The average monthly car insurance rates in Ontario are between $125 to $158, depending on which part of the province you live in. This is the highest average car insurance rate among all provinces in Canada. However, monthly averages can be a deceptive number because rates can vary significantly from city to city, and from driver to driver.
To complicate the situation even further, there are a variety of factors used to determine a driver’s individual automobile policy. Policies are based on individual characteristics of the driver, vehicle, reason for driving, personal data and more. Insurance providers may use standardized formulas for determining a driver’s premium rates, but they can also use methods that are internal to the specific company. All of these items affect the average monthly cost of your auto insurance.
How high are car insurance rates in Ontario?
The average monthly car insurance rate in Ontario will change will obviously change every year. Insurance companies can submit rate changes for approval once per quarter (or every three months), which means the average prices will also change. In Ontario, it has become very rare in recent years to have a quarter when rates decrease at all. These frequent changes in rates over time can make it difficult to declare a single fixed monthly average car insurance rate for any province.
To simplify this situation, consider the highest, lowest and middle rate amounts for recent periods. This gives a good range for consumers who really want to know what to expect from average monthly prices for car insurance in Ontario. Low estimates put the average rate at around $1,500 per year, and the high estimate is around $1,900 per year. These estimates can be used as a general range to get a more accurate monthly average.
On the high end of this spectrum, the average car insurance Ontario policy costs around $1,900 per year. This works out to around $158 per month.
The next thing to consider is how these rates are actually calculated so that drivers like yourself can figure out if there is any viable way to lower the monthly cost of your car insurance.
How are premiums calculated?
Basic information like location, driving experience, gender and age are always used to calculate car insurance rates in Ontario. According to a manager at the Insurance Bureau of Canada, this actuarial method derives risk from historical data and statistics. This provides a guideline that aims to charge more premium for more high-risk drivers.
In Ontario, we have a private car insurance system, which means drivers are free to shop around for car insurance rates from multiple companies. In some other provinces, like British Columbia, a public insurance system used and all drivers are insured by the governing body, ICBC.
There have been many debates over which system is truly better for drivers, and each does have it’s benefits and drawbacks.
When providing a quote, insurance companies request information from the driver that enables them to determine rates. This includes all of the driver’s personal information including address, date of birth, gender, vehicle make and model, and more. The driving record and the total number of years driving will also play a central role in determining the cost of any insurance policy. Insurers also look at the total number of kilometres expected per year as well as the reason for driving.
What other factors affect premium costs?
There are many factors that affect premium cost. As mentioned, the make and model of the vehicle will play a major role. Every vehicle has a unique rating based on safety, theft rate, cost to repair, and other claim history data. A vehicle rating can make a significant difference in your car insurance premium, so ask your insurance broker about the car you intend to purchase before closing the deal.
Some aspects of the driver’s risk level are unchangeable. Age, gender and location of residence play a major role in the cost, but there is nothing the driver can do to change these items. However, the most important rating criteria for determining your car insurance rate is within your control; your driving record.
Avoiding tickets, accidents, and other car insurance claims will help you build a stellar driving record, and over time, will allow you to find the cheapest car insurance rates available.
What makes car insurance more expensive?
Ontario drivers face high insurance rates mainly due to the province where they live and drive. The average cost per claim in Ontario is higher than any other province. In addition, an increase in claim fraud has also been impacting the average cost of an insurance claim. And when claim costs increase, so do average car insurance rates.
What makes car insurance cheaper in Ontario?
Although Ontario is the most expensive place to drive in Canada, you can still take steps that will reduce your car insurance costs. Keeping a spotless driving record over time is the best way to reduce rates. Make sure to research the type of car you plan to purchase, and ask your insurance broker what your premium would be for each vehicle.
- Consider increasing the deductibles on your car insurance policy: You can get a better rate if you are able to pay a higher deductible amount in the event of an incident.
- Put your policies with the same provider: Combining home and auto policies can also reduce the total amount by adding valuable multi-policy discounts. Make sure that every person added to the policy has a clean driving record.
- Select the amount of coverage that fits your budget: “Full coverage” will obviously cost more than “liability only”. Furthermore, policies with two million in liability will cost more than policies with one million in liability coverage.
- Finally, you should always ask for discounts from your insurance agent: There are discounts available for students, winter tires, monitoring devices, car alarms, multiple vehicles, retired drivers and more. Make every premium payment on time, and maintain continuous coverage.
Reduce your average monthly car insurance rate on your Ontario auto insurance policy by applying these ideas into action today.
Why do car insurance rates change annually?
Even if your circumstances remain the same (i.e. you drive the same car and live in the same city), car insurance rates can still change annually. In fact, in most cases, the price of car insurance is not likely to stay the same. Insurance companies are constantly underwriting behind the scenes, which means even drivers with stellar driving records could see an annual change in their rates. That is why it’s so important to shop around for car insurance anytime your policy is up for renewal.
Is car insurance more expensive for women or men?
Gender is one factor of many that insurance companies use to calculate premiums. More specifically, insurance providers use historical data to identify patterns and predict the likelihood of future insurance claims. This means that the driving records of men and women in your area might influence your car insurance costs.
Historical data reveals that men are more at risk of getting into accidents and engaging in reckless driving behaviour than women. This means that male drivers tend to pay more for car insurance than female drivers. To learn more about which factors influence car insurance premiums, contact BrokerLink.
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What is the cost of car insurance for young drivers in Ontario?
Car insurance rates for drivers under 25 tend to be higher than that of older drivers. This is because young drivers have less experience on the road, which insurance companies believe makes them more likely to get into accidents. That said, as young Ontario drivers progress through the licensing system (e.g. as they graduate from a G2 licence to a G licence), their insurance rates are likely to gradually decrease. Generally speaking, young drivers should expect the cost of car insurance to be above average, at least until they reach the age of 25.
Five tips for keeping monthly car insurance rates low in Ontario
Are you looking to save money on monthly car insurance in Ontario? BrokerLink can help. Our expert insurance advisors have put together a list of tips and tricks for keeping monthly car insurance rates low. From choosing a car known for affordable insurance to maintaining a stellar driving record, check out this list of money-saving tips:
1. Choose a car known for affordable car insurance
The make, model, and year of the vehicle you drive are three major factors impacting car insurance rates. Therefore, if you want to keep monthly car insurance rates low, choose a car known for having affordable car insurance. Cars with low insurance rates are typically safe, reliable, and budget-friendly vehicles. In contrast, ultra-luxury vehicles from automakers like Bentley or Lexus and sports cars (especially those with a high horsepower) tend to cost more money to insure.
In addition, choosing a used car or an older model over a brand new model can also save you money, as they will likely be less valuable, which often translates to lower car insurance rates. Further, many provinces in Canada, including Ontario, offer discounts to drivers who purchase eco-friendly vehicles, like hybrid or electric vehicles. Therefore, purchasing an EV might be one way to reduce how much you pay for car insurance.
Plus, nowadays, EVs aren’t exclusively luxury cars. Instead, you can find EVs from affordable automakers like Hyundai, Volkswagen, Nissan, and Mazda. Finally, when buying a car, research the models with high theft rates and avoid these. The likelihood of your car being stolen is another factor that insurance companies will consider. If you purchase a car model known to be targeted by thieves, your insurance may be more expensive. (Note that the vehicles with the highest theft rates in Canada are the Honda Civic, Honda CR-V, Toyota Highlander, Chevrolet Silverado, Ford F-150, F-250, F-350, and F-450, Toyota Corolla, and Honda Accord.)
2. Maintain a stellar driving record
BrokerLink’s second tip for keeping monthly insurance costs low is to maintain a stellar driving record. Your driving record is a key factor insurance companies use to calculate premiums. A clean driving record is one free from accidents, tickets, demerit points, DUIs, and other infractions. Such a record indicates to the insurer that you are a safe and responsible driver who obeys the rules of the road. They are likely to reward you for your positive record with a lower rate.
3. Enrol in driving school
Enrolling in an approved driving course is another tip to reduce how much you spend on monthly car insurance in Ontario. Whether you’re a new driver or recently got into a collision, showing that you attended and graduated from a recognized driving school can make you eligible for an insurance discount.
4. Install winter tires on your vehicle
Another way to keep monthly insurance rates low is to install winter tires on your car. Winter tires are not mandatory in Ontario, but insurance companies recognize that outfitting a vehicle with them makes driving in winter conditions far safer and might even reduce your odds of getting into an accident. Therefore, if you install snow tires on your car, you could be eligible for a discount of up to 5% on your car insurance policy.
5. Choose annual over monthly payments
One last way to minimize your monthly car insurance costs in Ontario is to pay for your policy annually rather than monthly. If it’s feasible, we strongly recommend paying your car insurance bill upfront rather than in monthly instalments. Why? Many insurance companies charge hefty administrative fees for monthly payments, which means paying for car insurance monthly usually ends up being more expensive than paying annually.
One simple way to save money on car insurance is by paying for your policy annually rather than monthly. Paying monthly may cost more in the long run, as insurance companies add administrative fees for each payment.
