Buying auto insurance for the first time can feel overwhelming. Between comparing quotes, choosing coverage, and understanding deductibles, it’s easy to make decisions that could cost you more in the long run. Whether you’re a new driver, new to Ontario, or simply purchasing your own policy for the first time, avoiding a few common mistakes can help you find the right coverage at a competitive price. This guide explains 5 auto insurance mistakes, why they matter, and how working with an experienced insurance broker can help you make informed decisions.
Key Takeaways about 5 Auto Insurance Mistakes
Shop Around: Insurers evaluate risk differently; comparing quotes across multiple providers can yield significant savings.
2026 Regulatory Reforms: As of July 1, 2026, many Statutory Accident Benefits (like Income Replacement) became optional opt-ins in Ontario.
Opt for $1M–$2M Liability: Ontario’s legal minimum ($200,000) is rarely enough to cover serious claims or court settlements.
Disclose Accurately: Misrepresenting drivers, annual mileage, or vehicle use can void your coverage during a claim.
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Ontario Auto Insurance Facts (2026)
Ontario drivers must carry at least $200,000 in third-party liability coverage (many drivers choose $1–2 million). Third-party liability coverage is the portion of an insurance policy that protects you if you’re sued (or threatened to be sued). This can be for a physical injury or damage to someone else’s property that you cause. Also known as “legal liability coverage,” this section of your car insurance policy is set up to cover legal fees, the amount of money you have to pay to settle a lawsuit, and other expenses.
Auto theft continues to be one of the fastest-growing insurance costs in Ontario. IBC’s latest data highlights where theft-related claims are highest across the province:
- Toronto: $114.5 million (up 253% since 2017)
- Brampton: $43.2 million (up 565% since 2017)
- Mississauga: $31.5 million (up 216% since 2017)
- Ottawa: $19.8 million
- Hamilton: $19.4 million
Vehicle maintenance and repair costs in Canada have risen by 4.1%, driven by Advanced Driver Assistance Systems (ADAS), specialized labour pressures, and imported parts tariffs. A minor fender bender can now exceed $3,500 because of sensors and cameras embedded in bumpers and windshields.
Insurance premiums are affected by driving history, vehicle type, location, annual mileage, and claims history. From maintaining a clean driving record and choosing a vehicle with strong safety features to reviewing your coverage and exploring available discounts, making informed decisions can help you find opportunities to save without sacrificing the protection you need.
5 Auto Insurance Mistakes that are Avoidable
While every driver’s situation is different, many first-time buyers make the same avoidable mistakes when purchasing auto insurance. Understanding these common pitfalls can help you choose the right coverage, avoid unnecessary costs, and feel more confident when comparing policies.
1) Accepting the First Quote Without Shopping Around
Every insurance company evaluates risk differently, meaning two insurers can offer very different premiums for the same driver. Comparing quotes helps ensure you’re receiving competitive pricing and the coverage that best suits your needs. Taking the time to compare quotes can help you find not only a competitive premium but also a policy that provides the coverage and features that best fit your needs. When comparing policies, look beyond the price and consider:
- Coverage limits and deductibles
- Optional coverages and endorsements
- Available discounts (such as bundling home and auto insurance or insuring multiple vehicles)
- Claims service and customer support
- Payment options and policy flexibility
Did You Know? Insurance premiums are based on many factors, including your driving record, claims history, vehicle type, where you live, annual mileage, and how you use your vehicle. Because every insurer assesses risk differently, comparing quotes can help you identify the coverage that offers the best overall value, not just the lowest price.
2) Not Understanding Your Coverage
Buying auto insurance isn’t just about finding the lowest premium; it’s about understanding what your policy actually covers. Many drivers purchase a policy and don’t review it again until they need to make a claim. Unfortunately, that’s often when they discover they misunderstood their coverage or assumed something was included when it wasn’t. Take the time to review your policy and ask questions before you purchase or renew your coverage. Understanding your deductibles, optional coverages, and policy limits can help you avoid unexpected expenses after an accident.
Questions every driver should ask:
- What deductible am I responsible for if I make a claim?
- What optional coverages are available?
- Do I have accident forgiveness or accident benefits enhancements?
- Is rental vehicle coverage included?
- How do I report a claim if an accident happens outside regular business hours?
Important 2026 Ontario Policy Update: Under FSRA regulations effective July 1, 2026, medical and rehabilitation benefits remain mandatory, but extended benefits such as Income Replacement ($400/week), Caregiver, and Housekeeping coverage became optional opt-in coverages. If you rely on your income to pay bills, ensure your broker includes these optional accident benefits on your policy.
3) Selecting a High Deductible You Can’t Afford Out of Pocket
Increasing your deductible is one way to lower your insurance premium, but it’s important to understand the trade-off. While a higher deductible may reduce your monthly insurance costs, it also means you’ll pay more out of pocket if you need to make a claim. Before increasing your deductible, consider whether you could comfortably afford that amount if your vehicle were damaged tomorrow. Choosing a deductible that fits your financial situation can help you balance affordable premiums with manageable out-of-pocket costs.
Lower Deductible | Higher Deductible |
Higher monthly premium | Lower monthly premium |
Lower out-of-pocket costs after a claim | Higher out-of-pocket costs after a claim |
May suit drivers who prefer predictable expenses | May suit drivers who have savings available for unexpected repairs |
There’s no one-size-fits-all deductible. The right choice depends on your budget, driving habits, and comfort level with financial risk.
4) Buying Only the Minimum Required Coverage
Ontario law requires drivers to carry at least $200,000 in third-party liability coverage, but many insurance professionals recommend considering $1 million or $2 million in liability protection. If you’re found responsible for a serious collision, medical expenses, legal costs, and property damage can quickly exceed the provincial minimum. In addition to liability coverage, consider whether optional coverages such as collision, comprehensive, or all-perils insurance are appropriate for your vehicle. These coverages can help protect against losses caused by theft, vandalism, falling objects, fire, severe weather, and certain types of damage that aren’t covered by mandatory insurance.
Choosing the right coverage depends on several factors, including:
- The age and value of your vehicle.
- Whether your vehicle is financed or leased.
- How often and how far you drive.
- Your financial ability to repair or replace your vehicle after a loss.
Rather than focusing only on the lowest premium, choose coverage that reflects your individual needs and the level of financial protection you’re comfortable with.
Did You Know? While $200,000 is the legal minimum for third-party liability coverage in Ontario, many drivers choose higher limits because lawsuits and injury claims can exceed the minimum required coverage.
5) Providing Inaccurate Information on Your Application
Providing accurate information when purchasing auto insurance is essential. While some people intentionally misrepresent information to try to lower their premium, many inaccuracies are simply honest mistakes or the result of outdated information. Either way, incorrect information can affect your coverage and may delay or even jeopardize a future claim. Insurance companies rely on the information you provide to assess your level of risk and determine your premium. If your circumstances change during your policy term, it’s important to notify your insurer or broker so your policy remains accurate and up to date.
Information You Should Always Disclose
Some of the most common details that affect your auto insurance include:
- How your vehicle is used (personal, commuting, or business)
- Your estimated annual mileage
- Who regularly drives the vehicle
- Where the vehicle is primarily kept overnight
- Any modifications made to the vehicle
- Previous claims, driving convictions, or licence suspensions
- Adding a young driver to your policy
Providing complete and accurate information helps ensure you have the right coverage and reduces the risk of unexpected issues if you ever need to file a claim.
Did You Know? Even if a mistake on your application was unintentional, it’s important to correct it as soon as possible. Keeping your policy information current helps ensure your coverage accurately reflects your situation.
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Questions About 5 Auto Insurance Mistakes, Answered
Is it worth shopping around for car insurance every year?
Yes. Insurance rates and discounts change regularly, so comparing quotes at renewal can help ensure you’re still receiving competitive pricing.
It depends. A higher deductible lowers your premium but increases what you’ll pay if you make a claim.
Is minimum insurance enough?
Minimum coverage satisfies Ontario’s legal requirements, but many drivers choose higher liability limits for greater financial protection.
What happens if I provide incorrect information on my insurance application?
If incorrect information affects how your policy was rated or issued, your insurer may adjust your premium, change your coverage, or investigate the issue during a claim. Updating your policy whenever your circumstances change helps prevent complications.
Do I need to tell my insurer if my driving habits change?
Yes. Changes such as moving, changing jobs, increasing your annual mileage, using your vehicle for business, or adding another driver to your household can all affect your policy. Contact your insurer or broker whenever these changes occur.
Be Cautious before making any Auto Insurance Mistakes
Choosing auto insurance is about more than finding the lowest premium; it’s about making sure you have the right protection when you need it most. Taking the time to compare quotes, understand your coverage, choose a deductible that fits your budget, and provide accurate information can help you avoid costly surprises down the road. If you’re unsure which policy is right for you, an isure insurance broker can help.
Your broker can compare coverage from multiple insurance companies, explain your options, answer your questions, and recommend coverage that fits your vehicle, driving habits, and budget. Contact us or request a quote today, and make your insurance shopping that much easier!
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