Do you wonder why your premiums sometimes change, or why auto and home quotes are different from one insurance company to the next? We understand that it can seem confusing as there are several factors involved in determining rates.
Calculating risk levels
Insurance rates, called premiums, are based on risk, or the potential that someone will make a claim. The greater the risk, the higher the premium - the lower the risk, the lower the premium. To set rates, we study the claims history of groups of people with similar characteristics and then add information about your particular history to determine the exact premium.
For example, home insurance rates will reflect:
whether your neighbourhood is prone to sewer backup
the crime rate in your neighbourhood
how close you live to a fire station and fire hydrant
the value of your personal property
your insurance history
the claims history of your property
Auto insurance rates will reflect:
safety and theft statistics for your area
the safety features and statistics of your vehicle
the year, make and model of your vehicle
whether you commute to work or use your car for personal or business purposes
how many driving offences you’ve had, including past at-fault insurance claims
how many years you’ve been driving
Your rates can also vary depending on if you qualify for any discounts, how much coverage you decide to purchase and the deductibles you choose.
Federal and Provincial regulations apply
Government regulations, taxes, and the cost of health care also affect rate calculations; as these costs change, so do premiums. Likewise, changes in court awards, towing fees, repair costs, insurance fraud, and more frequent and severe storms have all influenced rates over time.
Calculating risk levels
Insurance rates, called premiums, are based on risk, or the potential that someone will make a claim. The greater the risk, the higher the premium - the lower the risk, the lower the premium. To set rates, we study the claims history of groups of people with similar characteristics and then add information about your particular history to determine the exact premium.
For example, home insurance rates will reflect:
whether your neighbourhood is prone to sewer backup
the crime rate in your neighbourhood
how close you live to a fire station and fire hydrant
the value of your personal property
your insurance history
the claims history of your property
Auto insurance rates will reflect:
safety and theft statistics for your area
the safety features and statistics of your vehicle
the year, make and model of your vehicle
whether you commute to work or use your car for personal or business purposes
how many driving offences you’ve had, including past at-fault insurance claims
how many years you’ve been driving
Your rates can also vary depending on if you qualify for any discounts, how much coverage you decide to purchase and the deductibles you choose.
Federal and Provincial regulations apply
Government regulations, taxes, and the cost of health care also affect rate calculations; as these costs change, so do premiums. Likewise, changes in court awards, towing fees, repair costs, insurance fraud, and more frequent and severe storms have all influenced rates over time.