Auto insurance is mandatory for all drivers in Ontario. This includes mandatory coverage of direct compensation, third-party liability, accident benefits, and uninsured automobiles. Ontario has one of the highest auto insurance rates in Canada. The Financial Services Commission of Ontario also referred to as the FSCO, dictates what can and cannot be used as variables when auto insurance providers are calculating your auto insurance premium.
The Average Monthly Cost Of Car Insurance In Ontario
$125 per month is the average cost per month for vehicle insurance in Ontario.
Many people prefer to pay their car insurance premiums monthly. This can make it easier for those who cannot afford to pay the lump sum annual premium all at once. The average monthly cost of car insurance will depend on the cost of your total annual premium. To calculate your monthly car insurance you simply divide your total annual premium by 12. For example, if you go by the provincial average car insurance of $1505, and divide it by 12, your monthly car insurance would be $125.
Why Is Auto Insurance So High In Ontario?
This is because of several factors.
There are a few reasons why auto insurance is so high in Ontario.
The largest contributing factor that raises Ontario auto insurance is insurance fraud. Every year on average insurance companies pay out approximately $1.6 billion dollars due to insurance fraud. Unfortunately, it’s drivers that will absorb most of this cost. Every Ontario driver will pay approximately $165 per year extra to compensate insurance companies for this huge problem in Ontario.
- Increase In Severe Weather
Another major contributing factor to high insurance rates in Ontario is the increase in severe weather which causes many more car accidents and property damages. Severe weather events that cause insurance companies to pay out high amounts of property damage also affect the car insurance industry. According to IBC data, many of the disaster economic costs around the world have increased over 5 times.
Ontario has a very high population which increases the number of insurance claims. There are many heavily congested roadways that can lead to a higher number of automobile accidents.
- Distracted Driving Incidents
Distracted driving incidents causing death in auto collisions have more than doubled since the year 2000. Many drivers are distracted by using their cell phones while driving.
- Higher Number Of Expensive Vehicles on The Road
Due to modern technology and smart features the cars of today cost a lot more money to repair than they did in past decades. It only goes without saying the higher the cost to repair the higher the cost of the annual premium.
While inflation isn’t a huge contributing factor, it still leads to higher auto insurance rates in Ontario.
Factors That Play a Role In Determining Your Car Insurance Premiums In Ontario
There is no flat rate across the board for Ontario drivers. Car insurance is a very individual matter. There are so many variables that come into play when insurers are determining what your premium will be. Factors that can influence your auto insurance rates can include:
- Your age
- Your driving history
- Make and model of your vehicle
- Ages and number of drivers in your household
- Your deductible
- Your auto insurance history
- Your gender
- Your marital status
- Your geographical location
- A lapse in auto insurance coverage
- Annual mileage
- Purpose of driving the vehicle
Industry Factors That Affect Car Insurance Rates In Ontario
There are certain factors within the auto insurance industry that are out of an individual’s control. These factors have a direct impact on the average rate of auto insurance in Ontario. These factors include:
- Approved rate increases
- High cost and number of insurance claims
- Insurance fraud
Does The Cost of Auto Insurance Ever Drop?
The Financial Services Commission of Ontario dictates increases and decreases in auto insurance. Most often than not, auto insurance will increase, however, the provincial government on occasion will mandate auto insurance discounts. An example of this is when the provincial government-mandated auto insurance companies offer discounts to drivers that installed winter tires on their vehicles, an act of safe driving.
It Pays To Shop Around For Auto Insurance
When you are purchasing auto insurance it only makes sense to shop around and obtain quotes from various companies. Also using a website that does your shopping for you finding you the best rates is highly recommended. These websites deal with a very high number of insurance companies. They are also very user-friendly. You simply enter all the required information for a quote and the website will find you the best deal.
Best Ways To Reduce Your Auto Insurance Premiums
As an Ontario driver, you already know that the cost of auto insurance is very high compared to other provinces. However, there are some things you can do yourself that will help keep your insurance premiums a little lower. Ask your insurance provider for their offered discounts such as:
- A retiree
- Installing snow tires
- Marital Status
- Multi-insurance product discounts (bundling)
- Installing a driving app
- Repeated renewal discounts
- Clean driving record
- Claim free discounts
There are other ways to help keep your premiums a little lower such as:
- Choosing an insurance friendly vehicle
- Keep your annual mileage low
- Increase your deductible
- Reside in a low crime area
- Install a driving app
- Successfully complete a driving course
- Purchase all your insurance needs from the same company
- Remain claim-free
- Don’t let your auto insurance lapse
- Keep your auto insurance account in good standing
- Never drink and drive
- Avoid traffic infractions
Even though it is expensive to purchase auto insurance in Ontario, there are ways to help you reduce your annual premiums. Always remember to shop around to find the best possible insurance coverage and rates.