26 June 2019

Why are car insurance premiums rising?

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Like many Quebecers, you may have been surprised to see your premiums rise when your policy was renewed. This has been an unfortunate fact of life for the majority of motorists as the increase in car insurance premiums is industry-wide.

Many of our insured members are asking us why. And they have a right to! Let’s look at the reasons for the increase and how it can be countered.


The damage insurance market has seen a steady increase in the number of claims and their average cost in recent years. Faced with this, most of Québec’s big insurance companies have reviewed their rates and increased premiums, particularly for car insurance. There are a number of factors that come into play in this sector.


Technology is everywhere in our lives—and our cars! It makes driving easier and more enjoyable, but also sends repair bills skyrocketing in case of an accident. Electronic components such as backup cameras, parking and windshield sensors, dashboards, and information and communication equipment are not cheap.

The more sophisticated the technology, the more difficult the repairs are for body shops, which need to invest a lot of money training their staff. For example, most cases require a diagnostic check of the vehicle’s on-board computer before any repairs are done. This results in an increase in the average body shop invoice.

New trends in car manufacturing

Car manufacturing has also changed. New trends have emerged across Canada over the last few years. Vehicles are safer, more economical, and eco-friendly. And while these changes are positive, they also push up the cost of vehicle repairs.

Automakers are using more next generation materials that are lighter and provide better fuel economy. Once again, specialized repairs are required for each type of alloy, which in turn increases costs for body shops.

Distracted driving

New onboard technologies combined with cellphone use are causing a growing social phenomenon: distracted driving. Statistics show that drivers are clearly more distracted. We are seeing an increase in accidents and car insurance claims. And the more claims there are, the higher premiums climb, and as repairs are expensive… you get the picture. There a number of interrelated factors at play.


Is there anything you can do to keep your premium down? Can you swim against the tide? Actually, there are things we all should be doing. Many are beyond our control, admittedly, but we can all help cut down on accidents and reduce premiums.

Initiatives are being taken by both government and industry to raise awareness among motorists of the consequences of distracted driving, and to promote good driving habits. At Promutuel Insurance, we play a part in this collective effort, in part by reminding people how important prevention is.

We hope we have answered your questions about rising car insurance premiums. One of the jobs we as insurers have is to find a balance between insurance rates and the cost of repairs. To learn more and gets tips on how to save on your auto insurance, such as combining it with your home insurance, contact one of our agents.