Premiums of auto insurance: more expensive because of the pot

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Even if the insurers will act in reaction to the legalization of pot, the dealers are afraid of higher insurance premiums for motorists which will vary depending on the number of casualties and arrests in connection with cannabis use and driving.

Elisa Cloutier

Saturday, 24 march, 2018 00:00

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Saturday, 24 march, 2018 00:00

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After having remained stable for a decade, car insurance premiums are a significant jump. This recent trend of the increase in risk also increases with the legalization next marijuana.

Even if it is still impossible to establish what will be the exact consequences of the legalization of marijuana on auto insurance premiums, insurance brokers surveyed by The Journal estimate that there will certainly be ” an impact “.

“It’s going to lead to a negative aspect, but it is not known at what point. That will depend on the regulations that will be introduced, ” says Stéphane Bernatchez, owner of Strong Insurance, which is dealing with twenty or so insurers.

“If it becomes a major curse, surely, it will eventually affect the whole world. But, at the outset, I think it will be case-by-case basis “, believes his side Marc St-Pierre, president of ClicAssure, a platform enabling customers to compare several insurance quotes.

Harvest statistics

The insurance Bureau of Canada (IBC) is far more reassuring and says that the situation will be monitored very closely by insurers, which will gather statistics before changing their rates.

“The penalties will not differ from those that are already applied in the case of impaired driving,” said the spokeswoman Caroline Phémius. It specifies that, for the moment, ” nothing indicates that there will be increases in premiums because of the legalization of marijuana “.

After a few years of stability, the premiums have started to increase in recent years.

According to brokers, the insured should expect to receive higher premiums from 5% to 8 % on their next renewal, if you have not already done so.

“We’re starting to see big players moving up, and we know that others also come with increases,” says Mr. St-Pierre. “In automotive, it is rather striking,” said for his part Mr. Bernatchez.

Electronic equipment

The IBC explains this recent surge including the addition of electronic equipment on the cars over the last few years.

As a result, repair costs have soared, creating a “pressure” on insurers.

“We have seen big changes in terms of technologies in new cars. Yes, it is positive for the security, but when there is a loss, it is very expensive, now. This is almost double “, illustrious Mr. Bernatchez.

“It is a long-term effect that begins to be felt, because the insurers have not adjusted to the new costs of repairs, which fact that they are losing money now in car “, indicates Jean Boissonneault, the president of Assur360.

Average costs of PREMIUMS For CAR INSURANCE IN 2016

• Quebec: 661 $

• New Brunswick: 789 $

• Ontario: 1437 $

It is in Quebec that one finds the insurance premium is the lowest in the country

Source : insurance Bureau of Canada