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How does Toronto auto insurance work?

Auto insurance laws are set at a provincial level, so Toronto’s insurance rules are the same as the rest of Ontario. Here are the three main things you need to know about how insurance works in the city:

1. All Toronto drivers must have auto insurance.

It is a legal requirement for drivers in Canada to obtain car insurance for their vehicle, and in Ontario, each policy must include third-party liability, statutory accident benefit, DCPD, and uninsured automobile insurance. Drivers can purchase additional coverage if they need more protection.

2. Toronto insurance operates under a no-fault system.

The name causes confusion but it is a simple system. No-fault insurance means drivers submit all claims to their own insurance company, regardless of who is at fault.

3. Toronto auto insurance operates under a private insurance model.

All Toronto drivers purchase insurance from private companies. You can purchase insurance from insurance brokers, insurance agents or the insurance providers themselves (known as direct writers). This competition is good for Toronto drivers, as it helps to keep premiums down.

Sample car insurance quotes completed for drivers in Toronto, Ontario

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

Frequently asked questions (FAQs) about Toronto auto insurance 

Which car has the cheapest insurance in Toronto?

In Toronto, as with the rest of Canada, minivans and SUVs are generally cheaper to insure than smaller vehicles. Insurance companies look at repair costs, crash test ratings, and even the brightness of headlights when determining a vehicle’s insurance risk. Replacement cost is a factor too, so in this respect, older cars score quite well.

According to internal data, the following vehicles are the cheapest to insure in Ontario:

1. Subaru Forester
2. Subaru Crosstrek
3. Subaru Outback
4. Tesla Model 3
5. Mazda CX-3
6. Mazda CX-5
7. Subaru Legacy
8. Honda Insight
9. Acrua RDX
10. Mazda CX-9

For further analysis, check out our recent article on the cheapest cars to insure in Ontario.

It is important to note, the car you drive only comprises a portion of your insurance premium. Your driving history (number of tickets and at-fault accidents) have a much larger impact. A safe driver in a new sports car can still expect cheaper insurance than a dangerous driver in a modest SUV.

Who offers the cheapest auto 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 side by side and find out if you could be getting a cheaper rate.

How much is car insurance in Toronto?

The average Toronto driver pays about $2,000 per year for car insurance, or $166.67 per month. This is 32.89% more expensive than the Ontario average of $1,505 per year, or $125.42 per month.

The exact amount you will have to pay depends on multiple factors, including where in Toronto you live. As indicated in a recent study, auto insurance premiums are highest in North York and Scarborough, while drivers who live in midtown and the downtown core enjoy more affordable rates.

Why is Toronto car insurance so expensive?

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 all kinds of factors that make claims more likely.

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

On top of this, Toronto is a large city and the chance of your car being stolen, or broken in to, 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.

Is car insurance mandatory in Toronto?

Car insurance is mandatory in Toronto and you must have valid insurance in order to operate a vehicle. If you get caught driving without insurance, the minimum punishment is a fine starting at $5,000. Many uninsured drivers immediately see their car impounded and licence suspended. Your future car insurance premiums will skyrocket too. To prevent this, always drive with car insurance.

What are the different types of car insurance in Toronto?

There are optional endorsements and coverages you can add to your insurance policy, but every Toronto driver must have the following:

1. Third-party liability.
2. Direct Compensation Property Damage.
3. Statutory Accident Benefits.
4. Uninsured Automobile Coverage.

See our Ontario page for more information about mandatory auto insurance coverages in this province.

What factors will affect my Toronto car insurance rate?

Every time you request a quote for car insurance, the insurer will ask a few questions to determine how much you should pay. Some of the factors that affect your rate in Toronto include:

  • Your address. If you live in an area with lots of vandalism, theft or break-ins, you will have to pay more for coverage. Parking in a secure garage could help reduce this cost.
  • Your age. Younger drivers, especially males under the age of 25, get in the most accidents and face the highest premiums. As you get older and develop experience, your rates decrease.
  • Your annual mileage. More time on the road increases your chances of getting into a collision. If you can cycle or take the TTC to work instead of driving, you will save on auto insurance.
  • Your driving history. If you have a long, clean driving record, insurance companies will want your business and offer the most competitive prices. Conversely, if you have multiple tickets, or have been found at-fault for an accident in the last few years, you can expect to pay more.

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 an independent body called the Financial Services Regulatory Body (FSRA).

Average Toronto car insurance range of quotes

Based on an internal risk assessment, different insurance companies will charge you different amounts for similar coverage. When we talk about a range of quotes, we are referring to the difference between the cheapest and most expensive quotes offered to an individual driver.

Year Average range of quotes for Toronto drivers Average Ontario premium YOY change
2012 $1,326 1.11%
2013 $1,535 -0.58%
2014 $3,174 -3.51%
2015 $3,137 -2.09%
2016 $2,565 -1.58%
2017 $2,728 0.70%
2018 $2,929 4.37%

A wide range of quotes is suggestive of a volatile market. We see the largest ranges when the average premium has risen or dropped sharply, with some insurers slower than others to change their rates. When the market is stable, these differences are smaller. This pattern is clear when looking at the average range available to Toronto drivers, alongside changes to the average Ontario premium for any given year.

The quote variance increased dramatically in 2014, as the average Ontario premium dropped. It increased again in 2017 and 2018, as the average premium jumped back up. We can infer from this data that the biggest savings are available during periods of instability.

Depending on whether the average premium is going up or down, compare rates to find the companies that have been pro-active in lowering their premiums, or slow to increase them, potentially saving you thousands of dollars per year.

Tips on getting the cheapest car insurance in Toronto

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

Shop around

InsuranceHotline.com shoppers save an average of $427 by comparing car insurance quotes.

Increase deductibles

If it fits your budget, increase your deductibles from $500 to $1,000 to save 5 to 10% on your Toronto car insurance.

Lump sum payment

A single annual payment can shave off administrative fees associated with monthly payments.

Bundle all policies

You can save anywhere from 5 to 15% off each policy when you bundle your home insurance and car insurance under the same insurance provider, which means you’re not only getting the cheapest Toronto car insurance, but 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

Save 10 to 20% when you insure all your vehicles under the same policy.

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 ed

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 comparative quotes. This is why getting instant online Toronto car insurance quotes saves you time and money. 


Compare multiple quotes from over 30 trusted Canadian insurance companies in the same amount of time it takes to get just one quote. 

Driving in Toronto - Rules of the road

Very few things will drive up your auto insurance premiums faster than causing an accident. If you're living in the city of Toronto or frequently drive in it, you need to be aware of the local laws so you can avoid hurting yourself, others, your driving record and/or your insurance history.

Here are some things to be mindful of when driving in Toronto: 

Stop when the streetcar stops

In Toronto, you cannot pass streetcars when the doors are open and must stop behind the streetcar whenever it stops to let passengers board. If you are driving behind a streetcar, wait until the doors are closed and be sure there are no late stragglers attempting to board before you release your foot off that gas pedal. 

Give cyclists space

Drivers are required to give cyclists a minimum of one metre space when passing. If not obeyed, drivers can face a fine of $110 ($85 set fine, $5 court fee plus $20 victim surcharge fee).

Check for cyclists before opening your door

Dooring is a real concern in Toronto. Before opening your door, make sure no cyclists are passing or risk a fine totalling $365 (up to $1,000 if you contest it) plus 3 demerit points upon conviction.

Don't drive distracted

There is enough to distract you in a busy city without the addition of your phone. If you're caught distracted driving, you face fines of $490 to $1,000 plus three demerit points. If careless driving is also a factor, these fines climb to up to $2,000 with six demerit points plus a possibility of jail time and licence suspension. This can also escalate to dangerous driving, which holds jail terms of up to 10 years for causing bodily harm and 14 years for causing death.

Mind your speed

Most local streets have a default speed limit of 50 km/hr when not posted. However, this decreases to 40 km/hr on local streets adjacent to schools, parks and in many neighbourhood communities.