In Ontario, the average car insurance costs around $150 a month or $1,796 annually, depending on where you live. Did you know that car insurance rates have gone up an average of 12% in Ontario since 2021? That’s one of the reasons Ontario has the highest average car insurance costs in Canada. Despite this, these numbers can be misleading because depending on where you live and other factors, such as your personal driving history, the type of vehicle you drive, your personal details, and your reasons for driving (e.g. personal or business use) also affect your rates.
How high are car insurance premiums in Ontario?
Your insurance company and location contribute to the costs of auto insurance. Insurance companies can request rate adjustments from the Financial Services Regulatory Authority every three months, which alters premiums. These frequent changes make it difficult to lock down a specific number for each province.
For example, let’s discuss Brampton. The average car insurance cost in Ontario is $145 per month, but in Brampton, it costs $2,707 annually or $226 monthly. That’s because Brampton drivers submit more claims and for higher amounts. Behind Brampton, with the second highest rates, is Toronto car insurance, which costs an average of $194 per month.
Car insurance rates vary depending on the person’s age as well. For example, the average cost of car insurance in Ontario for a 17-year-old is $575 monthly or $6,900 annually because of their lack of driving experience and other risk factors. On the other side of things, a person in their 40s with a clean driving record and several years of experience on the road has an average premium of $114 per month or $1,370 annually.
Who regulates car insurance in Ontario?
The FSRA (Ministry of Finance) regulates car insurance rates in Ontario. The FSRA approves or denies your insurance company’s request to change rates. In other words, an insurance company can ask to adjust your premium throughout the year. If your insurance company has to pay more claims due to multiple accidents, they usually apply to raise rates to cover expenses.
What affects car insurance rates in Ontario?
Basic information such as location, driving experience, gender and age are consistently used to calculate car insurance premiums in Ontario. However, they aren’t the only aspects that affect auto insurance rates. Insurance companies in Ontario use many factors to determine your car insurance premium, including:
- Your driving history
- Your age and gender
- Your location
- The make, model, trim, and year of your car
- Your daily commute
- How many kilometres you drive annually
- Your driver’s licence level (G1, G2, or G)
- Type of coverage on your policy
- Your policy limits
- Your chosen deductibles
- Your past claims
Many factors affect car insurance rates in Canada. Although this list is fairly general, it covers most of what car insurance companies use when calculating rates. However, it’s important to note that each company weighs these factors differently. In other words, auto insurance rates can vary depending on the provider.
Ontario uses a private car insurance system. That’s why drivers often shop around or get a broker to get multiple quotes from various insurance companies. It helps you get the best deals on your car insurance policy.
Why is car insurance so expensive in Ontario?
Ontario car insurance rates are far from cheap. Even when comparing car insurance quotes, you will still have to pay a decent amount just to receive minimum coverage. Your insurance company will take the following factors into consideration when determining your car insurance rates:
Higher car prices
New cars cost $61,000 on average, while used cars are about $39,000. The price increases are a result of vehicle and semiconductor chips, which are used for safety features such as airbags and brakes, having shortages. Since cars cost more to buy, repairing or replacing them following an accident isn’t cheap either. This leads to bigger claims, and in turn, Ontario car insurance rates climb.
Insurance fraud
Fraudulent accidents and exaggerated injury claims can have a significant impact on your car insurance premiums. For example, some drivers cause accidents on purpose to collect payouts, and others inflate the severity of their injuries. Insurance fraud costs Ontario drivers over $1 billion annually, according to the Insurance Bureau of Canada (IBC). Insurance fraud costs are then passed on to all policyholders, meaning everyone pays higher premiums.
Rate changes
The Financial Services Regulatory Authority of Ontario (FSRA) manages Ontario car insurance rates to ensure fairness. Due to inflation, the FSRA has approved rate increases of up to 15%, and now the average increase is around 6.5%. That means if your policy is up for renewal soon, your monthly car insurance costs could go up a decent amount.
More car theft
Frequent car theft also affects car insurance in Ontario. The IBC suggests a car is stolen every 48 minutes in Canada. Some car models are targeted more than others. Unfortunately, if you own a certain brand or model of car, your auto insurance rates might jump up to cover the higher risk of theft.
Ontario’s car insurance laws
Another reason car insurance in Ontario costs so much is that the government requires at least $200,000 in third-party liability coverage. Some insurance companies suggest having even more, including up to $2 million, to ensure you are protected no matter the incident or injuries.
Why did my car insurance go up without an accident in Ontario?
Sometimes, even when your situation doesn’t change (same car, same city), your car insurance premium can change each year. That’s because your driving record isn’t the only factor insurance companies use when adjusting rates. If your insurance company has paid out more claims to an increase in accidents or weather-related incidents, the rates of all drivers might be raised to cover these costs.
Generally, market trends can also increase car insurance rates. Rising inflation, higher repair costs, and increased traffic accidents also alter car insurance premiums even for drivers with perfect records. Government regulation changes can also affect rates if new requirements are introduced.
Personal factors such as your driving record or life changes can also influence your auto insurance rates. For example, getting a new job with a longer commute or aging could put you into a new risk category and increase your rates.
Insurers are always recalculating prices. Compare rates with different providers when your policy is up for renewal. This ensures you can find the best possible rate even if you have a clean driving record.
Is car insurance mandatory in Ontario?
Car insurance is mandatory in Ontario and throughout Canada. Driving uninsured can lead to large fines, licence suspension, vehicle impoundment and sometimes jail time. If you have insurance and can’t show proof ( your pink slip) when stopped by the police, you will still face a fine of $5,000 plus a 20% surcharge, even if it’s your first offence. Here are the types of auto insurance coverage Ontario law requires for your car insurance policy:
Third-party liability coverage
Liability insurance has to be listed on your car insurance policy to legally drive in Canada. If you are at fault for an accident, liability coverage helps pay for legal costs and damages to other drivers, pedestrians, or property up to your policy limit. Ontario drivers need at least $200,000 in liability coverage, but higher limits are also available.
There are two types of liability coverage:
Bodily injury
This will cover any expenses if you injure someone in an accident. Your policy can help compensate someone for their medical bills or lost wages.
Property damage
This type of coverage applies if you damage someone else’s property, such as their car or home.
Accident benefits coverage
If someone suffers injuries or harm in a car accident, your mandatory accident benefits coverage can help. It will compensate the policyholder if they or someone else is hurt or killed in a car accident. This will assist with paying for things like prescription medications, physical therapy, funeral costs, and lost income. Basically, it protects drivers, passengers, and pedestrians involved in an accident.
Uninsured motorist coverage
Getting into an accident with an uninsured or underinsured driver is covered by uninsured motorist coverage. Additionally, it can help you out if a driver flees the scene and can’t be identified (hit-and-run). This type of coverage can also provide compensation for injuries to yourself or your passenger and damage to your vehicle.
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What types of optional car insurance coverage are available in Ontario?
Auto insurance rates often vary depending on the types of coverage you have. While optional coverage can increase your premium, they are worth looking into for the extra coverage they provide. Based on your driving history, your insurance company might recommend additional coverage to protect yourself and others on the road. Here are the types of optional car insurance coverage available in Ontario:
Direct compensation-property damage coverage
DCPD provides coverage for damage to your car and its contents if you are not entirely at fault for the accident. The direct compensation portion lets you deal directly with your insurance, regardless of who caused the accident. It simplifies and accelerates the claims process, allowing you to receive compensation sooner. Previously, this type of coverage was mandatory in Ontario and part of standard coverage. However, it became optional as of January 1, 2024.
Collision coverage
Consider adding this type of optional coverage to your car insurance policy. If you collide with another vehicle or object on the road, collision coverage helps pay for the damage regardless of who was at fault. It also reimburses you for various costs, such as vehicle repairs, which can give you peace of mind while minimizing out-of-pocket expenses.
Comprehensive coverage
You can also opt into this type of coverage if you feel it’s necessary. In Ontario, it covers various unexpected events that can damage your car outside of collisions. Comprehensive coverage mitigates risks like theft, vandalism, lightning, flooding, earthquakes, fires, and falling objects. When it comes to comprehensive coverage, you can protect your vehicle against many unforeseen scenarios.
All-perils coverage
Purchasing all-perils coverage allows you to combine features from collision and comprehensive coverage. There’s also the option of adding extra protection in case a family member or employee steals your car. This type of coverage offers more extensive protection and safeguards your vehicle against at-fault accidents and a variety of non-collision risks.
Accident forgiveness coverage
New drivers or those who are considered high-risk may want to add this coverage to their insurance policies. Basically, it prevents your insurance company from increasing your rates after your first at-fault accident. Remember, accident forgiveness only applies to the first accident, and any future ones can still increase your premiums.
How much Ontario car insurance do I need?
In Ontario, the minimum liability coverage requirement, accounting for the costs of uninsured or underinsured drivers, is $200,000. It’s important to note that many people opt for at least $500,000, $1 million, or $2 million to cover the potential costs of getting into an at-fault accident. Drivers can choose to increase the minimum for additional protection by adding the OPCF 44R Family Protection Endorsement to their policy.
In terms of accident benefits, mandatory coverage offers up to $65,000 for non-catastrophic injuries and up to $1 million for catastrophic injuries. Despite this, you can increase the non-catastrophic coverage to $130,000 and the catastrophic coverage to $2 million for additional protection.
Can you own a car without insurance in Ontario?
Technically, you can own a vehicle without insurance in Ontario. However, you have to purchase car insurance and register before you can legally drive it. Ontario law requires every vehicle on the road to have at least the mandatory minimum insurance, including liability coverage, accident benefits and uninsured motorist coverage. If you plan on driving a car or there’s a chance someone else might want to, you have to insure it. Otherwise, you might face fines, licence suspension, and vehicle impoundment.
How can I find cheaper auto insurance in Ontario?
Ontario has some of Canada’s highest auto insurance rates, but there are ways to lower car insurance premiums. The best way to do this is to maintain a clean driving record. Before you purchase a car, research the model and ask your insurance broker how it will affect your premium. Here are tips for finding an affordable auto insurance policy:
Shop around
You can save money on your annual or monthly payments by getting quotes from multiple insurance providers. You should never settle for your first quote because car insurance costs often vary depending on the insurance company you choose.
Get a higher deductible
Increasing your deductible is upping the amount you pay out of pocket before insurance kicks in. This can lead to lower monthly payments. However, it’s important to be comfortable with the potential deductible cost after an accident before you save money with this tip. You are taking the risk of paying more after an accident to reduce your insurance costs.
Bundle policies
Many insurance companies offer discounts when you bundle multiple policies, such as home and auto insurance. Bundling your insurance policies can reduce your car insurance rates and overall insurance bill. If all the drivers listed on your policy maintain a clean driving record, you can save money on your car insurance premium.
Ask about discounts
The cost of car insurance in Ontario is already high enough, so asking insurance providers if they provide any discounts can help. Many insurance companies offer discounts to prevent you from having to pay higher premiums than you have to.
Maintain continuous coverage
Most insurance companies will use your insurance history to help determine your rates. That’s why paying on time and keeping your policy active matters. Lapses in coverage can result in higher rates or difficulties obtaining insurance in the future, which is similar to having a history of car accidents.
How much is auto insurance for a new driver in Ontario?
Insurance costs vary depending on the driver’s situation, demographics, and other factors, which makes listing the average insurance premium difficult to determine. In Ontario, young females tend to pay between $4,365 to $5,975 annually, while the cost for young males ranges from $4,950 to $7,825 per year.
At first glance, this may seem unfair. However, the Canadian Human Rights Commission lets insurance companies use factors like age, sex, and marital status when calculating insurance premiums.
In Ontario, young drivers must go through the graduated licensing system (from a G1 to a G licence). As they gain more experience on the road, their rates will start to go down. However, young drivers should expect to pay higher-than-average insurance costs until they maintain a clean driving record for at least seven years.
Does getting your G license in Ontario lower your insurance rates?
Yes, getting a full G licence in Ontario can lower your car insurance rates. That’s because insurance companies view drivers with a G licence as more experienced and less of a risk on the road than those with a G1 or G2. Those with a full licence won’t have the cheapest car insurance right away, but they pay less inexperienced drivers in the grand scheme of things. It’s important to note that factors like age, driving history, and the type of car you drive are also taken into account.
Tips to lower your car insurance in Ontario
Do you want to save money on your monthly car insurance payments in Ontario? If you do, BrokerLink can help. That’s why we have compiled a list of tips and tricks to reduce your car insurance costs:
Maintain a good driving record
Many insurance providers offer discounts if you maintain a spotless driving record. Your driving history is a major factor when it comes to calculating premiums. A clean driving record without accidents, tickets, demerit points, or charges for driving under the influence shows your insurance company you are a safe driver who follows the rules. If you drive less, you might qualify for low-mileage car insurance.
Pay your car insurance annually rather than monthly
In Ontario, several insurance companies offer discounts for paying your premium annually instead of monthly. Why? It’s because insurance companies often charge administrative fees on monthly payments, which increases costs in the long run.
Don’t let your car insurance expire
Always maintain continuous car insurance coverage. If your car insurance lapses, you are considered a higher risk in the insurance industry. This often occurs when you try to renew your expired car insurance. Even if you aren’t driving, you need to keep your policy active or change to a different plan instead of letting it expire.
Choose a car known for affordable insurance rates
The make, model, trim, and year of your vehicle make a difference in your car insurance quotes. You can keep your monthly premiums low by purchasing a car that’s known for affordable coverage. Safe, reliable, and budget-friendly cars are generally the best option. In contrast, high-end luxury vehicles like a Bentley or Lexus and powerful sports cars often cost more to insure.
A used or older model can also help you save money on your car insurance. They are also less valuable, which can reduce insurance rates. Canadian provinces, including Ontario, also give drivers discounts for owning eco-friendly vehicles like hybrids or electric cars. Consider going green to pay less for insurance.
Finally, car models that are often victims of vehicle theft should also be avoided. Theft risk contributes to the risk of making more insurance claims, so if your vehicle is often a target of theft, your insurance might be higher.
Install winter tires on your vehicle
You can also reduce your monthly insurance rates by using winter tires. Although not required by law in Ontario, insurance companies know they make winter drivers safer and reduce accidents. Put winter tires on your car to qualify for a winter tire discount.
Work with a licensed insurance broker
Having a local insurance broker by your side is a great idea. Brokers can get multiple quotes from various insurance companies and find a policy that matches your needs. Additionally, a broker can explain all terms clearly and negotiate better prices and discounts you wouldn’t find on your own.
Save money on your Ontario car insurance with BrokerLink today
Since 1991, BrokerLink has been your Ontario insurance broker dedicated to finding insurance policies that match your needs and budget. We can help you find the most competitive rate on your policy. Our partnerships with top insurance companies allow us to find various quotes and affordable car insurance policies that suit your needs.
Call, email or visit one of your locations throughout Ontario. No matter how you choose to get in touch, a BrokerLink insurance advisor can help. You can also use our online quote tool to get a competitive quote in minutes.
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Ontario car insurance FAQs
What is basic auto insurance in Ontario?
Basic auto insurance in Ontario includes third-party liability protection, accident benefits insurance coverage, direct compensation - property damage, and uninsured motorist coverage. In Ontario, motorists are required to purchase a minimum of $200,000 in coverage. However, the majority of drivers choose to purchase more coverage as it will ultimately offer more protection in the event of an incident. Just keep in mind that additional coverage limits will increase your average premiums.
How do I report an Ontario car insurance claim?
In the event that you are involved in a collision, it's important that you report the incident to your insurance provider within 24 hours of the accident occurring. When speaking with your insurance company, a claims specialist will ask you to provide specific information related to the accident. Afterward, you will be assigned an adjuster who will be your point of contact through the claims process.
Do I need to file a police report following an at fault accident in Ontario?
If you are involved in an accident, regardless of who is at fault, you must report it to the police if you or the other driver is injured or the amount of damage between the two vehicles is over $2,000. In addition to filing a police report, you will need to report the accident to your insurance company as well to begin the claim process.
How long do driving offences in Ontario stay on my auto insurance?
Driving offences will remain on your auto insurance for up to three years from the date of your conviction. Should you be found at fault for an accident, the incident can remain on your auto insurance history for up to six years, depending on your auto insurer. To keep your insurance rate low, it's important that you practice safe driving by following the rules of the road and taking the necessary steps to keep your vehicle intact from vehicle theft by installing safety features and remaining vigilant of your surroundings when you can. Further, when renewing your insurance, make sure that you compare prices with different insurance companies to find the best rate.
If you have any questions, contact one of our local branches.
