TORONTO - The Finance Services Commission of Ontario has approved increases in auto insurance rates averaging 2.5 per cent for the final quarter of 2009.

That would bring the average premium increase for 2009 to 8.77 per cent, compared with a 5.6 per cent hike in 2008.

Approved rates went down from 2004 until 2006, but have been increasing by gradually larger amounts every year since then.

The government says the new rates do not reflect planned changes to auto insurance that will kick in this summer and which it says will help stabilize costs and premiums.

And it says current rates are now at about the same level they were in 2003, when the Liberals came to office.

The changes will give consumers flexibility to purchase coverage that best meets their needs and lowers their costs in the process.

The impact of a rate change on individual drivers will vary depending on where they live, the type of they drive and other risk factors.