Auto Insurance

REPORT: Ontario’s 15 most expensive cities for car insurance

By: LowestRates.ca Staff on October 6, 2020

If you want to drive in Ontario, you need to pay for car insurance — that's a non-negotiable. But depending on where you live within the province, the cost of your car insurance premiums can vary greatly.

Auto insurance companies determine a person’s premiums based on a slew of factors, including age, driving and insurance history, vehicle make and model, and geographic region. Insurance companies use postal codes to predict risk in a given area, and typically, residents of urban centres tend to pay higher rates than those in rural or remote areas. Because of their larger populations, urban centres tend to have higher numbers of claims — and to insurance companies, that spells risk. 

In order to get a better sense of which Ontario cities feature the highest car insurance rates, we pulled data from the LowestRates.ca auto insurance quoter in September 2020 and compared the top 15 most expensive cities to the rest of the province. Here’s what we found.

Key findings

  • Brampton is the most expensive city in Ontario for car insurance, where rates are 123.5% higher than Ontario’s average price. This can be pegged, in part, due to higher instances of insurance fraud, which results in more claims and therefore, higher premiums.
  • A good chunk of Ontario’s most expensive cities for car insurance are suburbs of Toronto. Drivers in suburbs need a vehicle to get pretty much anywhere, and they drive on bigger highways and more congested roads, each of which would contribute to higher premiums since there’s more risk associated.
  • Many of Ontario’s most expensive cities for car insurance have a significant percentage of drivers with fewer than three years of driving experience. Insurance companies likely consider these to be “new drivers,” and due to lack of insurance and driving history, charge them more for auto insurance.
  • Despite high insurance premiums, there are ways for drivers in Ontario’s most expensive cities to still find savings. 

15 most expensive cities in Ontario for car insurance

  • Brampton (123.5% more expensive than Ontario’s average)
  • Scarborough (83.6% more expensive than Ontario’s average)
  • North York (77.8% more expensive than Ontario’s average)
  • Etobicoke (67.7% more expensive than Ontario’s average)
  • Mississauga (50% more expensive than Ontario’s average)
  • East York (48.1% more expensive than Ontario’s average)
  • Markham (40.8% more expensive than Ontario’s average) 
  • Toronto (36.7% more expensive than Ontario’s average)
  • Hamilton (36.2% more expensive than Ontario’s average)
  • Richmond Hill (35.8% more expensive than Ontario’s average)
  • Windsor (31.5% more expensive than Ontario’s average)
  • Ajax (26.7% more expensive than Ontario’s average)
  • Pickering (25.2% more expensive than Ontario’s average)
  • Barrie (20.7% more expensive than Ontario’s average)
  • Oshawa (20.2% more expensive than Ontario’s average)

The suburb factor

It’s not a huge surprise that Brampton emerged as the most expensive city in Ontario for auto insurance. According to our data, Brampton car insurance rates are 123.5% higher than the Ontario average. The Flower City has made headlines in recent years for its high insurance premiums, and garnered attention from members of parliament on both sides of the political aisle. Insurance companies have pegged Brampton as a hotspot for auto insurance fraud, which happens when criminals stage collisions and overstate damage and injuries in order to collect a large payout from insurance companies. When insurance companies wind up paying out more in claims than they collect in premiums, they raise rates to offset the loss.

It’s also important to note that Brampton, along with many other cities on this list are suburbs that surround the city of Toronto and largely make up what’s known as the GTHA. Suburbs, by their very nature, are typically less expensive to live in than the city they surround, which makes them attractive to lower-income earners and new Canadians. This can also have an effect on rates. Those living in wealthier neighbourhoods might be able to pay out of pocket for repairs to a small fender bender, for instance, whereas lower-income folks may not. As a result, they might be more inclined to put a claim through insurance, even if it’s for a small amount. The more “nuisance” claims — as they’re called — there are in a given area, the higher the premiums will typically be.

We also have to consider the types of auto insurance policies common to suburbs. In order to get around, drivers in suburbs have to drive on bigger highways and more congested roads, which insurance companies view as riskier than driving on city streets with lower speed limits. On top of that, there are likely more “pleasure-rated” car insurance policies in a city like Toronto, where drivers may not use their vehicles to commute to and from work every day, but rather for leisure, such as picking up groceries, or weekend trips out of the city — and rely instead on public transit to get around most of the time. So while there are lots of vehicle owners in Toronto, if they drive fewer kilometres in a year, their rates will likely be lower than those living in suburbs, where you need a vehicle to get pretty much anywhere.

The driving experience factor

According to our data, many of the cities on this list have a significant percentage of drivers with fewer than three years of driving experience. For example, 32.8% of quotes completed for Brampton were from drivers with fewer than three years of driving experience, followed by 30.3% for Windsor, and 29.2% for Barrie. These would likely be seen as “new drivers” in the eyes of insurance companies.

A higher percentage of new drivers in a given region also plays a part in driving up insurance premiums because new drivers are seen as riskier to insure. Driving experience and insurance history are two factors insurance companies use to calculate car insurance rates. The longer you’ve been driving and the longer you’ve been listed on an insurance policy in good standing, the lower your rates will generally be.

Unfortunately for new Canadians, driving history from their home country may not count once they get to Canada. If that’s the case, they’ll have to start from scratch by getting a Canadian driver’s licence and purchasing car insurance soon after they arrive. Insurance companies here in Canada may view this as their first time being listed on an insurance policy, which would also raise their premiums. The same is true for international students on the hunt for student car insurance. Many international students choose to live in suburbs outside of Toronto, such as Scarborough and Mississauga, for their lower living costs. A higher density of new drivers in these areas could also explain why rates are more expensive.

What can drivers in these cities do to save money?

For drivers who live in a city on this list, there’s still an opportunity to reduce auto insurance premiums and find savings. In addition to geographic location and driving experience, there are many other factors that have an impact on how much we pay for car insurance. 

Here are some ways to secure lower auto insurance rates: 

  • Shop around. Compare rates online from multiple car insurance providers before you settle on a policy. Insurers base their prices on the level of risk each customer presents. That’s why car insurance prices are different for every driver.
  • Don’t skimp on coverages. If money is tight it’s much safer to get adequate coverage than to cut back. Having inadequate insurance when the unexpected happens can result in significant expenses because you’ll have to pay out of pocket for the damage. 
  • Build up driving experience and keep a clean record. The longer you maintain a good driving history, the more likely your rates are to gradually come down.
  • Don’t make unnecessary claims. If it’s a small claim and you can afford to pay for the damage yourself, it’s in your best interest to do so. Every time you make a claim it goes on your insurance record and can drive up your premiums. 
  • Bring proof of past experience. Newcomers and students can show proof of insurance history and driving experience to an insurance company and see if they can get a better deal. Especially if you’re moving from a country with similar driving conditions to Canada, you’re more likely to find savings for new driver car insurance.
  • Ask your broker/agent about discounts you’re eligible for. As a newcomer/student you might not have exhausted all your options to find cheaper premiums. Getting winter tires or even taking driver training or education programs are just a few ways you can save money on your car insurance in Ontario. Check with your insurance provider for details. 

Our methodology

We analyzed quote data from the LowestRates.ca auto insurance quoter in September 2020 with the following parameters:

  • Number of drivers: 1
  • Number of vehicles: 1
  • Number of accidents: 0
  • Number of tickets: 0
  • Number of claims: 0
  • Calculations include both people who received a quote for auto insurance on our site and went on to speak with a broker, as well as those who started the quote process but then decided not to proceed before completing it or speaking to a broker.

 

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