Auto insurance in Richmond Hill
As is usually the case, population growth and city expansion had an impact on auto insurance, with premiums in Richmond Hill amongst the most expensive in Canada. This steady rise in insurance prices has coincided with the development of the town in recent decades. For example, Yonge Street is a major thoroughfare in the town which was expanded to four lanes in 1971. Reflecting increasing traffic and collisions in the town. It is worth noting that Yonge Street has been dubbed “Ontario’s worst stretch of highway”.
Richmond Hill is the fifth most expensive auto insurance market in Ontario and consequently in Canada. This is based on an average premium that customers pay in the province. As a whole, Ontario is the most expensive auto insurance location in Canada. The province is sometimes up to 40% more expensive than other regions in the country, and this is largely because of the Greater Toronto Area.
The group of urban areas in and around Toronto present an unbalanced insurance market in Ontario. If the GTA region was removed from Ontario, the provincial average premium would decrease. This is because most municipalities within GTA are more expensive than the province, and in some case more than 35% more expensive.
Drivers pay around $1,400 on average for auto insurance in Ontario, but in Richmond Hill the average premium price is $1,783. That number is 23% higher than the average cost compared to Ontario as a whole.
There are a number of reasons why insurance in Richmond Hill is so expensive. Some of them range from genuine insurance practices to outright nefarious situations like auto insurance fraud.
Insurance companies charge too much – The private auto insurance industry has been widely criticized for allowing rates to go too high over the last number of decades. In response, companies insist that market conditions resulting from other factors mean that premiums must be high to offset risk. In Ontario, companies assess insurance on factors such as driving experience, driving record, type of vehicle, policy required, and age/gender.
However, insurers will also look at external factors, such as the location a vehicle will be stored and used, how busy the area is, the amount of traffic, theft rate, and likelihood of a collision. Because of the population, size, and location of Richmond Hill, insurers essentially hedge their bets with high premiums to avoid losing money.
Fraud – Unfortunately, auto insurance fraud is a major problem in Ontario, with the focus on the Greater Toronto Area. Crime rings have formed that ship vehicles overseas and claim them as stolen to insurers. It is believed fraud costs customers over $1 billion per year and hundreds of dollars could be saved on an average premium if fraud was removed entirely.
Government failures – The government spent too many years ignoring the constant growth of premiums in Ontario. Over the last three years, the provincial government has enacted a number of initiatives to lower costs. It is a slow progress, but the hope is premiums will eventually fall.