You’ve been with the same insurer for five years. Clean driving record. No claims. No tickets. Yet your Hamilton car insurance premium increases every single year.

Last year it was $1,650. This year it’s $1,890. Next year? Probably over $2,000. Meanwhile, your coworker who just signed up with the same company is paying $1,450 for identical coverage.

Welcome to the loyalty tax, where being a good customer costs you hundreds of dollars annually.

1. New Customers Get Discounts You’ll Never See

Insurance companies offer 10-20% new customer discounts to attract business. These discounts disappear after your first year, but your rate never drops back down. Instead, it keeps climbing.

Research shows new motor insurance customers pay significantly less than loyal customers who have been with their provider for five or more years. The gap can reach 30% or more for identical coverage.

The insurer hopes you won’t notice or won’t bother shopping around. Most customers don’t. That’s why 91% of people renew with their current carrier even when better deals exist elsewhere.

2. Annual Rate Increases Compound Over Time

Hamilton car insurance rates typically increase 5-8% annually even without claims or tickets. Over five years, those increases compound into massive premium hikes.

Start at $1,500. Add 6% each year. By year five, you’re paying $2,007. That’s a $507 increase, or 34% more, despite doing nothing wrong. Compare that to cities like Ottawa where rates barely moved at just 1.04% in 2025.

After five years of loyalty, you’ve paid $8,454 total. A new customer getting the same coverage today? They’d pay $1,440 for their first year. You’re subsidizing their discount with your loyalty tax.

3. You’re Subsidizing Riskier Drivers

Your clean record means nothing when insurers pool risk. They use your overpayments to offset losses from high-risk drivers paying discounted new customer rates.

Think about it. While Brampton drivers pay $3,377 annually due to massive fraud, Hamilton car insurance costs around $1,735 on average. But long-term Hamilton customers pay closer to $1,900-$2,000 because insurers know they won’t switch.

Your loyalty funds the acquisition cost of new customers and the losses from risky drivers attracted by low introductory rates.

4. Age-Based Pricing Hits Young Drivers Hardest

Young Hamilton drivers already pay astronomical premiums. Add the loyalty tax on top, and renewal time becomes a financial nightmare.

If you’re 22 years old paying $2,548 annually, a 6% loyalty tax increase means an extra $153 next year. Over five years of loyalty, you could pay $1,200+ more than someone who switches carriers annually.

5. Hidden Fees Accumulate Unnoticed

Policy fees, administrative charges, and payment plan costs creep up annually. Most Hamilton car insurance customers never review these line items until they’re paying $50-$100 more per year in fees alone.

Your base premium might increase 5%, but total cost jumps 7-8% when you include fee increases. Over time, these hidden charges add hundreds to your annual cost.

6. You Miss Out on Better Coverage Elsewhere

Loyalty doesn’t just cost money. It costs you better coverage options. While you stick with your current provider, competitors launch improved policies with features your insurer doesn’t offer.

By staying loyal, you’re locked into outdated policy structures while new customers access modern coverage designed for today’s drivers.

7. Postal Codes Create Premium Gaps

Hamilton car insurance varies significantly by postal code. L8S averages $1,782 annually while L8H, L8L, and L8M postal codes reach $2,007. That’s a $225 difference based purely on location.

Loyal customers in high-rate postal codes get hit twice: once by location-based pricing, again by loyalty tax increases. Someone who moved from L8S to L8H two years ago could be paying $400+ more than a new customer in the same building.

This mirrors what happened in Windsor where the 12.69% rate increase hit hardest in specific neighborhoods, creating massive disparities.

8. Brokers Prioritize New Sales Over Your Renewal

Your broker earns minimal commission on renewals compared to new business. When you call asking about your rate increase, you’re competing for attention with prospects who might generate 3-5x more revenue.

This is exactly why Mississauga drivers report getting ghosted by brokers during renewal season. The economics incentivize ignoring loyal customers in favor of new acquisition.

You’re paying more while receiving less service. The loyalty tax punishes you financially and deprioritizes you operationally.

9. Automatic Renewals Keep You Trapped

Most Hamilton car insurance policies auto-renew 30 days before expiration. By the time you notice the increase and decide to shop around, you’re already locked in for another year.

Insurers count on inertia. They know 91% of customers will renew automatically despite rate increases. Breaking free requires calendar reminders, proactive shopping, and switching carriers before auto-renewal kicks in.

10. You’re Losing $300-$500 Annually vs Switchers

Customers who comparison shop and switch carriers every 2-3 years save $300-$500 annually compared to loyal customers who never leave. Over a decade, that’s $3,000-$5,000 wasted on loyalty.

That $4,500 could fund a vacation, pay down debt, or boost your emergency fund. Instead, it subsidizes new customer discounts and insurance company profits.

How to Escape the Loyalty Tax

You can’t eliminate rate increases entirely. Market conditions, claims costs, and inflation affect all Hamilton car insurance premiums. But you can avoid paying more than necessary.

Stop paying the loyalty tax:

• Shop for quotes 60 days before your renewal date
• Compare at least 3-5 different insurers and brokers
• Use Beat My Insurance to make brokers compete for your business
• Switch carriers every 2-3 years to access new customer discounts
• Never auto-renew without reviewing your rate first

The traditional model penalizes loyalty. The marketplace model rewards competition. When brokers know you’re comparing multiple offers, they bring their best rates instead of relying on your inertia.

Make Insurers Compete for You

Beat My Insurance flips the loyalty tax on its head. Instead of accepting whatever increase your current insurer sends, you post your insurance needs once. Then brokers across Canada compete to win your policy with their best rates.

You compare offers side by side. You choose the winner. Your information stays private until you accept a bid. No spam. No pressure. No loyalty tax draining hundreds from your account every year.

Hamilton car insurance doesn’t have to cost more just because you’ve been a good customer. Stop rewarding loyalty with higher premiums. Start making insurers earn your business with competitive pricing.