With supply chain issues and inflation adding to the costs of everyday living, an increased insurance rate can be yet another expense to worry about.
Luckily, raised rates are not always set in stone. In the right circumstances, increased rates can sometimes be appealed.
First, it’s important to understand a few things.
Why might my car insurance rate have increased?
One of the more obvious reasons you might experience a rate hike is because of driving behaviour. If you receive a speeding ticket or you’re determined at fault in an accident, insurance providers can raise your rate once it’s time to renew your insurance, says Fernand Vartanian, general counsel at digital insurance company Onlia.
The same thing can happen if you have a habit of missing your auto insurance payments.
“There are a lot of behaviours that can cause harm in terms of a rate increase,” Vartanian says.
The other reason your rate might jump is if your insurance company turns to a provincial regulator asking for a rate increase to help cover claims costs, and gets approved. For example, with the new technology we see in vehicles today, the cost of repairs can go up, so your insurance provider might be in a position to raise its rates year over year. Your driving behaviour would be irrelevant in this scenario, but you still might see an increase in your premium.
How long does it take until your rate comes back down after an at-fault collision?
Should you switch insurance companies midway through your term?
What kind of rate hikes can be appealed?
When it comes to rate hikes that have been approved by regulators to help meet rising costs, you’re likely out of luck when it comes to making an appeal.
However, if you think a rate increase was made due to a mistake related to your driving behaviour, you have a greater shot of getting that increased rate reduced, Vartanian says.
The key here is to reach out to your insurance provider so you can fully understand why that rate increase happened.
For instance, perhaps an insurance company let past tickets or at-fault accidents influence your rate longer than they should have. Speeding tickets, for example, can impact rates for no more than three years. With at-fault accidents, that number goes up to six years.
Insurance companies are typically good at tracking that information, however, Vartanian says.
Another reason someone might contest an insurance rate is if they think an adjuster allocated more blame to them after an accident than they feel they should have received. Typically, someone is determined at fault on a scale of anywhere from zero to 100 per cent.
So, if you were determined 100 per cent at fault but believe it should have been 50 per cent, then you can question that fault determination, Vartanian says.
Here’s how to appeal a rate increase
To appeal a rate hike, you’ll want to visit your insurance company’s ombudsman office. Their role is to deal with complaints from policyholders about the company’s business practices, and to make any final reports on a complaint.
You could also file a complaint with a provincial insurance regulator, like the Financial Services Regulatory Authority of Ontario (FSRA), but that’s not really their purpose, Vartanian says.
Vartanian shared one example of a successful appeal: A driver was inaccurately determined 100 per cent at fault in an accident. The driver pleaded their case to the insurance company’s ombudsman, who then reviewed the circumstances of the accident. The ombudsman concluded that the adjusters were incorrect on this one: the driver was indeed only 50 per cent at fault.
If you wind up with a raised insurance rate and your appeal isn’t successful, all is not lost. One tool you always have in your back pocket is the ability to compare car insurance rates online. This will ensure, despite your circumstances, that you’re still getting the lowest rate possible.
LowestRates.ca is a free and independent rate comparison website that allows Canadians to compare rates for various financial products, like auto and home insurance, mortgages, and credit cards.