Cheap Toronto Car Insurance Quotes

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• How to get the cheapest Toronto car insurance quote
• How does Toronto auto insurance work?
• Toronto mandatory and optional auto insurance coverages
• Compare Toronto car insurance premium against other Ontario regions
• How much does the cheapest Toronto car insurance cost?
• Where in Toronto has the cheapest car insurance?
• Factors that determine your Toronto car insurance rate
• How to get the cheapest car insurance in Toronto
• Frequently asked questions about Toronto car insurance

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

Compare Toronto car insurance premium against other Ontario regions

Car insurance premiums in Toronto tend to be higher than in the surrounding areas, particularly rural and small urban areas. This is not surprising, as higher population density in large cities usually means more accidents and theft – which, in turn, means more claims, and consequently, higher premiums.

Out of the total quotes gathered by InsuranceHotline.com in the first quarter of 2024, 46% of those from Toronto had an annual premium between $2,000 and $5,000. By contrast, areas outside of Toronto (both urban and rural) had only 35% of quotes in this premium range. The difference is even more stark when we look at premiums below $2,000. In the first quarter of 2024, Toronto had 30% of quotes with a premium below $2,000, while the rest of the province had a whopping 54%. This indicates that, on average, drivers in Toronto pay more for their car insurance than anywhere else in Ontario.

Here’s the complete breakdown of the data:

This aligns with the data gathered by the Financial Services Regulatory Authority (FSRA), Ontario’s car insurance regulator. Here’s their breakdown:

Overall, car insurance premiums have been steadily rising in the past several years (since the end of the COVID-19 pandemic). According to the FSRA, GTA’s annual premium rose 8% in the span of two years – from $2,208 in October of 2021 to $2,391 in October of 2023.

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.

How much does the cheapest Toronto car insurance cost?

Though most premiums in Toronto range from $1,000 to $5,000 per year (as of the first quarter of 2024, according to our data), some individuals are able to score premiums below $1,000. The lowest annual premium scored in the first quarter of 2024 on InsuranceHotline.com was $351 – by a female driver who is 72 years old and drives a 2018 Toyota Yaris hatchback.

As shown in the table above, however, only about 4% of Torontonians enjoy annual premiums below $1,000, making this policyholder an outlier.

What was it then that allowed this person to score such a low premium? For starters, they used InsuranceHotline.com to compare car insurance rates. Having insurers compete for the lowest price leads to cheap quotes. Give it a try yourself, if you don’t believe us.

Secondly, this person belongs to an age group that is statistically less likely to get into an accident and file a claim. They also drive a vehicle with a low-to-medium CLEAR (Canadian Loss Experience Automobile Rating) ratings across all categories. The lower the CLEAR rating, the less likely a vehicle is to have a claim filed for it. CLEAR doesn’t just account for accidents – it accounts for everything, including theft. So, if your vehicle is more likely to get stolen (for instance, if you own the 2020 Honda CR-V, which is the most stolen car in Ontario as of 2024), then its CLEAR rating will be higher, resulting in more expensive premiums for the driver.

Other factors that probably have contributed to this policyholder’s lower premium include location, coverage, driving record, claim history and driving experience. It’s reasonable to assume, based on how low the premium is, that this person has a clean driving record (meaning no traffic tickets or other infractions), decades of driving experience and few to no claims filed in the past five years. Their coverage could also be minimal, with a high deductible.

Gender is another factor that can affect one’s premium, as women tend to get into fewer accidents than men. This mainly applies to young drivers, however – those in their 20s and early 30s. So, even though this driver is a woman, her age likely played a small role in determining her premium (or no role at all).

Many of these factors are unfortunately outside of the driver’s control, but not all of them. There are ways to get cheap car insurance, regardless of your situation.

Where in Toronto has the cheapest car insurance?

According to InsuranceHotline.com’s records, drivers were able to secure the cheapest car insurance rates in the following parts of Toronto:

Why FSA and district matter. FSA, or Forward Sortation Area, is the first three characters of your postal code. It designates your district or neighbourhood within the city. It's one of several factors car insurers consider when calculating premiums. Location matters because it can determine the probability of something happening to your vehicle. For instance, some areas have a high likelihood of car theft. Others have high traffic congestion, which results in more car accidents. High numbers in both cases can increase premiums in your area (both for you and your neighbours).

Why age and vehicle matter. Toronto is a congested city with plenty of car theft, which is why it tends to have some of the highest premiums in the province. However, other factors can offset this, such as age and vehicle. For instance, the individuals above are all over 50 years old, which puts them in the ‘experienced driver’ category. Experienced drivers are less likely to suffer car accidents, and thus, are less likely to file a claim. The individuals listed above also own vehicles with low CLEAR ratings – older vehicles at that, which typically don’t cost as much to repair or replace as newer ones. Low CLEAR ratings and low repair and replacement costs mean lower premiums.

Why gender (sometimes) matters. Young men (aged 20 to 30) statistically get into more accidents than young women. As a result, men pay higher premiums. However, this factor does not affect older, more experienced drivers – especially those over 50. That's why it's unlikely that gender has played a role in reducing the above-listed premiums.

Other factors. Other factors that might’ve helped these individuals secure cheap premiums include a clean driving record and few to no claims in the past five years. Both factors indicate that the driver is unlikely to get into an accident or file a claim in the future.

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%.

*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.