The impact of the COVID-19 pandemic has changed the way Canadian consumers shop for car insurance, according to a recent report from LowestRates.ca.
The shift is due in part to the pause in drivers commuting to work (versus pre-virus levels) and in the reduced use of their vehicles when the lockdown measures were implemented.
“We saw a big increase in low-mileage drivers (those who drive fewer than 5,000 kilometres a year) shopping for auto insurance on our site in April and May,” said Justin Thouin, Co-Founder and CEO of LowestRates.ca.
He said data from the report reveals that several low-mileage drivers quoting on LowestRates.ca increased by more than 34 per cent in May, compared to a year earlier.
“Typically, low-mileage drivers can benefit from lower insurance rates, because premiums are based on risk,” said Thouin. “From an insurance company’s perspective, the less you drive your car, the lower the risk of you getting into an accident and needing to make a claim.”
Another interesting finding from the survey indicates that the number of young drivers searching for car insurance has significantly declined, due to the lockdown measures meant to help curb the spread of the virus. Specifically, the number of young drivers — the ones aged 25 and under and quoting on LowestRates.ca — dropped by 37.06 per cent in March, 42.51 per cent in April, and by 7.58 per cent in May year-over-year.
“New drivers may have been hesitant or not allowed to do their driving examination tests across Canada during these months,” said Thouin. “Even now, except for in Saskatchewan, you can’t take a driving test. It’s possible that physical distancing rules meant that fewer new drivers were able to enter the market for insurance.”
However, data suggests that once dealerships were able to reopen, new drivers were buying cars again and searching for insurance policies.
The number of people searching for car insurance quotes for new vehicles (2019-2021 models) declined by 80.08 per cent in April (versus the same period in 2019), but increased in May. The month-over-month figures revealed that there were 51.07 per cent more quotes for newer vehicles during that period.
“As provincial governments continue to gradually loosen lockdown restrictions, I expect to see a continued increase in people seeking auto insurance quotes from our site,” said Thouin.To view the full report, click here.
