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• How does Toronto auto insurance work?
• How to get the cheapest Toronto car insurance quote
• Toronto mandatory and optional auto insurance coverages
• How much does Toronto car insurance cost?
• Where in Toronto has the cheapest car insurance?
• Compare Toronto car insurance premium against other Ontario regions
• 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, DCPD, 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.

Toronto mandatory and optional auto insurance coverages

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.

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%.

*Represents the average saved by Toronto, Ontario, shoppers who obtained an auto insurance quote on InsuranceHotline.com and transacted via our contact centre between January and December 2022. The average savings amount 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.