Why do insurance rates change?

Insurance rates are changing across Canada, but why? Sometimes premiums can change for reasons beyond your control, and we know this can be frustrating. Because we want to make insurance easier to understand, we’d like to help explain what’s happening to insurance rates across our industry. When it comes to pricing a home or auto policy, here are some of the factors that are considered:


Location. Where you live tells us a lot about your home and what types of losses could occur. When determining your quote, we look at questions like (but not limited to): Is your neighbourhood prone to break-ins? What kind of weather can you expect in your area? And, what is the likelihood and estimated cost of other types of potential damage to your home?

TIP: Learn how your postal code code could affect your Toronto car insurance rate.

Severe weather events. Because of the rising number of severe weather events, like flooding and wildfires, insurance companies are paying out more in claims. Last year alone, insurers paid out almost $2 billion in claims for severe weather events in Canada.

Home upgrades. Another reason you may see a jump in the price of your property insurance is due to changes made to your home. For example, upgrades like finishing your basement can increase the cost to rebuild after a loss. (However, other home improvements can actually help to reduce your premium, such as updating an older roof.)

Heads up! It’s important to inform your insurer of any changes made to your home.


Location. Where you live also impacts your auto premium. This is because some neighbourhoods have a higher likelihood of accidents than others due to factors like the number of intersections and volume of cars on the road.

Your vehicle. We use an industry standard database called CLEAR (the Canadian Loss Experience Automobile Rating), which provides specific info on every make and model of vehicle. Through CLEAR, vehicles are given different ratings based on records of thefts, accidents and more. These ratings then play a part the price of your insurance.

Technology. Overall, vehicles today are more expensive to repair due to new tech. Although built-in sensors, driver assistance and semi-autonomous features make your car safer, they can also create longer and more costly repairs.

Keep in mind, there are other factors that can affect the premium you pay, such as claims or inflation. But, there are also things you can do to help save on your insurance.

At Sonnet, we pride ourselves on offering competitive prices. Our policies are priced just for you, not for people like you. Learn more about how we calculate your home and auto premiums.