Why do car insurance rates increase?

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It’s time to renew your car insurance. You’re surprised to see that the rate has increased. Why’s that? Here are some possible explanations.

A change in your situation

The amount you pay for your car insurance varies according to a number of factors. Any changes may affect the rate.

  • You drive your car more. For example, are you driving to work now, rather than taking public transportation?
  • A new driver was added. Did you add a child who just got a driver's licence and will occasionally drive the car?
  • You filed a car insurance claim. For example, you had a fender-bender in a parking lot. Statistics indicate that it is likely that another claim will be filed in the coming years.

These changes to your situation may affect the rates you pay for car insurance.


Issues not related to your situation

Other issues not related to your situation may cause car insurance premiums to increase.

An increase in the cost of car parts

Car technology is becoming more complex. Therefore, it becomes more costly to repair or replace certain parts such as back-up cameras, blind-spot monitoring systems or sensors for detecting air pressure in tires. This causes the average cost of insurance to increase a bit every year.

More skills training

Given that technologies are more and more sophisticated, mechanics must receive ongoing training in how to repair damaged vehicles and replace broken parts. The cost of this training must be included in the calculations.

Shortage of labour power

It’s no secret: The shortage of labour power affects many sectors, including the car repair business. This means the cost of the services of a car mechanic or an auto body repair mechanic is higher, since wages have increased to attract new employees. The final bill for a claim may be higher for this reason.

Increased cost of damage

For car insurance, the cost of claims has increased for the reasons cited above, such as increased costs for labour power and car parts. According to the Groupement des assureurs automobiles (GAA), the average cost of claims due to collision increased by 14% in 2022, causing your insurance rates to increase.


Climate change

Weather events are the reason for more and more claims every year. They impact the frequency and cost of home and car claims. There are a number of extreme environmental events that might cause you to file a claim, such as:

  • A flood that damages your car
  • Hail
  • An ice storm
  • Gale-force winds
  • Heavy rainfall
  • Winter conditions such as a snowstorm that affects visibility and creates unsafe driving conditions

In conclusion, there are many reasons, some you can control, but others over which you have no control, that can cause your car insurance rates to change.