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What Factors Affect Your Auto Insurance Rate?

May 3, 2019
3 mins
Young parents and their toddler son get ready to load into the car

While you might think your insurance is the same regardless of where you live or what you drive, that’s not true. A lot of factors go into determining insurance. Rate calculations are based on vehicle type, gas mileage (distance to/from work) and safety features. All of these are considered risk potentials that can affect the insurance rate and the quotes you receive. Knowledgeable drivers can help to reduce insurance premiums.

Here are the factors that determine insurance premiums.

Where You Live

  • People who live in urban environments like cities pay more in insurance. Why? There’s more crime than in a rural area.
  • People that live near major intersections and roads may pay more because of the risk of higher accidents in these areas.

Vehicle Age, Year, Make and Model

  • It costs more to drive an expensive car due to the risk of theft. The same can be said for cars with fewer safety features or popular cars thieves usually steal.
  • People who drive cars with the most safety ratings and safety features will have lower insurance premiums.
  • The vehicle colour isn’t a factor.

Cheapest Vehicles to Insure

  • Trucks: Dodge Ram, Chevrolet Silverado, Ford F-150 and GMC Sierra 1500
  • SUVs: Ford Escape and Honda CRV
  • Cars: Hyundai Elantra, Toyota Corolla and Honda Civic

Whether You’re a Man or Woman

  • Insurance for men is higher in Canada. They are statistically in twice as many fatal accidents than female drivers.
  • Men under age twenty-five will pay more for insurance due to increased collision risks.
  • Other determining factors include accident totals a driver has and time driving to/from work or long-distance driving. Men whose spouses have clean driving rates might have lower premiums.

Driving History

  • At-fault crashes and speeding tickets can increase your insurance rates.
  • If a court convicts you of a driving-related crime, it can raise your rates.
  • Convictions will stay on your record for three years and can impact your insurance rates.

Factors That Can’t Be Used

  • Items that can’t be used to determine insurance include living arrangements, salary, bankruptcy and work history.
  • Credit scores can’t be used in areas like Newfoundland, Labrador or Ontario. Alberta residents have to give insurers permission to run credit reports. But, Nova Scotia residents may/may not include credit scores when determining insurance rates.

To Reduce Insurance Rates

  • Carpool, take public transportation or reduce your commute. Biking or walking to work can reduce insurance premiums as it reduces the kilometres in your commute.
  • Compare insurance plans and ask for discounts. Increasing the deductible and bundling insurance plans can also lower costs.
  • Other ways to lower costs include paying for coverage annually, taking a driving course and keeping a good driving record.

Ready to Find the Best Auto Insurance Rates?

While some factors in determining insurance can’t be changed, there are a few that can. A clean driving record, a safe vehicle and a closer work commute can lower insurance premiums in Canada. Because insurance varies between provinces, compare coverage plans. Liability coverage is mandatory but some coverage is optional. For help with auto insurance, contact

With, drivers can compare auto insurance rates from over 30 of the best insurance providers in Canada. Compare quotes today!


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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