This article has been updated from a previous version.
The cost of living in Canada can vary significantly from one region to another. Food, gasoline, housing; these expenses and other necessities fluctuate depending on where you live. The same holds true for the cost of car insurance.
Across Canada, car insurance rates vary considerably. Ontario is the second-most expensive province for car insurance after Alberta, prompting many drivers to wonder — why is Ontario car insurance so expensive?
Of Canada’s 10 provinces, three feature government-owned and operated car insurance systems: B.C., Saskatchewan, and Manitoba. In Quebec, the government manages auto insurance for bodily injuries; otherwise, private insurance providers offer property damage insurance.
The other six provinces – Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Ontario, and Alberta – have private auto insurance systems, as do Canada’s three territories (Nunavut, Yukon, and the Northwest Territories).
For provinces like Ontario with private insurance systems, multiple for-profit insurance companies compete with each other and spur innovation, which can help to drive down the price of insurance. But the private-is-cheaper argument doesn't always hold up.
According to the Insurance Corporation of British Columbia (ICBC), the estimated annual auto premium for a 40-year-old female driving a 2017 Ford Escape SE with a clean record in nine provinces in 2022 (Quebec excluded) were:
But that was 2022. Now, the average Ontario car insurance premium is $1,744, according to RATESDOTCA’s data from May 2023. Furthermore, drivers in Toronto pay an average of $2,325 for a standard auto policy.
The COVID-19 pandemic, however, upended how often insurance rates rise in Ontario. The Financial Services Regulatory Authority (FSRA), Ontario’s car insurance regulator, decides whether an insurer can increase or decrease their rates. Throughout 2020 and into 2021, many insurers offered rebates, discounts, and other forms of relief to their customers to help them cope with the pandemic’s financial fallout rather than seeking rate increases.
Now, drivers province-wide are back on the road and insurance companies have faced financial strain brought on by inflation, part delays, long repair times, high theft rates, and more substantial claims, causing FSRA to approve rate increases,
Many variables determine what your auto premium is. Some of them include:
What you pay for auto insurance also depends on the type of policy you choose and whether you include optional coverages like collision and comprehensive insurance. Also, if you opt to boost the mandatory coverage limits, such as third-party liability, accident benefits, and uninsured auto protection, that too can raise the cost.
But other factors can influence the cost of insurance beyond any one driver’s control. These include:
Regardless of where you live in Ontario, finding the best possible price for the car insurance coverage you need comes down to a few clicks. Take advantage of RATESDOTCA’s free auto quoting tool to compare car insurance premiums from a broad range of insurers.