Owning a car isn’t what it once used to be. The convenience and freedom of driving a car comes with an ever-increasing price tag. Over the last 18 months, Ontario car insurance rates have climbed 12%. There are a variety of factors that are driving these increases. Let’s take a closer look at why car insurance rates keep climbing.

Most expensive car insurance in Ontario

The province of Ontario currently sits third in Canada for highest car insurance rates at $2,299 per year behind Alberta and Nova Scotia. In December of 2021, that last time Ratesdotca surveyed the province, the average estimated auto insurance premium was $1,555. This was based on sample quotes for a 35-year-old male driver with a clean driving record who drives a four-door sedan. Now, the company estimates the average premium to be $1,744. Within Ontario, Brampton once again holds the top sport for highest premiums in the province. Residents pay a whopping $2,707 per year, up 37%. It has regained the top spot (from last year’s most expensive insurance city, Vaughan) at $2,170 annually.

This is the largest increase recorded by the Insuramap survey, with the average estimated premium in Ontario sitting at $1,744, compared to a previous estimate of $1,555. The RATESDOTCA report also notes that drivers in the Golden Horseshoe (the urban region that hugs Lake Ontario, stretching from Niagara in the south to Orillia in the north and Peterborough in the east) pay the highest insurance rates—and this is consistent year-over-year.

Several factors contribute to these high rates:

  • Congestion
  • Longer daily commutes
  • Higher than average vehicle prices

Another contributing factor is the larger number of new drivers in the Golden Horseshoe. A high concentration of new Canadians relocate to southern Ontario. They will end up paying higher insurance rates due to their lack of insurance history in Canada.

Reasons for car insurance rate increases

There are several reasons for the surge in Ontario car insurance rates, including:

For an in-depth explanation of factors that affect current insurance rate increases, please click here. 

How claims cause car insurance rates to climb

One of the main reason for spikes in insurance rates is the result of more people filing claims with greater frequency and higher amounts. “If I was to pull someone’s history in Brampton, I’m far more likely to see injury claims,” notes RATESDOTCA insurance expert, Daniel Ivans, in the report. “[Insurers] are not worried about the car repairs. They’re worried about accident claims.”

A payout for an accident claim (compared to a claim for car repairs) is the most expensive type of claim. This is because it includes:

  • Medical bills for treatment not covered by OHIP
  • Lost wages
  • Rehabilitation and more
  • An accident claim may also include a civil suit

In the big city, expenses are high and money is first and foremost on people’s minds. It’s not uncommon for people who find themselves in an auto accident to begin to wonder, ‘How do I get money out of this?’

To view the top 10 ranking of Most Expensive Car Insurance Rates, please click here.

More car insurance rate hikes on the horizon

Rates are expected to rise even higher, Ivans asserts, as car coverage companies look to catch up with inflation. “Just because they were allowed to increase [their rates], doesn’t mean it’s enough to take care of their losses from the last few years. There’s some fine-tuning to come,” Daniel Ivans says in the report. Late last year, the rising rate of inflation pushed a number of insurers in Ontario to request permission from the provincial regulator to increase rates. The Financial Services Regulatory Authority (FSRA) has approved 22 increase requests since the beginning of this year, with the average change per insurer sitting at 6.5%.

Ways to save on your insurance premiums

Auto insurance rates are determined by many factors outside your driving record and how much you drive. The simplest way to combat rising Ontario car insurance rates is to shop around. Luckily, Ontario’s private auto insurance market means that there is a sizeable selection of insurance companies to choose from. We can help you find a policy that’s affordable and that offers the right amount of protection. Speak to one of our isure representatives to help you get the most competitive rates for your Ontario city!

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