Both Ontario and Alberta use privately provided insurance systems regulated by their respective provincial governments. Ontario has the most expensive car insurance in Canada, while Alberta falls toward the middle of the pack. Comparing the level of affordability of insurance in each province reveals a different experience.

Comparing Car Insurance in Alberta and Ontario

A 2011 study compared both dollar cost and affordability of car insurance across Canada. While prices have changed since then, relative patterns remain similar. The average driver in Ontario paid close to $1,300 for car insurance annually. This was over $160 more than British Columbia, the second-most expensive province, and the highest priced of Canada’s public insurance providers.

By contrast, Alberta’s average was just over $1,000. This is close to the halfway point between Quebec, near $650 annually, and Ontario. Quebec has not only the lowest car insurance rates in Canada, it is the only province with a hybrid public/private car insurance system.

Affordability is a different matter. The study looked at cost of car insurance, and it also compared that cost to how much of a driver’s income car insurance consumed. For reference, Canada’s most affordable insurance is also Quebec’s. Compared to a motorist’s disposable income, it took 2.5 percent of that income to purchase auto insurance in Quebec.

It’s no surprise that Ontario’s average coverage eats up the most disposable income of its drivers. The average motorist in the province paid 4.5 percent of their disposable income on car insurance premiums. The strong economy of Alberta reflects in the affordability of car insurance. Though in dollar cost Alberta drivers are middle of the pack, at 2.7 percent of disposable income, it’s the second most affordable insurance in Canada, behind only Quebec.

Reasons for the Difference in Rates

road condition

Six of the top 12 urban centres in Canada are in Ontario, versus only Calgary and Edmonton in Alberta. The third largest city in Alberta, Lethbridge, is 34th nationwide. The congestion, road conditions and accident frequency of cities contribute to both the size and frequency of accident claims.

The Greater Toronto Area, particularly the northern suburbs, has an epidemic of car insurance fraud. This results in more expensive claims settlements. While that affects insurance costs in the areas near the incidents of fraud, the excess payouts amount to an estimated $1.2 billion annually. This expense is, in part, borne by drivers across the province.

The Importance of Comparison Car Insurance Shopping

Since Alberta and Ontario are both private auto insurance marketplaces, comparison is any driver’s best bet to pay the least in car insurance premiums. Every insurance company weighs risk factors according to their own actuarial formula. This means that one driver’s insurance needs may have as many prices as there are insurance companies.

In Ontario, Ratelab’s car insurance calculator is the most thorough way to search through dozens of insurance providers to find the lowest rates. It’s free to use and drivers are under no obligation to any insurance company’s quote. Simply enter your personal car insurance data and policy needs and Ratelab will return the lowest cost insurance options for your needs.