Owning and driving a car isn’t cheap for students on a budget. There’s the cost of licensing, the car itself and auto insurance premiums.
Even though Ontario’s auto insurance is not government-run, it is overseen by the Insurance Bureau of Canada. Steve Kee, the Media and Digital Communications at the IBC, said “it is heavily regulated.”
“All insurers that operate and sell the product in this province must get their rates approved by the Financial Services Commission of Ontario,” said Kee. The FSCO oversees rate reviews and regulations. If an insurer wants to increase or decrease premiums, they must file the proposal with the commission.
Four key factors are reviewed to set an insurance rate: age of the driver, experience and history, the type of vehicle and the territory.
People aged between 19 and 21 have higher rates, and if someone has many tickets and collisions, the insurance rate spikes up. The older the vehicle, the cheaper the rating and the less expensive the vehicle is to repair.
“The GTA is typically higher on average than the rest of the province,” said Kee. “We have more cars on the road, we have more chances of collisions and it’s just really the population density.”
Allegra Ghiglione, 19, a first year culinary student at Humber College, wants to get her G licence to reduce her insurance rate.
“I don’t pay my [car] insurance. My parents pay it. I drive an older version of the XC70, so [the car insurance] shouldn’t be that much,” she said.
Iljona Kitolari, 19, a student at University of Guelph-Humber, got her license last year and said her parents pay for her insurance.
“I think it’s about $300 a month, but it’s easier to get to school than taking the TTC,” said Kitolari.
According to consumerinformation.ca, the Canadian government run website, auto insurance is sold from private companies in all three territories and most provinces except for British Columbia, Saskatchewan, Manitoba and Quebec, where auto insurance is government-run.
The average rates of insurance cost in Ontario are $1,920 while the average rate is $912 in Quebec.
“I like to think that a competitive market is the best market. In certain areas in this country, they have low insurance rates. In Atlantic Canada, on average you might see $700 to $800 for insurance. In Ontario, that number could be $1, 400 to $1, 500,” said Kee. If a collision happened “the actual cost of settling that claim in Ontario is often two or three times the cost that it is in some of the other provinces.
“We’ve seen a large amount of insurance fraud in Ontario. We also see lawyers who are quick to sue on behalf of their clients. We see tow truck operators that charge huge fees. We see four part medical clinics. All of these things add to the cost of insurance,” said Kee.