Insurers report rise in Canadians missing car payments

Insurers are reporting a rising number of Canadians are missing their car insurance payments, possibly leading to significantly increased premiums or difficulty in securing insurance in the future, warns Surex.

Large digital insurance brokerage Surex is sounding the alarm to educate drivers about the repercussions of a missed payment on their record, the brokerage says in a press release.

Surex executive vice president of national operations Matt Dillon says recent conversations with the brokerage’s insurance partners — including some of the largest insurers in Canada — show they are seeing a rise in customers missing payments. Although the brokerage doesn’t have specific numbers on the increase, it coincides with an increase in the unemployment rate in the country as the economy weakens.

When a driver misses a payment, insurance companies will contact them to indicate they will need to make a payment by a certain date, says Surex. If that gets ignored, the policy will be cancelled. 

“As a driver, being cancelled for a non-payment is something you absolutely want to avoid,” Dillon says. “If you have this on your record, getting insurance will be much more expensive, as you’re flagged as a risk to insurers.” 

How much could a non-pay on your record raise your premiums? Surex provided some examples based on test quotes for drivers in Ontario: 

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• A 42-year-old male driver with a 2005 Honda Accord pays $3,399 a year for insurance. With a non-pay on their record, that rises to $3,780, an 11.21% increase. 
• A 39-year-old male driver with a 2017 Honda CRV pays $4,011 a year for insurance. With a non-pay on their record, their premium rises to $4,708, up 17.3%.  
• A 49-year-old female driver with a 2021 Mitsubishi Outlander pays $2,132 a year for insurance. With a non-pay on their record, that increases 10.3% to $2,351.

With a non-pay on their record, most drivers are looking at double-digit increases in insurance payments, Surex reports. The brokerage also tells Canadian Underwriter a missed payment can affect payment options and pricing for up to three years.

Dillon says it’s important to call your insurer if you are potentially facing a scenario where you will have difficulty making a payment, and working it out with them as soon as possible.  

“The repercussions of missing a payment can be immediate,” says Dillon. “This signals to insurance companies that you may face difficulty in making payments in the future, and insurance is all about pricing based on risk.”  

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.