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How Much Does Car Insurance Cost in Ontario?

Car insurance goes hand-in-hand with vehicle ownership. Not only is it a legal requirement for all road users, but it offers you financial protection should the worst happen. While the benefits of car insurance are clear, it can also come with a significant cost.

Ontario consistently ranks among the provinces with the highest auto insurance rates. In this blog, we’ll delve into the factors influencing these costs, how they compare to other provinces, and what you can do to manage your expenses. Whether you’re a new driver or someone seeking to reduce their premiums, understanding auto insurance rates in Ontario will help you make informed decisions.

Average Car Insurance Cost in Ontario

The average cost of car insurance in Ontario is around $1,800, which works out to be $150 per month. However, these average costs don’t begin to paint the full picture of what you may ultimately need to pay.

There is a good chance you’re reading this as you are young and/or recently passed your driving test. If so, then your insurance rates are going to be much higher, often reaching as much as $6,000 per year. These rates are determined by an insurer’s risk assessment, where younger and less experienced drivers are perceived as more likely to be involved in accidents.

Conversely, seasoned drivers with a long history of safe driving can enjoy considerably lower premiums. While the average rate provides a general benchmark, understanding the specific factors that influence your costs is essential.

There are other factors that can affect car insurance premiums too. This is why it’s a good idea to know what these factors are and to get a quote. Read on to get much more information about your car insurance premium.

car insurance agent

Why Is Car Insurance in Ontario So Expensive?

Ontario is home to some of the highest auto insurance rates in the country. To understand why, we need to look at the key reasons behind these elevated costs:

High Population Density
Ontario, particularly urban centers like Toronto, has a high population density. More vehicles on the road mean a greater likelihood of accidents and claims, which drives up premiums.

  1. Private Insurance System
    Unlike provinces like Quebec, which have public insurance systems that keep costs low, Ontario relies on private insurers. This market structure, coupled with regulatory requirements, contributes to higher rates.

  2. Fraudulent Claims
    Ontario faces a significant issue with fraudulent insurance claims, particularly in the Greater Toronto Area (GTA). These false claims inflate overall costs for insurance companies, which are then passed on to consumers.

  3. Comprehensive Coverage Mandates
    Ontario has strict insurance requirements, including mandatory accident benefits and liability coverage. While these provide greater financial protection, they also result in higher premiums.

Comparison with Other Provinces

Compared to other provinces, Ontario has one of the highest levels of car insurance. There are a few key reasons for that, with one being its risk profile. Areas with high population density and higher crime rates will see higher insurance premiums. Density and crime rates are always higher in urban areas, compared to those which are more rural.

There are also regulations to consider. Quebec has one of the lowest average premiums around $750. This is largely due to its public insurance system that covers basic injury claims. Provinces such as Ontario rely on private insurers instead of being government-run.

This doesn’t mean that everyone in Ontario will pay the same rates. If you live away from the major cities, then density and crime rates will be lower, and this will be reflected in your price. But if you live in Toronto, for example, expect higher premiums.

Cost Variations Across Ontario

Your location within Ontario plays a major role in determining your auto insurance rates. Rates are typically higher in urban areas like Toronto and Mississauga due to increased traffic and crime rates. Here’s a comparison of average annual premiums in different regions:

  • Toronto: $2,000 – $2,500
  • Mississauga: $2,100 – $2,400
  • Ottawa: $1,200 – $1,500
  • Hamilton: $1,600 – $2,000
  • London: $1,300 – $1,700
  • Rural Areas: $1,000 – $1,200

Drivers in smaller towns or rural areas often enjoy lower premiums due to reduced traffic congestion and crime rates.

Cost Variations by Age Group 

We mentioned it there but by far the biggest factor is age. It’s only until around the age of 25 that you’ll see premiums come down to anything near the average cost we mentioned above. Let’s check out a more detailed breakdown.

Young Drivers (16-24 years old): $3,500 – $6,000 per annum
Mid-Age Drivers (25-50 years old): $1,200 – $2,400 per annum
Senior Drivers (50+ years old): $1,000 – $1,500 per annum

As you can see, this is a considerable difference in what young drivers need to pay, especially in Ontario. This is why it’s especially important for young drivers to know how to get their premiums down as much as possible. 

Factors Influencing Car Insurance Rates 

Aside from age and location, there are several other factors that will affect your quote. Let’s take a look at what they are.
Driving History – To get the lowest premiums you’ll want to have a clean driving record with no history of accidents or any traffic violations. Also, the longer you’ve been driving without a claim, the more trusted you’ll be.
Type of Vehicle – If you’re worried about high premiums, then you need to avoid having an expensive or high-performance car. This will be seen as a bigger risk of accidents, a more likely theft target, and more expensive to repair.
Usage – Those that have high mileage requirements will also need to pay more than occasional drivers. If you use your vehicle for business use, then it’s likely you’ll need a separate policy or an add-on for this.
Coverage and Deductible – There are different types of coverage options available. Basic is the cheapest, with other types being more expensive. Added to this, the lower the deductible, the higher your premium will be.
Other Factors – There are many other factors that can affect your premium, but not as much as others. Examples include your credit score, marital status, occupation, previous insurance coverage, and any discounts that you’ve had.

Related Article: https://www.marathoninsurance.ca/blog/does-it-cost-more-to-insure-a-car-for-business-use/

Tips to Lower Car Insurance Costs 

From the tips above, you’ve probably been able to work out a few ways to reduce your premium. Here are some other suggestions to get the best possible quote.

Shop Around – Compare quotes from multiple different insurance providers or use an insurance broker to help you find the best rate.

Bundle Policies – See if your insurer will give you a discount for having multiple policies with them.

Install Safety Features – Vehicles equipped with anti-theft devices or advanced safety features can qualify for lower rates.

Take a Defensive Driving Course – Some insurers offer discounts for completing a defensive driving course.

Use Telematics – Some insurers offer usage-based insurance. This will reward your good driving with lower premiums.

Related Article: https://www.marathoninsurance.ca/blog/what-are-some-tips-to-lower-car-insurance-in-ontario/

tips to lower car insurance costs

The Role of Brokers in Finding Better Rates

Insurance brokers can be invaluable in navigating auto insurance rates in Ontario. They work with multiple insurers to find policies tailored to your needs, often securing discounts you might not find on your own.

Final Thoughts

Car insurance in Ontario can be expensive, especially for younger drivers. While premiums may be high compared to other provinces, it’s important to understand the factors that go into your insurance cost and look at ways to reduce them.
If you want to find the best rate for your car insurance or have more questions, then it’s a great idea to contact us today. Here at Marathon Insurance, we can work with you to find a policy that suits your needs.

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