Why is the Hard Market Making my Insurance More Expensive?

Nov 7, 2019 3 minute read

Why is the Hard Market Making my Insurance More Ex...

We know how frustrating it is to be a great driver, with no accidents on your record and still have your insurance rates go up. How is that fair? How does that make sense? It’s like if you’ve been doing a great job at work for a year, and come review time, your boss gives you a pay decrease!

We get it. We need insurance just like you, and we are experiencing the exact same thing. As brokers, we do our absolute best to save our customers as much money as possible. But the reality is that insurance has become more expensive. This is because the Canadian insurance industry is currently in what's known as a "hard market".

What is a hard market?

During a hard market, insurance premiums are higher and there are limits to what insurance companies will cover. Some companies might even withdraw from the market altogether. This means there is less competition, causing prices to rise even more.

What causes a hard market?

This leads to another question: why are we in a hard market? There are a few reasons for that:

  1. Changing technologies

    More technology is built into cars now than ever before. Things like cameras for blind spot detection and automatic emergency braking are there to make our roads safer. However, they are expensive to replace, meaning car repair costs are increasing.
  2. Distracted driving

    Here's one more reason to leave your phone in the backseat while driving: distracted driving has led to higher insurance premiums! As distracted driving has increased, so have accident rates. More accidents means more payouts, which means higher insurance costs for customers.
  3. Extreme weather

    Damage from increasingly severe weather such as wildfires, floods, hail and tornadoes means that more Canadians are making insurance claims. More claims causes insurance premiums to increase.

Insurance markets are cyclical. Many folks are currently experiencing their first hard market. Others have seen it before, and know we’ll make it through to the other side. Now the only question is when that will happen!

The truth is, it’s a cycle that’s hard to predict. Experts can make predictions, but many of the factors are out of our control.

How can I pay less for insurance during a hard market?

In the meantime, what can you do to keep insurance costs as low as possible? There are a few things that are in your control that can help you through the hard market we are currently in:

  1. Go with a broker

    Sorry, we're biased! But we really do feel that a trustworthy insurance broker can help save you money. We've been doing this for a long time now, so you can have confidence that we really know insurance. We know how to ask the right questions to ensure you're paying the right price and get the coverage you need.
  2. Practice good driving habits

    When it comes to car insurance, we know that accidents happen, and it's not necessarily your fault. However, you can do everything in your power to avoid accidents from taking place. Drive at off-peak times, don't use your cell phone when driving, don't tailgate - you know the drill. All the things you learned in driver's ed can really save you money if you put them into practice regularly.
  3. Take advantage of discounts!

    Just like the technology found in our cars has changed, so has insurance. There are new tools that monitor your driving and reward you for good driving habits. They monitor things like hard braking and rapid acceleration. If you're a safe driver, you can save money!

In summary

We can’t tell you when the hard market will end. But rest assured that we’re right there with you, always trying to save you as much money as possible. If you would like to better understand the hard market and what it means for you, we are always available to chat. Send us an email, give us a call, or stop by one of our community branches. We are always here for you.