Your Toronto Car Insurance Costs How Much?

By Lesley Green
A bunch of cars driving down the Gardiner Expressway with Toronto's skyline in the near distance
  • Toronto drivers pay an average of $2,201 for car insurance.
  • COVID-related rebates and premium breaks expected to continue into 2021.

How much do you spend a year on auto insurance? If you live in Toronto, we bet it’s more than the provincial average of $1,505 reported by the Insurance Bureau of Canada (IBC) or the $1,664 the province’s regulator says Ontario drivers pay.

Way more. In fact, a RATESDOTCA report estimates the typical Toronto driver pays an average of $2,201 for their car insurance. The same report says the provincial average is $1,616. In comparison, the Financial Services Regulatory Authority of Ontario (FSRA) – the province’s regulator – says drivers in the GTA pay an average of $2,252 per year for coverage.

No matter how you look at it – or who is valuing the insurance costs - the price of Toronto auto insurance is a drain on the bank account.

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What’s going on with auto insurance rates in Ontario?

For at least two years before the COVID-19 pandemic, Ontario auto insurance rates were trending upwards. FSRA (and its predecessor, the Financial Services Commission of Ontario) approved overall auto insurance rate increases each quarter.

Timeframe Average Increase # of Insurers Approved
Q1 2018 2.23% 32
Q2 2018 1.11% 37
Q3 2018 2.06% 20
Q4 2018 3.35% 23
Q1 2019 2.70% 23
Q2 2019 1.99% 18
Q3 2019 2.60% 26
Q4 2019 1.56% 21

Then 2020 happened, and everyone knows the year was unlike any other. COVID-19 changed everything, including the auto insurance industry. Insurance rebates, premium reductions, and other forms of relief (like deferring payments and waiving non-sufficient fund fees) became the norm.

Timeframe Average Market Impact (Increase/Decrease)
Q1 2020 0.85%
Q2 2020 1.28%
Q3 2020 0.0%
Q4 2020 -0.17%

According to FSRA, since March 17, 2020, FSRA approved 83 rate applications, and 81 of those applications were for an average premium change of 0% or less. Almost all approvals were related to COVID-19 and what fewer drivers on the road entailed.

From an auto insurance standpoint, the outlook appears to be much the same for drivers in 2021. FSRA says it will continue to ensure that auto insurance rates reflect Ontarians’ changing driving habits, and they expect auto insurers to provide customers with more rebates and rate reductions in 2021.

What goes into determining your Toronto car insurance rate?

What drives your Toronto car insurance rate? The reality is, it’s complicated as many factors go into the premium you pay. For example, your driving record, insurance history, vehicle driven, and commute distance play a role, as do other variables such as the age and experience of any additional drivers you have listed on your policy. But when the only thing different -- than say someone who lives in Peterborough, Ottawa, or London -- is the fact you live in Toronto, why do rates vary?

It’s all about the likelihood of a claim. Insurance companies study statistical data on claims frequency (and severity). If collectively, the city you live in is more likely to report insurance claims, this added risk will be reflected in your premium. It’s an unfortunate reality of living in a big city with lots of people. Collisions, theft, break-ins, and even insurance fraud combine to make Toronto one of the most expensive cities in Ontario for insurance coverage.

Find the best auto insurance rate in Toronto

The last 12 months have stretched many Canadians financially. If your auto insurance rates continue to eat up too much of your monthly budget – despite the COVID-related rebates and discounts available – it’s time to compare quotes for a new lower rate. A lot has changed in the last year, and your provider may no longer offer you the best price in today’s market. There’s no need to wait until your policy comes up for renewal if you could be saving money today.