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Alexandra Bosanac

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Alexandra Bosanac About Alexandra Bosanac

Alexandra Bosanac, content manager at InsuranceHotline.com, focuses on auto insurance. She has covered the topic since 2017. Alexandra holds a bachelor’s degree in journalism from Toronto Metropolitan University. Prior to joining InsuranceHotline.com in 2021, she contributed to publications such as Canadian Business, the Toronto Star, the National Post, and the CBC.

 

Content Manager

Updated On

May 9, 2024

How does Toronto auto insurance work?

Vehicle owners in Toronto must adhere to auto insurance rules set by the province of Ontario. It is illegal to drive without a valid car insurance policy, which must include third-party liability, statutory accident benefits, and uninsured automobile insurance. If desired, Toronto drivers can buy optional car insurance products over and above standard coverage.

Toronto insurance operates under a 'no-fault' system. After a collision, each driver deals with their respective insurance company, regardless of who is at fault in the accident.

It is important to note that Toronto auto insurance operates under a private insurance model. Toronto car owners must buy insurance from private companies. You can purchase insurance from brokers, agents or providers directly (also known as direct writers). Competition is good for Toronto drivers, as it helps to keep premiums down.

 

Changes to Ontario's auto insurance in 2024

Ontario is currently in the process of reforming how auto insurance works in the province. The goal of this is to reduce the amount of coverage drivers are forced to take out, and in turn, lower their premiums.

Some of the proposed changes include:

  • Option to remove the caregiver benefit, housekeeping and home maintenance expenses benefit, income replacement benefit, and death and funeral benefits (benefits for medical, rehabilitation, and attendant care will remain mandatory, however).
  • Making auto insurance companies the first payer for medical and rehabilitation benefits (at the moment, a person's private medical insurance is the first payer). This change is meant to streamline the claims process and lead to earlier resolution.
  • Option to remove direct compensation for property damage (DCPD) coverage (in effect since January 2024).

Toronto mandatory and optional auto insurance coverages

Insurance typeMandatory coverageOptional/ Additional Coverage
Third-Party Liability$200,000 minimum. Provides coverage in the event of a lawsuit resulting from an accident where you are at fault.Coverage can be increased to $500,000, $1 million, or $2 million, with up to $2 million limit.
Uninsured Automobile InsuranceProvides up to $200,000 in coverage if you are injured or killed by an uninsured driver, or if your vehicle is damaged as a result of a hit-and-run by an unidentified, uninsured motorist.Family Protection Coverage is an optional coverage that includes additional coverage of up to $1 million in the case of a hit-and-run by an uninsured motorist.
Statutory Accident BenefitsProvides coverage if you are injured in an accident, regardless of who is at fault. Covers medical expenses that aren’t covered by OHIP.Coverage limits can be increased.
Direct Compensation-Property Damage (DC-PD)OptionalDCPD is included in all standard insurance policies, but Ontario drivers can apply to remove it. DCPD pays to repair or replace your car if you're in a collision where the other driver is at fault. You lose this coverage by removing DCPD, as well as your ability to sue the other driver for repairs. 
Collision Coverage (Also Upset Coverage)OptionalCovers the costs of repairing or replacing your vehicle following a collision with another vehicle, an object, or property.
Comprehensive coverageOptionalCovers damages caused by named perils identified under the Specified Perils coverage, as well as losses from other perils like falling or flying objects, theft, fire, hail, windstorms, missiles, and vandalism.
Specified Perils CoverageOptionalCovers damages caused by named perils such as theft, attempted theft, explosions, natural disasters like fire, lightning, windstorm, hail, rising water, earthquakes, and other perils specified in your policy. Specified perils do not cover damages due to vandalism, breakage of glass, etc.
All-Perils CoverageOptionalCombines collision/upset and comprehensive coverage. Also, provides additional protection if a household member or an employee steals your vehicle.
OPCF 20: Coverage for Transportation ReplacementOptionalCovers the cost of your transportation replacement and rental car insurance if you were to get into a car accident or if your vehicle is stolen.
OPCF 27: Liability for Damage to Non-Owned Automobile(s)OptionalCovers if you damage a borrowed or rental vehicle. The coverage limit is usually around $25,000 to $50,000.
OPCF 39: Accident Waiver/ForgivenessOptionalProtect your premium from rising when you have your first at-fault accident.
OPCF 16: Suspension of coverageOptionalThis allows you to suspend your insurance coverage for 30 days or more during periods when you aren't using the car.
OPCF 43: Waiver of depreciationOptionalEnsures your insurance company won't factor in depreciation when settling a claim; you will receive the amount you initially paid for the car.
OPCF 44R: Family protection coverageOptionalEnsures your costs are covered if you and your family are involved in an accident with a driver with less liability insurance than you. This endorsement will cover the remainder.
OPCF 13C: Limited glassOptionalFor a lower premium, you can limit or exclude any coverage for glass damage that might've been in your policy.
OPCF 40: Fire and theft deductibleOptionalAdds a deductible (an amount you must pay before your insurance company chips in funds) for a theft or fire damage claim.

The cheapest car insurance quotes unlocked by real Toronto drivers

Examples of real savings found through InsuranceHotline.com by drivers living in Toronto, Ontario

Savings: $197

Driver:Female, age 39, Toronto, ON

Driving: 2014 Chevrolet Cruze 4DR

Current Rate: $1,969

Cheapest Rate: $1,772

Savings: $265

Driver:Male, age 49, Toronto, ON

Driving: 2016 BMW 550

Current Rate: $2,912

Cheapest Rate: $2,647

Savings: $419

Driver:Male, age 21, Toronto, ON

Driving: 2012 GTI Hatchback 2DR

Current Rate: $2,946

Cheapest Rate: $2,527

Savings: $538

Driver:Female, age 62, Toronto, ON

Driving: 2011 Nissan Sentra SE-R 4DR

Current Rate: $2,292

Cheapest Rate: $1,754

Savings: $202

Driver:Male, age 34, Toronto, ON

Driving: 2017 Honda Civic 4DR

Current Rate: $2,983

Cheapest Rate: $2,781

Savings: $496

Driver:Female, age 31, Toronto, ON

Driving: 2016 Kia Optima EX 4DR

Current Rate: $2,304

Cheapest Rate: $1,808

How much does Toronto car insurance cost?

According to the 2023 RATESDOTCA Insuramap data, the average premium paid by an Ontario driver is $1,744 per year or $145 per month. This is significantly lower than what a driver would pay in Toronto, where the average premium sits at $2,235 per year, or about $186 per month.

Auto insurance premiums depend on several factors, including your age, gender, car, driving record and your address in Toronto. Given that Toronto has more car accidents and car thefts than most of Ontario, there are more people filing claims here, which is likely what’s keeping those premiums high.

Premium changes on the individual level can also be a result of changes in your specific circumstances, such as moving to a new location, purchasing a new vehicle or being issued a speeding ticket.

Where in Toronto has the cheapest car insurance?

Toronto's average auto insurance rate is the second highest in Ontario, sitting at $2,235 per year, according to the RATESDOTCA Insuramap data. If you've been hunting for the cheapest car insurance rate, you might have noticed already that rates vary from one neighbourhood to another. That’s not your imagination. Insurers do, in fact, sort their premiums based on postal codes, or more specifically, the first three characters of a postal code – also known as the forward sortation area (FSA) – which denote a particular district.

In 2023, neighbourhoods with the following FSAs have the cheapest average car insurance premium in Toronto:

 

  • Eglinton-Lawrence (M5N)
  • Toronto-St. Paul’s (M6C)
    • Average annual premium in 2023: $1,389

Both neighbourhoods are located slightly to the north of the downtown core and have a good number of quiet residential neighbourhoods, with relatively little traffic and low crime rates. This means that fewer people file insurance claims here, whether it’s due to a car accident, theft or vandalism. The other reason for the lower rates is that more people avoid driving here altogether, opting for walking, biking, TTC and taxis instead.

A Toronto neighbourhood that boasts the second-lowest premiums is located in the Davenport area. In fact, its annual car insurance rates are only marginally higher than those in found in Eglinton-Lawrence or Toronto-St. Paul’s.

 

  • Davenport (M6N)
    • Average annual premium in 2023: $1,466

The third-lowest premiums are also to the north of the downtown core, skewing slightly to the east. These areas have significantly higher premiums than the ones listed above, being much more reflective of the average for the whole city.

 

  • Toronto-Danforth (M4K)
  • Don Valley West (M4P)
  • Eglinton-Lawrence (M4R, M5M)
  • Toronto-St. Paul’s (M4S, M4V, M5P)
  • University-Rosedale (M4T, M4W)
    • Average annual premium in 2023: $2,210

 

Compare Toronto car insurance premium against other Ontario regions

Ontario automobile owners pay the most expensive premiums compared with other provinces in Canada. The town or city you live in significantly impacts your insurance rates. Smaller, rural municipalities are considered low risk as opposed to urban centres.

Despite this, Toronto, an attractive destination for many newcomers, does not have the highest average auto insurance premium in Ontario. As of 2023, it’s the second most expensive city for auto insurance in Ontario, right behind Brampton, according to the RATESDOTCA Insuramap data. The rest of the GTA is not too far behind, with Mississauga, Richmond Hill and Vaughan occupying third, fourth and fifth spots, boasting the rates of $2,311, $2,188 and $2,158, respectively.

GTA drivers paid 72% more than rural drivers in Ontario, according to the province’s car insurance regulator, the Financial Services Regulatory Authority (FSRA). As of October 2022, rural drivers paid $1,306 per year for car insurance, while GTA residents paid $2,245.

If you look at auto insurance prices overall, you’ll notice that from December 2020 to June 2022, they’ve been steadily declining – only to start seeing an upswing at the end of 2022. That’s because the COVID-19 pandemic, which lasted from 2020 to early 2022, has led to fewer people driving, and thus, fewer accidents and claims filed. In 2023, car insurance prices have continued to increase – not only because more people were driving again but because of the rising inflation rates.

As for your best defence against increasing car insurance prices? Regularly shopping around and comparing rates will ensure you're still getting the best deal on your auto insurance. However, your city isn't the only thing that impacts your rate (even if it is a major contributor). Your personal driving and insurance histories and the car you choose contribute to the premiums you're offered and are all things you can control.

RegionAs of Oct 2022As of Jun 2022As of Mar 2021As of Dec 2020As of Jun 2020
Ontario$1,674$1,659$1,651$1,665$1,664
GTA$2,245$2,214$2,223$2,246$2,252
Other Urban$1,590$1,564$1,564$1,573$1,566
Rural$1,306$1,282$1,289$1,295$1,286

 

Source: Financial Services Regulatory Authority of Ontario (FSRA)

Factors that determine your Toronto car insurance rate

Auto insurance companies consider many factors when calculating your premium rate, and no two drivers would have the same rate being offered. Here are some of the main factors that insurance companies consider when calculating car insurance rates in Toronto:

 

  • Neighbourhood: Your postal code greatly influences your car insurance rates. If drivers in your neighbourhood are more likely to file claims, your rates will be higher. Claims activity is linked to driving behaviour, congestion in the area, and crime rates.
  • Type of vehicle: A luxury car would cost more to repair or replace after an accident compared to a regular economy vehicle or SUV. Hence, the premium would be higher.
  • Daily commute: The more time you spend on the road, the more likely you will get into an accident, resulting in a claim.
  • Driving history and pattern: Your driving history impacts your car insurance premiums. Serious traffic convictions or at-fault accidents stay on your insurance record for at least six years, during which time you'll pay more for auto insurance coverage.
  • Existing coverage: Toronto has mandatory and optional auto insurance coverage. If you choose to add optional coverage, your insurance premium is sure to rise.
  • Discount eligibility: Your age, occupation, and alma mater are all potential sources of discounts. It is best to check with your insurance provider about discounts you're eligible for to ensure you get the best rate.
  • Add-on drivers: If you have an add-on or secondary driver on your insurance, you'll pay more. The secondary driver's age and driving experience would also be considered.
  • Bundle auto and home insurance: Your insurance provider might also ask you to bundle your insurance policies, such as home and auto, as an easy way to reduce your premium from 5-15%.

How to get the cheapest car insurance in Toronto

Saving on car insurance is easier than you think. These 10 tips help ensure youre getting the cheapest Toronto car insurance rate:

Shop around

InsuranceHotline.com shoppers in Toronto saved an average of $1,286* on their car insurance premiums by comparing car insurance quotes from over 50 insurance companies in Canada.

Increase deductibles

If it fits your budget, increase your deductibles from $500 to $1,000 to save on your Toronto car insurance.

Lump sum payment

A single annual payment can help the insurance company reduce the administrative fees associated with charging and processing monthly payments.

Bundle all policies

You can save anywhere from 5 to 15% off each policy when you bundle your home and car insurance under the same insurance provider, which means you're getting the cheapest Toronto car insurance and the cheapest Toronto home insurance too. Simply select the bundling option when completing your home or auto quote to unlock these savings.

Insure all vehicles

Change tires seasonally

Let your insurer know if you have winter tires. A winter tire discount could save you about 5%.

Compare annually

Renewal time is the best time to save as you won’t have to pay a penalty for terminating your policy early. Compare rates annually and get rid of coverages you no longer need.

Use a telematics device

Allow your insurer to monitor your driving habits and they will reward you with a reduced rate, sometimes as much as 25% off the standard price.

Ask about discounts

You’re a savvy city-dweller, but don’t be afraid to ask about discounts you might be eligible for, including alumni and claims-free savings.

Driver’s education

Are you a new driver, or is your child almost ready to take the wheel? Consider an accredited driver’s education course to save on Toronto car insurance.

Car insurance in Toronto: Things you should know

 

The rates car insurance companies charge in Toronto to insure the same car and driver can differ by hundreds and sometimes thousands of dollars, so it pays to shop around

 

Your key to savings is finding the car insurance company that offers you the cheapest available rate. Busy families don't have time to call the plethora of Toronto car insurance companies to get multiple quotes. This is why getting instant online Toronto car insurance quotes saves you time and money. Compare multiple quotes from over 50 trusted Canadian insurance companies in the same amount of time it takes to get just one quote.

 

Get a quote

*Shoppers in Toronto who obtained a quote on InsuranceHotline.com from January to December 2023 saved an average of $634 per year. The average savings represents the difference between the shoppers’ average lowest quoted premium and the average of the second and third-lowest quoted premiums generated by InsuranceHotline.com.

Frequently asked questions about Toronto car insurance

Here are some of the most common questions we get about car insurance in Toronto.

How can I find the cheapest car insurance quotes in Toronto?

The best way to find the cheapest car insurance is by shopping around and comparing quotes by insurance providers. Insurance Hotline allows you to compare quotes to see multiple quotes side by side and determine if you could get a cheaper rate.

Which companies offer the cheapest car insurance in Toronto?

Every insurance company analyses driver risk slightly differently. The company willing to offer the lowest premium is different for everyone, and the cheapest company for you will change as your driver profile changes. This is why it pays to shop around. Compare quotes on InsuranceHotline.com to see multiple quotes.

Why is Toronto car insurance so expensive?

Car insurance premium depends on the area you live in, driving patterns in that area, and claims frequency. The more likely you are to make a claim, the more an insurance company will charge for coverage. For Torontonians, the city is home to many factors that make claims more likely.

Toronto contains some of the busiest roads in Canada (Highway 401 is the busiest in North America), and your chances of a collision go up with more cars.

On top of this, Toronto is a large city and the chance of your car being stolen, or broken into, is higher than in less populated places.

Finally, insurance fraud is a real problem in the GTA, with some unscrupulous drivers participating in staged auto collisions or filing fraudulent claims to get unwarranted payouts.

If you are struggling with the cost of car insurance, read our 10 tips on getting the cheapest insurance in Toronto.

Why do Toronto car insurance rates change?

Toronto's insurance rates are decided by private insurers, who adjust their rates in response to the number and manner of claims they have been receiving. If there have been more collisions in your neighbourhood, you can expect your premiums to increase. In Ontario, rate changes are regulated by a body called the Financial Services Regulatory Body (FSRA).

Alexandra Bosanac, Content Manager

Alexandra Bosanac, content manager at InsuranceHotline.com, focuses on auto insurance. She has covered the topic since 2017. Alexandra holds a bachelor’s degree in journalism from Toronto Metropolitan University. Prior to joining InsuranceHotline.com in 2021, she contributed to publications such as Canadian Business, the Toronto Star, the National Post, and the CBC.

 

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