is working on reforming insurance pricing and underwriting regulations to better protect consumers. This strategy is expected to be announced later this year.

Evans added: “With rising interest rates, and with increasing inflation, the average claim payout is much higher, and with the increased cost of claims, it is clear that more funds are needed to finance those claims in the future.”

Experts expect inflation to begin to decline this year, but this is not the only factor affecting insurance prices. The cost of servicing and replacing vehicle parts has increased as the technology itself advances, according to the Ratesdotca report, which also points out that supply chain disruptions have led some companies to temporarily halt production.

However, one of the biggest cost drivers is car theft. Canadian insurance companies paid out more than a billion dollars in claims for the first time in 2022, according to the Insurance Bureau of Canada (IBC). Claims from the GTA alone accounted for half of that amount.

More than 80,000 cars were stolen in Canada last year, according to IBC. In Toronto, 12,200 car thefts were listed in 2023 on the major crime indicators dashboard of the Toronto Police Service.

At the provincial level, claims related to stolen vehicles rose by 329 percent between 2018 and 2022, increasing from $160 million to $700 million. The IBC estimates that car theft costs each driver in Ontario about $130 annually.

The province and federal government spend millions of dollars to eliminate car thefts, but this is unlikely to affect your insurance premiums in the near future.

Evans recommends that car owners contact their brokers to find out about available discounts, adding that some companies add an extra $500 fee to insurance premiums for cars listed as commonly stolen vehicles, but some companies waive this if the customer installs anti-theft technology in their vehicle.

Evans said insuring multiple vehicles under one company, bundling different types of insurance, such as home and car, and choosing to use apps that track drivers and reward safe habits can save between 10 to 30 percent on insurance premiums.

He recommends contacting your service provider to learn more, warning against opting out of direct compensation property damage coverage, which is no longer mandatory in Ontario, because in the event of an accident that could mean a big bill. It could also mean a higher premium in the future.