In Ontario, the average car insurance policy costs approximately $150 a month, or $1,796 annually, varying by location. This means that car insurance rates have gone up an average of 12% in Ontario since 2021. As such, Ontario has the highest average car insurance rate in Canada. However, these averages can be misleading because costs differ greatly based on where you live and other factors, like your personal driving history, the type of vehicle you drive, your personal details, and even your reason for driving, e.g. personal or business use.
How high are auto insurance rates in Ontario?
It really depends on the insurance company and your location. The fact is that insurance companies can request rate adjustments every three months from the Financial Services Regulatory Authority of Ontario (FSRA), affecting average prices. Because of these frequent changes, it’s hard to set a single, fixed average monthly rate for any province.
Let’s look at Brampton, for example. While the average car insurance cost across Ontario is $145, Brampton currently has the highest rate at $2,707 annually, or roughly $226 monthly. This is because Brampton drivers submit more claims and for higher amounts. Brampton is closely followed by Toronto car insurance for the highest rates, with Toronto residents paying an average of $194 per month.
Auto insurance rates can also vary significantly based on a person’s age. For example, the average cost of car insurance in Ontario for a 17-year-old is around $575 monthly or $6,900 annually due to their lack of driving experience and higher risk factors. In contrast, a person in their 40s with a clean driving record and several years of road experience may have an average premium of $114 a month or $1,370 annually.
Who regulates car insurance in Ontario?
In Ontario, the FSRA, an agency under the Ministry of Finance, regulates car insurance. FSRA approves or denies insurance companies’ requests to change rates. Insurers can ask to adjust rates throughout the year, and if they pay more claims due to car accidents, they usually apply to raise rates to cover their expenses.
What affects average car insurance costs in Ontario?
Basic information like location, driving experience, gender and age are always used to calculate car insurance rates in Ontario. In fact, insurance companies use several 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
As you can see, many factors affect car insurance rates in Canada. This is just a general list, and some insurers consider even more factors. Each company also weighs these factors differently, so the same coverage might cost more or less depending on the provider.
In Ontario, we have a private car insurance system, so drivers can compare rates from different companies. This can help you find the best rate for your insurance needs.
What makes car insurance so expensive?
There are several factors driving up car insurance rates in Ontario:
Higher car prices
New cars now average around $61,000, and used cars are about $39,000. The price increases are mainly due to a shortage of vehicles and semiconductor chips, which are crucial for safety features like airbags and brakes. With higher car prices, the cost of repairing or replacing them after an accident rises, too. As a result, insurance companies face bigger claims, leading to higher insurance premiums for drivers.
Insurance fraud
Fraudulent accidents and exaggerated injury claims significantly impact premiums. For instance, some drivers cause accidents on purpose to collect payouts, while others inflate the severity of their injuries. This fraudulent behaviour costs Ontario drivers over $1 billion annually, according to the Insurance Bureau of Canada (IBC). These 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 and more people driving after the pandemic, the FSRA has approved rate increases of up to 15%, with the average increase being about 6.5%. So, if your policy is up for renewal soon, you may see a noticeable jump in your monthly insurance payments.
More car theft
Frequent car theft also plays a role in rising premiums. The IBC reports that a car is stolen every 48 minutes in Canada. Some car models are targeted more than others, so if your car is among them, your insurance may cost more to cover the higher theft risk.
Ontario’s insurance laws
Another reason car insurance is expensive in Ontario is that the government requires at least $200,000 in third-party liability coverage. Most insurance companies suggest even more, often recommending at least $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?
Even if your situation hasn’t changed (same car, same city), your car insurance rates might still change each year. Insurance companies regularly adjust their pricing based on various factors. If they’ve recently paid out more claims due to increased accidents or weather-related incidents, they may raise rates for all drivers to cover those costs.
General market trends can also lead to rate increases. Rising inflation, higher repair costs, and increased traffic accidents are all factors that can push premiums higher for everyone, even drivers with perfect records. Changes in government regulations may also affect rates if new requirements are introduced.
Additionally, personal factors such as your driving record or life changes can influence your insurance costs. For example, a new job with a longer commute or aging into a new risk category could change your rate. Given that insurers are always recalculating prices, it’s important to compare different providers when your policy is up for renewal. This ensures you can find the best possible rate, even if your driving record is spotless.
Is car insurance mandatory in Ontario?
Car insurance is required throughout Canada, and driving without it can lead to serious consequences like large fines, licence suspension, vehicle impoundment, or even jail time. If you have insurance but can’t show proof (your pink slip) when stopped by the police, you could still face a fine of $5,000 plus a 20% surcharge, even if it’s your first offence. Here’s what types of auto insurance coverage Ontario law requires for your car insurance policy:
Third-party liability coverage
Liability insurance is mandatory on your car insurance policy to legally drive in Canada. If you’re at fault in an accident, liability coverage helps pay for legal costs and damages to other drivers, pedestrians, or property up to your policy limit. Ontario drivers must have at least $200,000 in liability coverage, but many opt for higher limits. Liability coverage includes two types:
Bodily Injury
This covers expenses if you injure someone in an accident. Your policy can help pay for their medical bills and lost wages.
Property Damage
This helps cover the costs if you damage someone else’s property, such as their car or home.
Accident benefits coverage
Accident benefits are another type of mandatory coverage for injuries or harm caused by an accident. It aims to compensate the policyholder if they or someone else is hurt or killed in a car accident. It can pay for things like prescription medications, physical therapy, funeral costs, and lost income. This coverage protects drivers, passengers, and pedestrians involved in the accident.
Uninsured motorist coverage
This coverage helps if you’re in an accident with a driver who lacks insurance or has insufficient coverage. It can also protect you if a driver flees the scene and can’t be identified (hit-and-run). Uninsured motorist coverage can compensate you for injuries to yourself or your passengers, as well as for damage to your vehicle. Your auto insurance policy might also include the following popular optional coverages:
Direct compensation-property damage coverage
DCPD coverage helps cover damage to your car and its contents when you’re not entirely at fault in an accident. Its direct compensation feature means that you deal directly with your own insurer, no matter who caused the accident. This direct method simplifies the claims process, making it easier and quicker for you to get compensated. This coverage used to be mandatory in Ontario and is part of standard coverage; however, it became optional as of January 1, 2024.
Collision coverage
This is an optional add-on for your car insurance policy. If you’re in an accident with another vehicle or object, regardless of who’s at fault, collision coverage helps pay for the damage. It can reimburse you for costs like vehicle repairs, giving you peace of mind by minimizing your out-of-pocket expenses.
Comprehensive coverage
This is another optional coverage for Ontario drivers. It covers a variety of unexpected events not related to collisions. Your comprehensive coverage includes risks like theft, vandalism, lightning, flooding, earthquakes, fires, and falling objects. With comprehensive coverage, you can protect your vehicle against a wide range of unforeseen incidents.
All-perils coverage
All-perils coverage combines collision and comprehensive coverage and may add extra protection if your car is stolen by a family member or an employee. This type of coverage offers more extensive protection, safeguarding your vehicle from both at-fault accidents and a wider range of non-collision risks.
Accident forgiveness coverage
This optional add-on is helpful for new or high-risk drivers because it prevents your insurer from raising your rate after your first at-fault accident. Keep in mind that accident forgiveness only applies to the first accident; future ones could still lead to higher premiums.
How much Ontario car insurance do I need?
The minimum required liability coverage, which includes uninsured or underinsured motorists, is $200,000, but many people opt for at least $500,000, $1 million, or $2 million to cover potential costs if they’re at fault in an accident. Drivers can choose to increase this minimum for additional protection by adding the OPCF 44R Family Protection Endorsement to their policy.
As for accident benefits, mandatory coverage provides up to $65,000 for non-catastrophic injuries and up to $1 million for catastrophic injuries. However, 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, yes. In Ontario, you can own a car without insurance. However, you cannot legally drive or register it without valid insurance coverage. Ontario law requires every vehicle on the road to have at least the mandatory minimum insurance, which includes liability coverage, accident benefits, and uninsured motorist coverage. If you plan to drive a car, or if there is a chance someone else may drive it, it must be insured to avoid severe penalties like fines, licence suspension, and vehicle impoundment.
How can I find cheaper auto insurance in Ontario?
Even though Ontario has the highest driving costs in Canada, you can still lower your car insurance premiums. The best way to save is to keep a clean driving record. Also, before buying a car, research the model and ask your insurance broker how it will affect your premium. Here are some other tips to help you lower your insurance premiums:
Shop around
When shopping for auto insurance, comparing quotes from several insurance companies can help you find the best rates. Never settle for your first quote.
Increase deductibles
Opting for a higher deductible, the amount you pay out of pocket before insurance kicks in can lead to lower monthly premiums. If you’re financially comfortable with the potential deductible cost after an accident, this option can save you money over time.
Bundle policies
Insurance companies often offer discounts when you bundle multiple policies, such as home and auto insurance. By bundling, you can benefit from a multi-policy discount, which reduces your total insurance bill. It’s crucial that all drivers on your policy have clean records to maximize these savings.
Choose the right coverage
Assess your needs before picking a coverage level. “Full coverage,” which includes comprehensive and collision insurance, costs more than liability-only coverage that pays for damages you cause to others. Similarly, policies offering $2 million in liability coverage will be pricier than those providing $1 million. Consider the level of risk you can handle and find a balance that aligns with your budget.
Ask about discounts
Car insurance companies offer discounts for students, winter tires, telematics devices, multi-vehicle discounts, retired drivers, and more. Ask your insurance provider or insurance broker about any discounts you may qualify for.
Maintain continuous coverage
Regular, on-time premium payments help ensure that your policy remains active. Avoid lapses in coverage, as they could result in higher rates or difficulties obtaining insurance in the future.
How much is insurance for a new driver in Ontario?
Insurance rates vary based on each person’s situation, demographics, and other factors, making it difficult to give an exact cost. However, in Ontario, most premiums for young females tend to range from $4,365 to $5,975, while for young males, the range is between $4,950 and $7,825.
The truth is that car insurance rates are usually higher for inexperienced drivers compared to more experienced drivers. Insurance companies consider young drivers more likely to have accidents because they have less experience. Because of this, insurance companies see a direct link between age and risk. As a new driver with little experience, you are more likely to have an accident, which puts you at a higher risk and leads to higher rates.
While it might seem unfair, the Canadian Human Rights Commission allows insurance companies to use factors like age, sex, and marital status when calculating insurance premiums.
However, as young Ontario drivers move up the graduated licensing system (from a G2 to a G licence), and gain more experience on the road, their rates will likely go down. Overall, young drivers should expect higher-than-average insurance costs until they maintain a clean driving record for at least seven years.
Does getting your G licence in Ontario lower your insurance?
Yes, getting a full G licence in Ontario often lowers your car insurance rates. Insurance companies view drivers with a G licence as more experienced and less risky compared to those with a G1 or G2. As a result, these drivers tend to qualify for lower insurance premiums. However, other factors like age, driving history, and the type of car also affect the overall rate.
6 tips for keeping monthly car insurance rates low in Ontario
Are you looking to save money on monthly car insurance in Ontario? BrokerLink can help. Below, our experts have put together a list of tips and tricks to help you keep your monthly car insurance rates low:
Maintain a good driving record
Our first tip to keep your monthly insurance costs low is to maintain a spotless driving record. Insurance companies consider your driving record a major factor when calculating premiums. A clean record, free from accidents, tickets, demerit points, and charges for driving under the influence, shows insurers that you’re a safe driver who follows the rules. They usually reward this with a lower rate.
Choose annual over monthly payments
Another way to reduce your monthly car insurance costs in Ontario is to pay for your policy annually instead of monthly. If you can afford it, it’s better to pay upfront rather than in instalments because many insurance companies add extra administrative fees to monthly payments, making them more expensive in the long run.
Don’t let your car insurance expire
Our third tip is always to maintain continuous car insurance coverage. If your insurance lapses, insurers may view you as a higher risk, which could mean higher rates when you try to renew your expired car insurance. Even if you’re not driving, it’s important to keep your policy active or switch to a different plan instead of letting it expire.
Choose a car known for affordable car insurance
The make, model, trim, and year of your vehicle play a big role in determining car insurance rates. To keep your monthly premiums low, choose a car that is known for affordable insurance rates. Typically, safe, reliable, and budget-friendly cars have lower insurance costs. On the other hand, high-end luxury vehicles like a Bentley or Lexus and powerful sports cars usually cost more to insure.
Opting for a used or older model can also help you save money because they tend to be less valuable, which often means lower insurance rates. In some Canadian provinces, including Ontario, drivers can get discounts for eco-friendly vehicles like hybrids or electric cars. So, buying an electric vehicle could help reduce your insurance costs.
Lastly, car models that are frequently stolen should be avoided since insurance companies consider theft risk when determining premiums. If your car model is often targeted by thieves, your insurance might be pricier.
Install winter tires on your vehicle
Another tip for keeping your monthly insurance rates low is to use winter tires. They are not required in Ontario, but insurance companies know that they make winter driving safer and help reduce accident risks. By putting winter tires on your car, you might qualify for a winter tire discount on your insurance.
Work with a licensed insurance broker
A licensed insurance broker can be your best ally in finding the right car insurance. Brokers have access to multiple insurers and can compare rates and policies to match your specific needs and budget. They can explain all the terms clearly and negotiate for better prices and discounts that you might not find on your own.
Start saving on car insurance today with BrokerLink
Since 1991, the BrokerLink team has been dedicated to finding insurance policies that meet our customers’ needs and budgets. We are experts in all things insurance and can ensure you receive the most competitive rate on your policy. Thanks to our partnerships with top insurance companies, our brokers will shop around for insurance coverage, comparing car insurance quotes on your behalf to find you the best policy at the best price.
You can reach us by phone, email, or in person at any one of our locations throughout Ontario. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive auto insurance 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.
