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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.

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. However, 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.

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. All of these factors combine to make Toronto one of the most expensive cities for car insurance in Ontario.

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.

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).

Get the cheapest Toronto car insurance when you bundle with home insurance

Living in Toronto is expensive. According to reports, homes cost an average of $1 million to buy and a one-bedroom rental averages more than $2,000 a month. Your home, tenant or condo insurance is another expense—albeit a necessary one—on top of that. And if you drive a car in the city, which is one of the most expensive cities to insure a vehicle in the province, then yet another expense is added to your list. Ouch!


The good news is that there are savings to be had when you bundle your home insurance and car insurance under the same insurance provider. You can save anywhere from five to 15 per cent off each policy when you combine them, which means you’re not only getting the cheapest Toronto car insurance, but the cheapest Toronto home insurance too. Depending on your situation, this can provide up to hundreds of dollars in additional savings. 


If you haven’t already, switching providers so that all of your insurance is under one proverbial roof is another way to save on your insurance. Compare car insurance rates today—and be sure to select the bundling option when completing your quote—to find out how much you can save.

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:

  1. Shop around. InsuranceHotline.com shoppers save an average of $427 by comparing car insurance quotes.
  2. 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.
  3. Lump sum payment. A single annual payment can shave off administrative fees associated with monthly payments.
  4. Bundle policies. Purchase auto insurance and home insurance from the same company to save 5 to 15% on each product.
  5. Insure all vehicles. Save 10 to 20% when you insure all your vehicles under the same policy.
  6. Change tires seasonally. Let your insurer know if you have winter tires. A winter tire discount could save you about 5%.
  7. 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.
  8. 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.
  9. 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.
  10. 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

Sample car insurance quotes completed for drivers in Toronto, Ontario

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