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How Auto Insurance Works in Ontario

Ontario works under a government-regulated private insurance system. It’s one of the most regulated insurance markets in the country, a factor that contributes to the highest auto insurance rates in the country. Each insurance company submits operating procedures to the Financial Services Commission of Ontario, which oversees the auto insurance market. When these procedures are approved by the FSCO, they are binding, which means the insurance company must follow them to the letter. They cannot arbitrarily change procedures without first gaining FSCO approval.

Every insurer uses its own methods to calculate premiums. Statistical and personal data are analyzed and each policyholder represents a blend of this data. This creates the risk factor used for the policyholder, and their auto insurance premium stems from this risk factor. Statistical data used in Ontario includes a driver’s age; driving experience; postal code of home residence; and make, model, and year of car. Personal information that impacts premiums include; driving record; insurance claims history and how the car is used, including daily and annual kilometers.

This risk base applies to minimum mandatory insurance coverage as required by the government. Every car on Ontario’s roads is required to have a minimum level of insurance, or the driver/owner of the vehicle could face fines from $5,000 to $50,000. Minimum mandatory coverage includes premiums covering four basic sections. Third-party liability coverage in the amount of $200,000 protects the driver against lawsuits arising from at-fault accidents. Accident benefits pay for medical and rehabilitation costs attributable to an accident for the driver and vehicle occupants. Direct Compensation-Property Damage coverage pays losses to a driver back directly by their own insurer, in the case of specific types of accidents. Uninsured/unidentified motorist coverage protects against incidents where the other driver is uninsured, or in the case of a hit and run accident, where the other driver is unknown. Additional optional coverage and increases on mandatory minimum coverage are available also.

What Are Average Car Insurance Rates in Ontario

Drivers in Ontario pay the highest rates compared to any other part of Canada. Congestion, poor roads, and high claims costs add to tight government regulations to create high costs. Car insurance fraud is thought to be another contributor to high rates, adding over $1.5 billion in claims annually. As of 2020, on average, drivers pay about $1,250 annually for auto insurance. This average doesn’t apply on a local basis. Drivers in eastern Ontario, around Kingston and Belleville, enjoy the lowest average, around $1,100 annually. The north and northwest suburbs of Toronto experience the highest rates, around $2,400 annually.

YoY (Year-over-Year) Average Ontario Car Insurance Prices

As of February-11-2022, the average cost of car insurance in Ontario is $1,349.

YearAverage Auto Insurance Policy Price in Ontario*

How to Get the Best Possible Car Insurance Quotes in Ontario

Because Ontario has a competitive private auto insurance market, the price for one driver’s policy may change drastically between insurance companies. Each company has its own method of calculating driver risk, as well as interpreting statistical risk data. An insurance company may also target a select segment of the auto insurance market, offering incentives, promotions, packages, and discounts to attract certain segments of the insurance-buying market.

This presents both opportunities and challenges for the auto insurance consumer. The best rate is out there, but the only way to find it is through aggressive comparison shopping. There are over 100 companies underwriting car insurance in Ontario, and not all of them issue policies in all areas. Contacting 100 companies isn’t something most people have the time to do.

Brokers represent a number of companies, and so they can make the search somewhat easier. One drawback, however, is that the two brokers may have some overlap. That is, each may represent several insurers in common. Brokers may favor certain companies also, which may or may not be in your best interests.

A new tool in the car insurance price war is available right here at Ratelab. It’s called a car insurance calculator. You start by entering your home postal code on the Ratelab page. Continue filling out your personal data and car insurance needs, and the calculator will search through dozens of auto insurance providers online, behind the scenes. You’ll be presented with quotes from the lowest cost insurance companies that meet the features and coverage that you want. Armed with the best deals, you’ll know where to start to make your smartest car insurance purchase.

Best Rated Auto Insurance Companies in Ontario

CompanyRanking based on a 1000 point scale
The Co-operators781
State Farm768
Intact Insurance764
The Personal755
Ontario Regional Average753
Aviva Insurance749
RBC Insurance737
TD Insurance734
Johnson Insurance721

Source: JD power


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