Toronto pays far more for auto insurance than other Ontario cities

Across six major cities in Ontario, auto insurance consistently makes up the majority of the average household's insurance cost burden, ranging from 60% to 70% of total premiums.  

Ottawa sits at the low end (about 60%), while Toronto is the highest (around 70%), with the remaining cities — including Hamilton at 65% — falling in the middle.

Between 2022 to 2025, every city saw sharp increases in auto insurance premiums. The surge was steepest in Ottawa (+40%) and Windsor (+38%), followed by Oshawa (37%), while Toronto rose 16%. 

Average auto premium per household (CAD) 

Learn more: How much does it cost to own a car in Canada?

Why are auto premiums so high in Ontario?  

1. Theft rates fall, but low recovery rates have insurers paying the cost

Theft counts have started to decline across Ontario, but payouts are high because vehicles are less often recovered and organized theft rings are using more sophisticated methods (chop‑shops, re‑VINs).  

Even with lower incident totals, insurers continue to price for that elevated risk.

In fact, high insurance rates associated with commonly stolen cars are reshaping buyer decisions, according to Dan Park, CEO at Clutch Canada.  

“We've had customers cancel purchases on CR-Vs and Civics specifically because their premiums spiked when they quoted a high-theft model,” he says. “One customer saw their premium nearly double and walked away entirely.”

2. Fancier cars = more expensive parts and labour

Modern cars are far costlier to fix, largely because they’re loaded with technology.  

“In the luxury and tech‑heavy segments, a sensor failure or cooling system issue on a nearly new vehicle can result in a repair quote of around $10,000,” Park says. When the vehicle itself is more expensive, every claim — from minor collisions to total losses — costs more.

EVs also have higher‑priced parts and require more specialized labour.  

“First-time used‑EV buyers frequently express concern about battery health, maintenance costs, and warranty coverage,” Park says.  

Meanwhile, new vehicle prices also remain well above pre‑pandemic levels, raising exposure values and replacement costs.  

3. Repair costs are more expensive than ever

Even for relatively basic cars, repair and parts costs have climbed sharply. Labour remains scarce, wages are up, and parts delays have continued since the initial supply‑chain shocks of the pandemic.  

Insurers describe collision severity as “structurally elevated,” says Daniel Ivans, Rates.ca insurance expert and licensed insurance broker. That’s because every stage of a repair — including diagnostics, parts, and labour — costs more than it did just a few years ago.  

“If insurance companies have to pay more money than anticipated… premiums will go up,” says Ivans. “As incomes inflate, the cost of living, goods, parts, and labor inflate.  Insurance premiums have to match the cost of losses.”

Supply‑chain delays further extend repair timelines. As a result, drivers have to rely on rental cars to get around, which adds to the overall claims cost. 

Why are home insurance premiums increasing?

Home‑insurance costs rose steadily from 2022 to 2025 across all six cities, with the sharpest increases in 2024 before easing off in 2025.  

Ontario’s home insurance inflation stems from climate‑driven losses and rebuild‑cost inflation. Even in cities without major catastrophes, the cost to repair or rebuild a home has increased so sharply that insurers are pricing for a permanently higher baseline.

Many of the problems plaguing the auto insurance industry also affect home insurance pricing, such as higher labour costs and more expensive materials, but here are other factors that uniquely raise the price of premiums for homeowners.  

1. Climate losses are rewriting the risk curve

Severe weather — from flooding to fires — is now the largest driver of property‑insurance inflation. Recent years brought more frequent and intense events, including over $1 billion in Southern Ontario flood losses. These catastrophes also increase reinsurance costs, which flow back into premiums even in areas without direct storm damage.

Read more: Why climate change will drive home insurance hikes in 2025: Be prepared

2. Rebuild costs have outpaced inflation

Replacement‑cost inflation has changed home‑insurance pricing. Residential construction expenses have risen ~66% since 2019, and national rebuilding costs are up about 24%, pushing every fire, flood, and structural claim higher. Even smaller losses cost more to settle.

“A claim is never as simple as rebuilding a basement,” says Ivans. “It’s the contents in the home… the additional living expenses… everything sewage touches is gone.”

3. Tariffs and material‑cost spikes are raising the price of every rebuild

The 2025 U.S.–Canada tariff cycle raised costs across core building materials:

• Electrical systems: +5–15%
• Metals / structural steel: +10–20%
• Engineered wood products: +8–15%
• Other U.S.‑sourced materials: up to +20%.

These align directly with the most common property‑damage categories — fire, flood, wind — making nearly every rebuild more expensive.

As a result, here’s what homeowners have paid in home insurance over the past four years.  

Average home insurance premium per household (CAD) 

Learn more: One home insurance claim could up your premium by 20%, says Rates.ca report