Updated October 2025: Ontario drivers are still seeing higher car insurance premiums. According to the latest data from the Financial Services Regulatory Authority of Ontario (FSRA), average auto insurance rates have risen again this year due to inflation, rising repair costs, and increased vehicle theft across the province. If you’re renewing your car insurance policy, you may have noticed your premium has gone up — and you’re not alone. FSRA’s 2025 annual rate review and consultation highlight significant market trends that continue to drive auto insurance rate increases in Ontario.
Average Auto Insurance Premiums in Ontario
According to the Financial Services Regulatory Authority of Ontario (FSRA), the average annual premium for a private passenger vehicle in Ontario was approximately $2,120 as of June 2025. This represents a 4.1% increase compared to 2024.
Regional differences are significant:
- Greater Toronto Area (GTA): $2,765
- Other Urban Areas: $2,031
- Rural Areas: $1,698
What Affects Auto Premiums in Ontario?
Your car insurance premium is the amount you pay your insurance company in exchange for insurance coverage. Your premium may change due to an insurer’s approved rate change. Premium changes can also be a result of changes in your own circumstances, such as:
- Type of vehicle
- Moving to a new location
- Purchasing a new vehicle
- Personal driving characteristics (age, gender, etc.)
- Driving record
Regional Variations in Premium Increases
Some cities have experienced larger increases over the past year:
| City | Increase | Average Premium 2025 |
|---|---|---|
| Kingston | +14.73% | $1,581 |
| Barrie | +13.78% | $1,915 |
| Windsor | +12.69% | $1,891 |
| Innisfil | +12.15% | $2,216 |
| Belleville | +11.92% | $1,652 |
| Brampton | +10.92% | $3,341 |
Factors Affecting an Increase in Auto Insurance Rates
Several key factors are contributing to higher auto insurance premiums in Ontario:
Inflation and Rising Costs
The price of vehicle parts, repairs, and services continues to climb, increasing claims costs. Your premiums are affected by rising inflation and its impact on the prices of goods and services. According to Statistics Canada data, the average premium in 2025 is $2,120 (FSRA, June 2025). Vehicle shortages that caused an upswing in prices during the COVID-19 pandemic, when demand was forecast to dwindle significantly. Automakers cut production, and in turn, so did other manufacturers that supply them with parts. At the same time, the pandemic boosted demand for cars. The domino effect of supply-chain issues pushed the industry to boom like never before, leaving many car sellers just as desperate as buyers.
Physical Damages
Usually, when your vehicle is in an accident, an adjuster will either send it for repairs or write it off for a cash settlement. A shortage of labourers in auto body repair is driving up wages, while a shortage of replacement parts is leading to higher costs and longer wait times. This, therefore, increases the need for rental vehicles. As dealerships sell new and used vehicles at or above list price due to the inventory shortage, replacing your car can be more expensive if your vehicle is a write-off. According to Storah, “For us, that means not only are cars more expensive to fix or to replace, but it also means customers are in rental cars for longer because their cars are in body shops for longer.” Canadian drivers can expect their car insurance premiums to increase when their policy is up for renewal.
Advanced Vehicle Technology
New vehicle technology also contributes to rising insurance rates. Modern vehicles equipped with sensors, cameras, and advanced safety systems are more expensive to repair, raising average claim costs. For example, most cars now have rear-view cameras and sensors at the back bumper. This means the repair includes not just the bumper but also the technology in it. In the past five years, physical damage costs per claim increased by 22.5%. According to the General Insurance Statistical Agency (GISA), it continues to grow at a rate of 7.4% per year. These increases can be explained by rising prices for automobile parts and escalating labour costs.
Increased Exposure
A change in how much we drive affects premiums. With more vehicles on the road and drivers logging higher mileage, the frequency of accidents has risen. More cars on the road lead to more collisions and higher claim costs. Data shows that 2021 saw a 2% increase in the number of vehicles insured compared to 2020. It is not unfair to assume this in light of the loosening of pandemic restrictions. To support this, the latest cell phone mobility data shows that Ontarians’ driving behaviour is now trending towards pre-pandemic levels, meaning more drivers are on the road.
Vehicle Theft
Increased vehicle theft activities are also a driver of higher physical damage claims. There is no denying that advancements in automobiles have made driving much more convenient. However, we need to remember that it can also cause corruption. New technology, such as smart keys, has made stealing your vehicle easier. A pandemic-driven shortage of semiconductor chips needed for new cars has driven the increase in technology-fueled car theft. Over the past five years, the number of theft claims has increased by 40%.
What is FSRA?
Whether you are buying auto insurance or renewing your policy, the Financial Services Regulatory Authority of Ontario (FSRA) regulates insurance companies to ensure their proposed rates are fair, reasonable, and not excessive for consumers. Auto insurers need the regulator’s approval to change the rates they use to calculate customers’ premiums.
Learn more about rate change reviews and how auto insurance rates get approval for every auto insurer in Ontario by visiting their website.
FSRA Annual Review and Consultation
FSRA is conducting a Draft Ontario Private Passenger Vehicles Annual Review for 2025, which examines data such as the number of insured vehicles, average premiums, loss costs, and the effect of recent reforms. The consultation period closed on September 29, 2025, and the findings will inform how insurers set rates in the coming year.
How You Can Manage Rising Premiums
Even with rising rates, there are ways to keep your costs under control:
- Compare Quotes: Shop around and ask your broker about competitive rates.
- Bundle Policies: Combining auto insurance with home or tenant insurance can provide discounts.
- Increase Deductibles: Choosing a higher deductible can lower your premium if you can comfortably cover it in a claim.
- Maintain a Clean Driving Record: Avoid accidents and traffic violations to benefit from lower risk classification.
Increase in Auto Insurance Rates: Bottom Line
Auto insurance rates in Ontario continue to rise due to inflation, higher repair costs, vehicle theft, and increased driving exposure. While the average 2025 increase is around 4%, your personal premium may vary depending on your vehicle, location, and driving history. Please speak with one of our insurance representatives to better understand how today’s market conditions affect premiums. Also, be sure to ask about adding cost-cutting solutions, like telematics, to your policy to help bring down your premiums.
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