Why Is Car Insurance So Expensive In Ontario – If you want to drive in Ontario, you have to pay for car insurance – it’s non-negotiable. But depending on where you live in the province, the cost of your car insurance premium can vary greatly.
Car insurance companies determine an individual’s premium based on a variety of factors, including age, driving and insurance history, vehicle make and model, and geographic area. Insurers use zip codes to estimate risk in certain areas, and typically residents in city centers pay higher rates than those in rural or remote areas. Because their population is larger, urban centers tend to have higher claims- and risk-related insurance companies.
Why Is Car Insurance So Expensive In Ontario
To better understand how much car insurance costs in different Ontario cities, we pulled data from September 2020 car insurance quotes and compared the 15 most expensive cities to other provinces. Here are the highest car insurance rates by city in Ontario.
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While it’s difficult to find out how much car insurance costs per month in these Ontario cities, we’ve determined how expensive each city is compared to the provincial average. See below for Ontario car insurance rates by city:
No wonder Brampton comes out as the most expensive city in Ontario when it comes to car insurance. According to our data, Brampton car insurance rates are 123.5% higher than the Ontario average. Kota Kembang has made headlines in recent years for its high insurance premiums, drawing attention from lawmakers on both sides of the political aisle. Brampton has been hit hard by insurance companies for car insurance fraud, which occurs when criminals fake collisions and exaggerate damages and injuries in order to collect large payouts from insurance companies. When insurance companies pay more claims than they collect in premiums, they raise rates to cover losses.
It is also important to note that Brampton, along with many other cities on this list, are suburbs surrounding the city of Toronto and a large part of what is known as the GTAA. This sheds some light on why car insurance is generally so expensive in Ontario. Suburbs, by their very nature, are cheaper to live in than surrounding cities, making them attractive to low-income earners and new Canadians. This can also affect the cost. People living in more affluent neighborhoods can pay out of pocket to fix a minor fender bender, for example, but people on lower incomes can’t. As a result, they may be more motivated to make a claim through insurance, even if it is for a small amount. The more “disruption” claims – as they call it – in a certain area, the higher the premium will generally be.
The type of car insurance policy that is common in the suburbs should also be considered. To get around, suburban drivers have to drive on major highways and more congested roads, which insurance companies consider more dangerous than driving on city roads with lower speed limits. Additionally, cities like Toronto, where drivers may not use their vehicles to commute to and from work every day, may have more “affordable” car insurance policies, but for leisure activities, such as grocery shopping. Take a weekend trip out of town – and rely on public transport to get around most of the time. So, although many car owners in Toronto, if they drive fewer kilometers per year, the rates are likely to be lower than those who live in the suburbs, where you need a vehicle to get anywhere.
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As far as we know, many of the cities on this list have a significant percentage of drivers with less than three years of driving experience. For example, 32.8% of completed estimates for Brampton came from drivers with less than three years of driving experience, followed by 30.3% for Windsor and 29.2% for Barrie. This can be seen as a “new driver” in the eyes of the insurance company.
A higher percentage of new drivers in a given area also contributes to higher driving insurance premiums because new drivers are considered more risky to obtain insurance. Driving experience and insurance history are two factors that insurance companies use to calculate car insurance rates. The longer you drive and the longer you are enrolled in an insurance policy in good condition, the lower your rates will generally be.
Unfortunately for new Canadians, their country of origin driving history does not count when they arrive in Canada. If so, they will have to start from scratch by getting a Canadian driver’s license and buying car insurance once they arrive. This is the first time the insurance company in Canada has been registered in the insurance policy, which will also increase their premiums. The same goes for international students looking for student car insurance. Many international students choose to live in suburbs outside of Toronto, such as Scarborough and Mississauga, for the lower cost of living. The high density of new drivers in these areas may also explain why fares are more expensive.
For drivers who live in the cities on this list, there are still opportunities to lower car insurance premiums and find savings. Apart from geographic location and driving experience, there are many other factors that affect how much we pay for car insurance.
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Zandile is a freelance personal finance journalist. He previously worked as a personal finance writer and before that as a content editor for Real Estate Management Industry News. As a self-proclaimed budget warrior, Zandile devotes her time to supporting financial well-being.
Lisa is a senior editor at Personal Finance. Her work has appeared in Reader’s Digest, Toronto Life, Canadian Living and TVO. As a child, he was excited to hold a $50 bill from his Christmas card. AdultLisa is working hard to revive the stocking trend.
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To be precise, the province of Ontario has the second highest car insurance rates in Canada (based on the provincial average in 2021).
Today’s article will answer these questions and more. So, if you want to know why car insurance is so expensive in Ontario, be sure to read on.
The average cost of car insurance in Ontario is about $1,920 per year (or about $160 per month). As of this writing, the city of Vaughan has the highest insurance rates in Ontario, at about $2,179 per year (or about $181.50 per month).
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Compared to the Canadian average of $1,320 per year (or $110 per month), Ontario car insurance rates are significantly higher.
*Prices above are based on a driver aged 25 with a clean record, driving 10,000 km per year and a car between three and ten years old.*
There are many reasons why car insurance is so expensive in Ontario, some of which include:
In winter, drivers have to deal with poor visibility (from snow), slippery roads and other winter driving hazards.
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In addition, Ontario experienced many severe snow storms, which caused extensive damage. For example, in 2018, an unexpected blizzard caused about $190 million in damage in Ontario.
That said, winter isn’t the only season that threatens Ontario. During the summer months, Ontarians face many weather-related hazards, such as hurricanes. For example, in 2021, a tornado in Barrie, Ontario caused up to $100 million in physical damage to private property.
You may be asking yourself, “What does the weather have to do with car insurance in Ontario?”.
Simply put, the increasing rate of natural disasters and severe weather increases the number of road losses, such as collisions, and road losses, such as losses from falling objects. In order to increase the number of losses, car insurance companies must charge policyholders more for coverage.
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Auto insurance fraud is a growing problem in Ontario. For the uninitiated, insurance fraud is the act of providing false information to an insurance company for financial gain.
If someone commits insurance fraud, their actions not only affect the car insurance company – insurance fraud affects everyday policyholders like you!
When a fraudster successfully commits insurance fraud, he draws funds from the collective “pool”. This “pool” of funds is money contributed by policyholders and used to compensate drivers after filing a claim. However, if fraudsters charge more
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