Ontario's average estimated auto insurance premium rose 12% in 2023 compared to 2021, according to data from the RATESDOTCA Insuramap, an interactive online map that shows the average insurance rates by postal code. The average estimated premium is currently $1,744, marking the largest increase in the history of the Insuramap survey.
In late December 2021, the last time RATESDOTCA surveyed the province, the average estimated auto insurance premium was $1,555. A lot has changed since. The lifting of COVID restrictions means drivers have mostly returned to their pre-pandemic routines. Meanwhile, operating costs for insurers are rising due to surging inflation, ongoing vehicle and parts shortages, longer wait times for repairs, an uptick in car theft, and a jump in the number and severity of claims filed.
Here are some of the key trends revealed by the data:
Premium averages were estimated by running sample quotes for a 35-year-old male driver with no claims or driving convictions and who drives a four-door sedan. You might be quoted a different amount if you don't fit this profile. For example, drivers in their teens and twenties will pay a higher premium than the ones displayed on the Insuramap, while a person over age 35 could conceivably pay less.
The type of vehicle you drive matters, too. In general, higher-end models that require specialized parts and labour cost more to insure than a popular model with basic trim and easily acquired parts. More information about our methodology is included below.
Rate estimates are based on a 35-year-old driver of a 2019 four-door Honda Civic with a clean driving record.
Rapidly rising inflation triggered numerous Ontario insurers to request permission to increase rates. Rate change requests to the Financial Services Regulatory Authority (FSRA) began trickling in late last year, some of which were major.
For example, the provincial regulator approved a 15% rate increase for one insurer that took effect in April. Another insurer applied to lower rates by 10.5% starting in June, except it concealed a net increase; the insurer ended its pandemic rebate program around the same time, meaning premiums for their customers are going up by 7.5%.
By publication time, 22 insurance providers had received approval to increase their rates since the start of the year, with the average change per insurer standing at 6.5%. Still, more approvals are expected.
“Insurance companies are still catching up," says Daniel Ivans, RATESDOTCA insurance expert. "Just because they were allowed to increase doesn't mean it's enough to take care of their losses from the last few years. There's some fine-tuning to come.”
Insurance rates in Brampton are historically the highest in the province. Not only is the number of claims per capita elevated, but the most commonly filed claim also tends to be the most expensive kind.
“If I was to pull someone’s history in Brampton, I’m far more likely to see injury claims,” says Ivans. “[Insurers are] not worried about the car repairs. They're worried about accident claims.”
An accident settlement is the most expensive type of claim an insurance company can pay. Standard accident benefits in Ontario include medical bills for treatments not covered by OHIP, lost wages, personal support workers, and more. The total payout for an individual can amount to tens of thousands of dollars.
A common observation among experts contacted by RATESDOTCA is that GTA drivers appear to be more likely to draw on their accident benefits and file civil suits.
There’s no pat answer for why it happens, though numerous possible explanations exist. One hypothesis goes that urban dwellers are subjected to more advertising from accident lawyers. Drivers in rural settings are also more likely to personally know the person they collided with. Ivans believes differences like these contribute to urban drivers being “more detached” from their neighbours and surroundings.
“In the big city, expenses are high, and money is the utmost,” says Ivans. “When people find themselves in an incident, they’re thinking, ‘How do I get money out of this?’”
Meanwhile, Vaughan falling from first place to fifth this year doesn't surprise Ivans.
“My observations as a broker for 15 years are that Toronto and Brampton have always been the most expensive cities for auto insurance in Ontario. The GTA tops the list. Sometimes outliers find their way to the top, Vaughan being an example of this in 2021,” says Ivans.
The Golden Horseshoe is home to Ontario's highest auto insurance rates, and each city within it faces roughly the same issues. Indeed, the order of the Insuramap rankings changed in 2023, but the composition of the top 10 is mostly the same year after year.
A few of the main challenges facing drivers in the Golden Horseshoe are congestion, longer daily commutes, and higher average vehicle prices. The region also has a concentration of new drivers since most newcomers first settle in this part of Southern Ontario — a demographic that often faces higher rates due to a lack of insurance history in Canada. All these factors combined mean that insurance companies expect a lot of claims activity from the clientele in the region and, in turn, hedge their financial position by raising premiums across the board.
According to the Insuramap survey, 168 of the 187 cities surveyed have premiums below the provincial average. Eighteen of the remaining 19 cities are located in the core Golden Horseshoe region.
Not all places are being clobbered by rate hikes. Increases in communities outside of the GTA, like Ottawa, have been mild to date.
Auto insurance in Ottawa — which, for the purposes of our survey, includes its suburbs — increased year-over-year by 5%, from $1,257 to $1,321 annually. (Ottawa proper increased by 14%, from $1,257 to $1,437: still well below the provincial average.)
Of the individual insurance policies she has handled, Ottawa-based insurance broker Claudia Fortin of KBD Insurance says some premiums in the GTA are "more than double" what drivers pay in the nation’s capital.
There are a few reasons for this. Insurance companies base premiums on how likely someone is to file a claim based on three broad risk factors:
The latter means that even drivers with a perfect record are surcharged simply because of which city they call home. Insurers get even more granular with their risk assessment, basing rates on forward sortation area (FSA), the first three characters of a postal code.
"[Ottawa] is less populated. There’s one major highway, the 417, and that’s it. Past that, it’s barely a highway. You have a lot less action going on in a pretty vast area,” says Fortin. Meanwhile, street-level activity looks markedly different elsewhere in southern Ontario. “You have small cities in the GTA where it's all super tight.”
Fortin’s prediction for auto insurance rates in 2023 includes further rate hikes for Ottawans, but none as drastic as the ones coming for drivers in regions like Toronto.
Insurance prices in Ottawa will likely continue being insulated from the worst effects of a hard market for a while yet. “If one day Ottawa gets a super, super amount of claims, we might see it, but I doubt it,” says Fortin.
However, communities where SUVs and pickup trucks are the dominant car type face significant increases.
Monique Marcotte, an account executive for McDougall Insurance in Sudbury, says insurance rates for people who drive these vehicles are way up due to car theft.
Marcotte’s brokerage is putting in two or three comprehensive claims per week for drivers who have had their vehicles stolen. “Before, we might get two or three a year,” she says.
“I'm seeing larger rates for the Dodge Ram, and for a Lexus SUV, the premium is skyrocketing. You can’t even get around it with those types of vehicles,” says Marcotte. “We’re not seeing anything as crazy with a sedan.”
The premium estimate for Sudbury is based on a person driving a sedan and amounts to $1,321 per year, which is $63 higher than 2021 Insuramap estimates. But for customers with off-road vehicles, increases of $150 to $200 are more typical this year, says Marcotte.
Faced with these unwelcome trends, more drivers are warming to the idea of installing a GPS device on their car to track its location if it’s stolen, she says, adding that she herself is a convert. “When I go down south, I throw my AirTag under my seat.”
Telematics and usage-based insurance (UBI) also offer flexibility and savings on driver insurance rates. Both terms refer to technology that allows an insurance company to track a person’s driving habits in exchange for discounts. Telematics has been available in Ontario from select providers for a while, but uptake has been slow. Marcotte says insurance companies are campaigning to win people over, sending out letters to Sudbury clientele about the potential benefits of telematics, including discounts for good driving behaviour and GPS monitoring. She notes that attitudes towards the technology have changed in the face of unprecedented vehicle thefts.
“It’s not 100%, of course, but for the most part, people are buying into it,” she says.
Drivers have options to lower their auto insurance premium — though some are more advisable than others. Next year, the province will offer the option for drivers to remove a standard coverage that pays to repair or replace their vehicle when they’re not at-fault for a collision with another car, also known as direct compensation property damage (DCPD).
While removing DCPD will indeed lower a driver’s insurance premium, Ivans says drivers who feel they need the monthly savings also stand to suffer the most if they get into an accident. “If saving $150 a year is so material to you, then not having that coverage will be devastating.”
Instead, drivers can try many other tactics to lower their rates. The following especially make a large impact, according to Ivans:
Finally, compare car insurance quotes. It's one of the most efficient and immediate ways to save hundreds of dollars.
Keep an eye on your insurance costs by comparing your premium to the average estimate for your postal code. If you notice your rate deviates significantly from the average estimate shown, it may be time to compare rates from several different providers, especially if your policy is up for renewal soon. In fact, the Financial Services Regulatory Authority of Ontario and the Financial Consumer Agency of Canada recommend shopping around for car insurance before locking into a policy.
Here’s how we found the estimated prices for Ontario cities.
The RATESDOTCA Auto Insuramap is an interactive online map that lets users search by postal code for the estimated auto insurance rate in a city or neighbourhood.
All estimated premiums are based on a 35-year-old male who drives a 2019 Honda Civic four-door with a claim and conviction-free driving record (gender becomes less of a concern for insurance providers after about age 30). Our persona also purchased two optional insurance coverages, collision and comprehensive insurance with a $1,000 deductible.
One other thing to keep in mind is that the premiums displayed are based on RATESDOTCA’s data. While broad, our roster of insurance companies in our digital marketplace dictates the prices offered.