As Ontario extends its state of emergency for the umpteenth time, banks have begun offering deferred mortgage payments and credit card interest rates that have been slashed in half. What are insurance companies doing to support Canadians through the COVID-19 pandemic?
How Much Can I Save?
If you’re like most Canadians, social distancing measures are keeping you contained in your home and your car contained in the driveway. If you’re driving much less than you normally do, shouldn’t you be entitled to a reduced auto insurance rate?
In April, the Ontario Provincial Police reported a 62 percent drop in collisions in and around the GTA compared to the same period last year. Accident rates have changed dramatically from 2019 to 2020—why haven’t car insurance premiums?
By now, it’s clear that the policies that consumers currently have were determined long before lockdown. In early April, the
Insurance Bureau of Canada announced that its member companies would offer car insurance premiums reflecting reduced risk, which could result in up to $600 million in savings.
But relief is rarely as straightforward as it sounds. Discounts and rebates aren’t uniform across companies—neither is eligibility criteria.
What Kind of Adjustments Have Been Made?
Auto insurance rates are heavily regulated in Canada. But between the rules and guidelines, insurers themselves are deciding how to handle discounts—whether that involves refund cheques, credit, or deferred payments.
Things are still fluid. In mid-April, the government of Ontario introduced a regulatory change under the Insurance Act that would enable insurance companies to offer premium rebates to consumers for up to 12 months following the end of the COVID-19 emergency. But without a strict percentage, companies have been left to explore options on their own.
Companies’ approaches fall into three categories: those who aren’t offering relief at all, those relying on customers to be proactive, and those who are automatically reducing premiums for all customers, regardless of whether they’re driving less.
Companies relying on customers to make the first move expect to be notified by policyholders whose circumstances have changed. If your car has been collecting dust in the garage and you haven’t been included in a blanket reduction, give your insurance broker a call.
On top of discounts, some insurers have come up with flexible payment plans for customers struggling to make ends meet during the pandemic. But what if none of that is enough?
Should I Remove My Coverage Altogether?
For those of us who have lost income and aren’t on the roads anymore, cancelling your auto insurance to save much-needed funds sounds tempting. While backing out completely is always an option, it might not be the best one.
Without auto insurance, you have to pretend your car doesn’t exist. Even in emergency situations, driving an uninsured car in Ontario can land you a $25,000 fine. Moreover, if you’re planning to deactivate coverage only temporarily, reactivating in the future could be more expensive.
Instead of cancelling altogether, call your insurance broker and ask about cutting back coverage you don’t need at the moment, such as travel coverage.
Of course, find out from your insurer if you’re entitled to a discount—because many customers are.
Questions About Your Coverage?
The team at
Cane and Co. Insurance is here to help you make sense of what discounts you may be entitled to during the COVID-19 pandemic.
We can help you explore options for reducing your monthly premiums while still keeping you covered. Give us a call at 519-601-1100.
