Auto insurance prices

Without a doubt, car insurance rates represent the highest insurance cost for Canadians. Car insurance cost is significantly higher than the cost of house insurance, and it’s even higher than most life or health insurance premiums. However, car insurance rates vary significantly across Canada. For example, the average car insurance rates in Ontario are $1,920 per year, but annual insurance premiums are only $912 in Quebec and $1,092 in Nova Scotia.
Well, annual car insurance premiums in Ontario can be compared to a few things…
1,222 medium coffees at Tim Hortons
640 single fares for adults or 960 single fares for seniors in Toronto
One flight from Toronto to Sydney, 3 flights from Montreal to Vancouver or 8 flights between Calgary and Edmonton
Tanking approx. 25 times
Why car insurance rates in Ontario are so high?
Despite the fact that there have been government-led initiatives to reduce car insurance rates in Ontario, they continue to be the highest in the Country. There a number of reasons for this, but the main ones are that Ontario has:
Sufficient space for insurance fraud; and a high level of claims payouts
Highest population density
The worst roads
High rate of vehicle theft
Average car insurance rates in Ontario compared to the rest of Canada
When you look at the data we compiled at InsurEye and presented on the visual overview, you can see what the average cost of car insurance is in various Canadian provinces (only provinces with enough data points are represented on the chart).
Average Car Insurance cost in Ontario
Car insurance premiums in Ontario – what affects the rates
There are a lot of factors that play a role in car insurance rates in Ontario, such as e.g. location, car make and year, driving experience, driving history,
age, marital status, level of coverage, additional benefits. The ones with the largest impact in the cost of car insurance are driving history/tickets and age. Also gender is considered when calculating your car insurance rates.
Gender: The attached chart shows how gender impacts car insurance rates – on average, women pay slightly less than men; and this is based on accident history. Although it’s important to note that women don’t have less accidents than men, their accidents tend to be less costly.
Average Car Insurance cost in Ontario — Men and Women
Driving History: A driver’s history is a factor that greatly impacts car insurance rates. On average, drivers with a clean driving record in Ontario pay $1,812 per year; whereas those with more than two violations in the last three years, or a license suspension in the last six years, pay $3,252 per year, which is almost double the amount. Searching for high-risk vehicle insurance? We can help.
Average Car Insurance cost in Ontario — Driving History
How to Reduce the Car Insurance Rates in Ontario
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The good news is that there are dozens of ways to reduce your car insurance costs; and they range from buying your insurance in a bundled package with your home insurance, to completing a driving course, to customizing your protection options and deductibles. The best way to lower the average car insurance costs in Ontario is for individual drivers to do what they can to reduce their car insurance costs.
Our Periodic Table of Car Insurance Savings will guide you through all the possible options you have to save on your car insurance in Ontario. Hopefully we’ll be able to help you put a dent in the average car insurance rates in Ontario from the current rate of $1,920 per year.
Nick Dasko bought his first car when he was 22 – a seven-year-old Mazda Protege that cost him $10,000. Then came the insurance bill: more than $6,000, even though he had no tickets or at-fault accidents.
Some of his friends were paying even more – $10,000 was not unheard of.
Ontario has the highest auto insurance rates in Canada, with the average annual premium at $1,544.86 in 2012– 45 per cent more than in Alberta, the second-most costly. For young men like Dasko in the 16-to-24 age group, the hit is the worst – classified by the industry as high risk, they are charged stratospheric rates.
Auto insurance is the wild west of compulsory services. If you want to drive, you have no choice but to buy it – but what you pay varies wildly. According to quotes obtained Tuesday from, a 20-year-old male in Winnipeg with a clean driving record would pay $1,396 driving a 2008 Honda Civic DX two-door coupe for pleasure (not to commute to school or work) and compiling 15,000 km/year. In Calgary, that same driver would pay between $2,973 and $3,789. In Toronto, the bill would range from $4,239 to $9,270 – an increase of 664 per cent.
The obvious question – why?
While it costs more to cover claims in Ontario (the province is plagued by insurance fraud) private insurers claim that the actuarial evidence used to rate drivers shows that males under 25 have the worst statistical record as a group. Consequently, individuals in the 16-to-24 group pay more, even if they’ve never been involved in an accident or received a ticket for a traffic violation. Essentially, young men are deemed guilty until proven innocent – at age 25.
«You are being prejudged,» says Dasko. «It’s the last legal form of discrimination.»
Public auto insurance programs, such as those in Manitoba and Saskatchewan, take a different approach. Standard rates apply to every driver, regardless of age or gender. Auto insurance is much less expensive for a 20-year-old full-time student in Winnipeg driving the same car as his counterparts in Toronto, Montreal and Calgary.
The private insurance industry defends the actuarial approach. «It’s not discriminatory,» says Pete Karageorgos, manager of consumer and industry relations for the Insurance Bureau of Canada. «It’s based purely on statistical analysis. It’s like charging more for house insurance in a high-risk neighbourhood. I think people have accepted this. In a public auto insurance system, young drivers are subsidized. In Ontario, young drivers pay rates that reflect their actual risk.»
Statistics show that young drivers do cause a disproportionate amount of damage. Drivers aged 16 to 24 represent 13 per cent of the driving population, but account for 24 per cent of fatalities and 26 per cent of serious injuries. The question is whether Ontario’s steep insurance charges for young drivers accurately reflect actuarial data.
State Farm Insurance spokesman John Bordignon says Toronto is a «special case»: «It’s got the highest population density, the worst roads, and a high rate of theft. The costs reflect those risks.»
Contrary to the public system, in Ontario, Alberta and other provinces, every driver must help bear layers of extra costs. Ontario’s industry is made up of more than 100 private companies that are overseen by a government agency called the Financial Services Commission of Ontario. Revenue comes from two sources – insurance premiums, and the money insurers make by investing the money consumers give them.
Private insurers say that their system has the built-in advantage of competition: «If you’re not satisfied with your insurer, you can go shop around,» says Karageorgos. «With government insurance, there’s no choice. Private insurance gives you better service.»
Not everyone agrees. The Consumers Association of Canada (CAC) deems private auto insurance to be one of the biggest rip-offs that Canadians face. After studying the industry for years, CAC concluded that a properly run public insurance system was the best choice, but found itself locked into a debilitating public relations battle with the private industry.
«There are some things that should be run by private industry,» says CAC president Bruce Cran. «And there are others that should be in the hands of government. Auto insurance is one of them.»
Cran says that excessive insurance charges affect everyone, not just drivers: «The costs run through the entire economy,» he says. «Everything you buy, every last piece of bread you eat, is carried in a vehicle that has to be insured. So we all pay, whether we have a car or not.»
The CAC’s investigation of the insurance industry yielded interesting insights into the way it operates, and why costs are so high. In 2004, for example, CAC learned that private insurers had paid $290-million in secret commissions to insurance brokers who steered business their way. This practice had a direct impact on consumers – instead of hunting for the best price for their customers, brokers sold the policy that offered them the highest commission.
A public auto insurance system can offer fundamental business advantages. Most important, a public system reduces overhead costs – instead of multiple companies, each with its own head office, computer systems, etc., there is just one, which cuts duplication and creates efficiencies of scale.
Other significant savings include profit margin (public insurance systems don’t have to pay dividends to shareholders) and advertising – public systems don’t have to budget for TV spots and a talking gecko. Public insurance plans can also control costs more effectively – body shops, medical clinics and towing companies must comply with rates set by the public plan, which wields monopoly power over suppliers. Ontario’s private insurers, on the other hand, face ongoing problems with gouging and fraud.
As with U.S. health care, the debate over private and public auto insurance has been cast along ideological lines that obscure underlying economic realities. Ontario’s private insurance firms admit that rates here are the highest, yet insist that theirs is the superior business model.
Using the website on Tuesday, we obtained quotes for a 20-year-old full-time male student, in the 16-to-24 age group. We listed him as principal driver, clean record, living at home, using a 2008 Honda Civic DX two-door coupe for pleasure (not to commute to school or work) and compiling 15,000 km/year. Deductible was $500 for collision and comprehensive, with $1-million liability. The site harvests quotes from different companies, but those companies do not necessarily quote for all cities; the Canadian Automobile Association does not sell service in Montreal. The Manitoba rate was obtained directly from a dedicated website. *Kanetix provides a «lowest rate» but does not identify it until the consumer calls for a quote.