Uneven auto insurance rate hikes in N.B. are shifting where the deals are

New Brunswick drivers looking for the best deal on car insurance this fall and winter may have to switch companies to get it, as major shifts in the province's insurance markets alter where the lowest prices can be found.

"You always have to ask that question," said Justin Thouin, chief executive officer of the auto insurance pricing website lowestrates.ca

"Everybody needs to compare to make sure that they're paying the lowest price possible and they need to compare annually because the company that was best for you one year might not be the company that's best for you the next year."  

All auto insurance companies operating in New Brunswick have raised rates over the last three years, but some have raised them more rapidly than others. That is changing where consumers may be able to find the best prices. 

Wawanesa Insurance, the largest, and for years cheapest, source of auto insurance in New Brunswick is poised to be replaced later this fall by two companies — Intact Insurance and Economical Insurance — for the lowest average premiums in the province.

Wawanesa's average premium in New Brunswick will have jumped by $337, or 54 per cent, since 2017 after its latest 12 per cent increase takes effect Sept. 1. The new rates will apply to those buying or renewing policies after that date with the company. 

Wawanesa representatives told the New Brunswick Insurance Board at a hearing this spring that a series of recent rate hikes have not been enough for it to earn a reasonable profit in New Brunswick because of rising claims.

"Even after recent rate increases our indications still remain high, suggesting our rates are still quite inadequate," Wawanesa told the board in justifying the hike, it's fifth increase since May 2017.

But not every company insuring drivers in the province has chased increases as aggressively as Wawanesa.

New Brunswick's third largest auto insurer, Toronto-based Intact, has raised the average price of its premiums in the province $168, or 19 per cent, since 2017. It is proposing no increase in September.

That will leave Intact with average annual premiums that are $77, or eight per cent, cheaper than Wawanesa by fall.

Intact declined a request to discuss its pricing in New Brunswick.

Having the lowest average premium does not mean a company will have the lowest rate for every consumer.

Some companies with higher than average premiums may offer loyalty or other discounts, or specialize in insuring certain vehicles or drivers able to produce a better price in specific circumstances.  

But Thouin said the significant and uneven range of rate hikes granted insurers in New Brunswick in recent years, and shifting risk profiles of cars and drivers, means the best prices for individual consumers move from company to company over time, and last year's good deal can erode quickly.

Average auto premiums proposed or won for fall 2020 by NB's big 10 insurers:

Source: New Brunswick Insurance Board

Three years ago, New Brunswick's eighth largest auto insurer, Certas Home and Auto, was charging higher than average premiums in the province. But it has raised its rates the least of any major company since 2017, just $52, or six per cent, and is now priced among the lowest. 

"In many cases it may make sense to stay with the same insurance company for 10 years because of their loyalty [discount]. But you always have to ask that question," said Thouin.

New Brunswick has more than five dozen companies that offer auto insurance, but two-thirds of the policies sold to consumers come from 10 providers.

According to company filings and recent decisions of the New Brunswick Insurance Board, the average annual premiums proposed or approved to be charged this fall by those 10 range from $880 to $1,154.