Auto Insurance

Here is a look at all the factors that affect your car insurance rate in Ontario

By: John Shmuel on May 31, 2017
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So, you’ve got your eyes on your dream ride. It’s there, sitting in a dealership lot, gleaming in the sun. You’re convinced the two of you are meant to be.

But before you walk in and get the keys, there’s something you have to know.

That car could drastically change your monthly auto insurance premium.

For many, getting their first car or buying a new car is an insurance eye-opener. In Ontario, the type of car you drive has a significant impact on the insurance rate you pay.

And it’s not the only factor that determines your rate. Your age, sex, marital status and your postal code all affect your rate. Among other things.

So, let’s take some time to break down all the factors that determine how much your premium will cost you every year.

The car you drive

Your vehicle is a major variable in determining your auto insurance rate. The spread between drivers with different cars but comparable driving histories can be thousands of dollars a year.

Take a look at our list of the Top 10 Cheapest Cars to Insure in Canada. As you can see, the average price to insure between the cheapest and the most expensive is more than $500 annually.

That number keeps widening as you go down the list. So, if you want to cut your insurance rates, opt for vehicles that have reputations as being cheap to insure, such as Toyota Corollas or the Mazda3.

Your age

There’s a misconception among drivers that auto insurance rates automatically go down when you turn 25. While this isn’t generally true, your age does play a factor in your rate, and generally, you pay less as you get older.

For example, check out data we pulled from our insurance quoter below. This is based on a male driver who owns a 2015 Mazda3 GS with a clean driving record. As you can see, the higher the age, the lower the quote.

17 — $2,857
18 — $2,535
19 — $2,434
20 — $2,344
21 — $1,727
22 — $1,563
23 — $ 1,511
24 — $1,476
25 — $1,400

Your sex (and even your marital status)

This one might seem a little discriminatory, but the Financial Services Commission of Ontario, or FSCO, has ruled that insurers can use the sex of a driver as a variable in how they determine auto insurance rates.

Now, just because FSCO allows it, doesn’t mean that all auto insurers necessarily have to use sex as a variable. As far as we’re aware, however, all of the providers in Ontario do. (We’d love to be proven wrong on this front. If you know an insurer that doesn’t, drop us a line.)

Marital status is another variable that FSCO says insurers can use to set their rates. However, not all insurers use this variable. For those that do, the married are viewed as safer drivers and so they get a discount.  

Your driving history

This is another big variable. If you have a clean driving record, you could be saving thousands of dollars a year compared to someone who has been in multiple accidents over their driving history.

And it’s not just claims and accidents that can have an effect on your rates. Traffic violations, such as speeding tickets or running a red light, will also raise your insurance rate. This typically won’t show up until you have to renew your premium, and only if your insurer makes a check on your driving record.

Either way, expect any accident or traffic violation to potentially impact your rate.

Your location

Your address significantly affects how much you’re paying each year. Driving just a few blocks over into a different area code can often times have a drastic effect on your auto insurance rate.

That’s because your area’s history of auto insurance claims will impact your rate. If you live in a neighbourhood with frequent car theft, break-ins or collisions, then you’re viewed as being more likely to have these things happen to you. And insurers compensate by charging you a higher rate.

The tradeoff, however, is that the areas with the lowest rates also tend to be more affluent neighbourhoods. Sure, they statistically tend to be safer, but they’re also more expensive to live in. So while you’ll be saving on auto insurance rates, you’ll be paying a premium just to live there.