Why Does Auto Insurance Cost So Much In Toronto?

If you have been following our blogs over the past few months, you know by now that Ontario has the highest auto insurance rates in all of Canada. What you may not have know is that depending on where you live in Ontario, you may be paying substantially more or less than other drivers and you may be wondering why the high auto insurance cost in Toronto? so then, let me ask;

Why Does Auto Insurance Cost So Much In Toronto?

A common questions that I get from readers is “how much is car insurance in Toronto” or “Why Does Auto Insurance Cost So Much In Toronto”. Car insurance experts say the main reason for the high auto insurance cost in Toronto is because of the high rate of fraud. According to the Financial Services Commission of Ontario, average auto insurance rates increased by 1.50% in the third quarter of 2016. Nearly a dozen auto insurers were approved for rate increases, many of which were 5% or higher,  Although the car insurance rates in Ontario has gone down by 9% since 2015-2016. Truth is, it does. Its not uncommon for me to quote Toronto drivers $500+ more for car insurance than drivers who live in other parts of Ontario. But why?

The answer can be broken into to really simple answers.

1) There is a greater risk in Toronto.
2) You are looking at the wrong insurance company.

There Is A Greater Risk In Toronto

It is impossible for anyone to say how exactly every insurance company rates risks in Toronto. However there are several risk factors Toronto drivers face most Ontario drivers don’t.

Private Driveways:

Most drivers in Ontario have their there own private driveways. Many drivers in Toronto don’t have this luxury and are forced to park in public spaces or parking garages. This increases the risk of physical damage being done to your vehicle.


People who are familiar with driving in Toronto are used to the countless pedestrians who put themselves in danger but that doesn’t mean there is any less of a risk. All other areas of Ontario are not as densely populated as Toronto, making drivers less likely to hit a pedestrian.


The commute to Toronto is considered one worlds worst commutes with the average commute time being 80 minutes in both directions. Insurance companies know this and they also know that the more time you spend driving, the more likely you are to get into a car accident.

Now that we’ve established why you are going to pay more than drivers from other parts of Ontario, lets look at another reason why Toronto drivers are paying so much for their car insurance.

You Are Looking At The Wrong Insurance Company

Remember that New Kids On The Block song “The Right Stuff”? Well “The Right Stuff” applies to where your buying your auto insurance.

Insurance providers are like clothing stores, there is a different store for everyone. There are stores for ladies, men, children and even hipsters. That same rules apply insurance companies. Some insurance companies want young drivers, others don’t. Some want high risk drivers, while others reject their applications.

How do you tell if your with an insurance company that doesn’t really want your business? You can usually tell an exorbitant more in premium than other companies have quoted you. I mention this in another blog here. This problem can be easily remedied by shopping around for lower car insurance rates.

Car Insurance Rates Ontario

According to Adapted from “The Personal Cost and Affordability of Auto Insurance in Canada”, Fraser Institute (2011), below is the average car insurance rate by province in the Ontario

ProvinceAverage Rates
British Columbia$1,113
Newfoundland & Labrador$749
Nova Scotia$736
New Brunswick$728
Prince Edward Island$695

Ontario Auto Insurance Rate Changes

See the cart below for insights about how Ontario car insurance rates has changed over time.

QuarterRate change
2016 Q4 (Oct. 1 – Dec. 31)-0.14%
2016 Q3 (July 1 – Sep. 30)+1.50%
2016 Q2 (Apr. 1 – June 30)+0.33%
2016 Q1 (Jan. 1 – Mar. 31)-3.07%
2015 Q4 (Oct. 1 – Dec. 31)-0.15%
2015 Q3 (July 1 – Sep. 30)-0.50%
2015 Q2 (Apr. 1 – June 30)+0.60%
2015 Q1 (Jan. 1 – Mar. 31)-0.95%
2014 Q4 (Oct. 1 – Dec. 31)-0.54%
2014 Q3 (July 1 – Sep. 30)-0.11%
2014 Q2 (Apr. 1 – June 30)+0.22%
2014 Q1 (Jan. 1 – Mar. 31)-1.01%

Source: fsco.gov.on.ca

How to Get Cheap Auto Insurance in Ontario

So far, there are many ways you can get cheap car insurance in Ontario. Below are some smart things to do to get cheap car insurance rates in Toronto:

  • By Comparing quotes online.
  • Pay your premiums on time.
  • Choose the right insurance coverage that is best for you.
  • Make sure to complete a certified driver training program.
  • Try using same company to insure all your vehicles.
  • Use winter tires (insurers offer discounts for using it)
  • Try to bundle your home insurance with your auto insurance
  • Maintain a good driving record/history (drive carefully and obey the rules of the road to avoid falling into the high risk drivers category).

so since auto insurance required in Ontario is a must have thing by  law, all Ontario drivers must carry car insurance for their vehicles to avoid the penalties of not having one.

get one or be convicted to pay a fine ranging from $5,000 to $25,000 for their first offence and Second offence fines of 10,000 to $50,000 range with your driver’s licence suspended for up to a year (not really a must) if you’re driving without insurance in Ontario.

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