Fleishman-Hillard Canada

April 05, 2006 10:30 ET

Fleishman-Hillard Canada: Alberta Motorists Can Beat the Rising Cost of Auto Insurance

EDMONTON, ALBERTA--(CCNMatthews - April 5, 2006) -

Study finds that by using Internet discounts, drivers can reduce insurance premiums up to 40%.

Alberta drivers are "starting to wake up" to possibility of Internet savings.

A new industry study shows that many Alberta drivers could now reduce their auto insurance premiums by up to 40% a year by buying over the Internet.

Buying auto insurance via the Internet is relatively new to Alberta. As of today, it is available from three suppliers -- Canadian Direct Insurance, of Edmonton, plus TD Insurance and RBC Insurance of Toronto.

Several other auto insurance companies provide quotes via the Internet, but require a visit to an insurance broker to actually buy a policy.

In late March, a market study by Canadian Direct Insurance found that, for a range of typical Alberta drivers and vehicles, auto insurance sourced on the Internet can generate typical savings of more than $500 per year per vehicle. Examples from the study:

- A 45 year old Calgarian with 29 years of accident free driving, a seven kilometer commute to work and one security device can save as much as $559 (driving a 2004 Toyota Corolla), $519 (driving a 2005 Dodge Caravan) and $536 (driving a 2006 Honda Civic).

- A 35 year old Edmontonian with 18 years of driving experience, 10 years accident free, one comprehensive loss a year ago, 1 speeding ticket 10 km over the posted speed limit, and a 7 km commute to work, can save $463 a year (driving a 2005 Dodge Caravan) and $770 a year (driving a 2006 Honda Civic LX dr).

For more examples, see the table below summarizing the survey.

Canadian Direct's chief underwriter, Karen Hopkins-Lee, says that while not all drivers or vehicles will achieve savings this large "we surveyed enough insurance companies, using enough examples of different types of drivers and cars, to show that many drivers will find large savings buying their insurance via the Internet. We certainly found that anyone who buys auto insurance without checking rates on the Internet, may be wasting hundreds of dollars a year."

Why is auto insurance over the Internet cheaper? Canadian Direct's Chief Operating Officer, Colin Brown, says there are two reasons. "A direct seller cuts out the middle man and doesn't have to pay sales commissions to brokers. Plus, providing quotes and application processing on a Website reduces the insurer's processing costs. We can pass on some of that saving in the form of lower rates. In our case, a five percent discount (on physical damage) on the price of buying from us over the telephone."

Public interest in buying over the Internet is growing rapidly

"Once the Alberta government started regulating rates in 2004, a lot of Albertans concluded that all insurance company prices must be the same and there was no point in shopping around. That's not true at all. Alberta has a very competitive market, and now the availability of cheaper rates on the Internet makes Alberta a real competitive hotbed. Our survey shows that there is a huge spread in rates. The Internet opens a whole new range of possibility for people to shop around. We're seeing a tremendous surge of public interest in our website."

Are people skeptical about the possible savings? Says Brown: "It's normal to question the claims of any company. The Internet offers people a chance to test those claims and find out for themselves."

HOW ALBERTA AUTO INSURANCE RATES DIFFER

Data from a comparative rates study conducted week of March 27, 2006

Calgary: 45 year old driver, 29 years accident free, 7 km commute to work, one security device (fuel ignition cut-off)



---------------------------------------------------------------------
Canadian Royal &
Direct RBC Sun
Vehicle (Online) (Online) Alliance Aviva Economical Wawanesa
---------------------------------------------------------------------
2004 Toyota
Corolla $816 $1131 $1190 $1192 $1209 $1375
---------------------------------------------------------------------
2003 Toyota
Camry $806 $1087 $1097 $1097 $1090 $1214
---------------------------------------------------------------------
2005 Dodge
Caravan $787 $1098 $1153 $1145 $1156 $1306
---------------------------------------------------------------------
2006 Honda
Civic $884 $1280 $1264 $1262 $1266 $1420
---------------------------------------------------------------------


Calgary: 35 year old, 18 years driving, 10 years accident free; 1 comprehensive loss one year ago, I speeding ticket 10 km over the posted limit one year ago, 7 km commute to work, one security device (fuel ignition cutoff)



---------------------------------------------------------------------
Canadian Royal &
Direct RBC Sun
Vehicle (Online) (Online) Alliance Aviva Economical Wawanesa
---------------------------------------------------------------------
2004 Toyota
Corolla $ 994 $1281 $1238 $1252 $1576 $1446
---------------------------------------------------------------------
2003 Toyota
Camry $ 984 $1232 $1142 $1152 $1416 $1276
---------------------------------------------------------------------
2005 Dodge
Caravan $ 953 $1241 $1200 $1203 $1505 $1373
---------------------------------------------------------------------
2006 Honda
Civic $1081 $1447 $1315 $1326 $1651 $1494
---------------------------------------------------------------------


Edmonton: 45 year old, 29 years driving accident free, 7 km commute to work, one security device (fuel ignition cut off)



---------------------------------------------------------------------
Canadian Royal &
Direct RBC Sun
Vehicle (Online) (Online) Alliance Aviva Economical Wawanesa
---------------------------------------------------------------------
2004 Toyota
Corolla $848 $1217 $1409 $1429 $1247 $1234
---------------------------------------------------------------------
2003 Toyota
Camry $844 $1170 $1281 $1334 $1132 $1111
---------------------------------------------------------------------
2005 Dodge
Caravan $817 $1189 $1358 $1380 $1196 $1179
---------------------------------------------------------------------
2006 Honda
Civic $906 $1565 $1512 $1512 $1301 $1277
---------------------------------------------------------------------


Edmonton: 35 year old, 18 years driving, 10 years accident free, 1 comprehensive loss 1 year ago, 1 speeding ticket 10 km over the posted limit one year ago, 7 km commute to work, one security device (fuel ignition cut off)



---------------------------------------------------------------------
Canadian Royal &
Direct RBC Sun
Vehicle (Online) (Online) Alliance Aviva Economical Wawanesa
---------------------------------------------------------------------
2004 Toyota
Corolla $1036 $1383 $1468 $1502 $1624 $1296
---------------------------------------------------------------------
2003 Toyota
Camry $1032 $1331 $1335 $1401 $1471 $1167
---------------------------------------------------------------------
2005 Dodge
Caravan $ 992 $1315 $1325 $1364 $1455 $1172
---------------------------------------------------------------------
2006 Honda
Civic $1100 $1518 $1738 $1614 $1880 $1513
---------------------------------------------------------------------


Canadian Direct Insurance Incorporated is a federally chartered property and casualty insurance company owned by the Canadian Western Bank and currently providing auto and home insurance in British Columbia and Alberta. The company began operations in 1996.

FREQUENTLY ASKED QUESTIONS

The cost differences cited in this study sound too good to be true. How can consumers know that these rate comparisons are really representative of all drivers and all types of car?

The cost of insurance varies from driver to driver depending on the driver's risk rating and the type of vehicle that he or she drives. In other words there is a very large range of possible insurance prices. Canadian Direct's study chose some hypothetical but very representative and common types of drivers and types of vehicles and then used the Internet to get quotes on the price of insurance for each. Consumers are free to use the Internet to make their own comparisons.

Does this study say that everyone can save hundreds and hundreds of dollars buying their auto insurance over the Internet?

It's not possible to say that every single driver or type of vehicle will qualify for large savings. There literally thousands of permutations of types of driver and types of vehicles, and this study couldn't research all of them. What the study does show is that large savings are possible for many ordinary drivers who drive widely-available vehicles.

How many insurers in Alberta sell insurance over the Internet?

To the best of the company's knowledge, only Canadian Direct Insurance, TD Insurance and RBC Insurance provide auto insurance quotes online and allow a customer to purchase a policy via the Internet. The other companies mentioned in the study provide quotes over the Internet either via their website or through a third-party service called KANETIX, but do not sell policies over the Internet. These companies only sell policies through insurance brokers.

Do most companies have a cheaper rate if you buy from them over the Internet, rather than buy from them via an insurance broker?

All of the companies that contacted over the Internet charge the same price "over the counter" and via the Internet. Canadian Direct and RBC offer a five percent discount for policies purchased over the Internet.

How do you get a claim serviced if you are dealing with an "Internet insurance company"?

We can't speak for other companies, but in the case of Canadian Direct, you contact our Claims Department by means of a toll-free telephone number that operates 24X7. We arrange for the vehicle to be assessed at one of our authorized repair centres and then make all the necessary arrangements. In many locales we also provide a free loaner vehicle for your use, and deliver your repaired car back to your residence.

How do I know that an insurance company selling over the Internet is legitimate - in other words, financially secure, trustworthy?

All Canadian insurance companies - including those that provide service over the Internet - must be chartered by a Provincial Government or the Government of Canada. Their investments are tightly regulated by government and their prices operate under limits set by the Alberta Government's Insurance Rate Board.

Contact Information

  • Fleishman-Hillard Canada
    Colin Brown
    (604) 699-3652
    or
    Fleishman-Hillard Canada
    Karen Hopkins-Lee
    (604) 699-3652