The exact ranking can fluctuate year by year based on various factors like accident rates, insurance claims, vehicle thefts, and even changes in insurance regulations.

Here’s the list of 20 cities/areas in Ontario that have historically seen higher car insurance premiums:

1. Brampton
   • Average Rate: $2,500 – $3,000 annually
   • Why: High density, increased accident rates, and higher claim costs.
2. Vaughan
   • Average Rate: $2,400 – $2,900 annually
   • Why: High vehicle collision rates and expensive car models.
3. Mississauga
   • Average Rate: $2,300 – $2,800 annually
   • Why: High density and increased accident rates.
4. Markham
   • Average Rate: $2,200 – $2,700 annually
   • Why: Higher claim costs and increased accident rates.
5. Toronto
   • Average Rate: $2,000 – $2,600 annually
   • Why: High traffic density, theft rates, and claims.
6. Richmond Hill
   • Average Rate: $2,000 – $2,500 annually
   • Why: Higher claim costs and accident rates.
7. Ajax
   • Average Rate: $1,900 – $2,400 annually
   • Why: Proximity to high-density areas and increased collision rates.
8. Hamilton
   • Average Rate: $1,800 – $2,300 annually
   • Why: High claims frequency.
9. Pickering
   • Average Rate: $1,800 – $2,300 annually
   • Why: High accident rates and proximity to high-density regions.
10. Whitby

• Average Rate: $1,700 – $2,200 annually
• Why: Increased accident rates and claims.

11. Scarborough

• Average Rate: $1,700 – $2,200 annually
• Why: Traffic congestion and high collision rates.

12. Oshawa

• Average Rate: $1,600 – $2,100 annually
• Why: Proximity to the GTA and accident rates.

13. Halton Hills

• Average Rate: $1,600 – $2,000 annually
• Why: Proximity to high claim areas.

14. Milton

• Average Rate: $1,500 – $2,000 annually
• Why: Growing population and increasing accident rates.

15. Oakville

• Average Rate: $1,500 – $2,000 annually
• Why: High car values and accident rates.

16. Burlington

• Average Rate: $1,400 – $1,900 annually
• Why: High traffic volume from commuters.

17. St. Catharines

• Average Rate: $1,400 – $1,800 annually
• Why: High claim rates.

18. Aurora

• Average Rate: $1,400 – $1,800 annually
• Why: Proximity to high-density areas.

19. Newmarket

• Average Rate: $1,300 – $1,700 annually
• Why: Proximity to the GTA and accident rates.

20. Kitchener

• Average Rate: $1,300 – $1,700 annually
• Why: Rapid urbanization and increased accident rates.

Reasons for high insurance rates include:

Accident Rates

Accident rates have a direct influence on car insurance rates for a variety of reasons. Here’s how and why:

1. Risk Assessment: Insurance is fundamentally about assessing and managing risk. When a particular area or demographic has a high accident rate, it indicates a higher risk. Insurers will typically charge higher premiums to account for this elevated risk.
2. Claims Frequency: With a higher accident rate, insurers can expect a higher frequency of claims. Each claim can represent a significant cost to the insurer, especially if it involves bodily injury or significant property damage.
3. Cost of Claims: The total cost of claims in an area directly affects the insurance premiums. If, in a particular region, the costs associated with accidents (medical bills, repair costs, legal fees, etc.) are high, it will result in higher premiums.
4. Loss Ratios: Insurers use loss ratios (claims paid out vs. premiums received) to help determine the profitability of their policies in a given area. High accident rates can lead to higher loss ratios, prompting insurers to raise premiums to maintain profitability.
5. Reinsurance Costs: Insurance companies themselves purchase insurance (reinsurance) to cover especially large or unexpected losses. If an insurer faces high costs due to increased accidents in a certain area, the cost of reinsurance might go up, which can then be passed on to policyholders in the form of higher premiums.
6. Behavioral Patterns: Areas with high accident rates might also exhibit certain behavioral patterns that insurers deem risky. For instance, if a region has a high rate of DUI incidents leading to accidents, insurers will take that into account, even for drivers who don’t drink and drive. Everyone in that area might see a bump in premiums due to the actions of a subset of drivers.
7. Future Predictions: Insurance companies use past data to predict future risks. If a particular area has a rising trend in accident rates, even if the absolute numbers aren’t very high yet, insurers might raise rates in anticipation of future risks.
8. Competition: While high accident rates generally push premiums up, the competitive landscape among insurers can moderate this effect. If there’s stiff competition among insurance companies in a high-accident area, they might not raise rates as quickly or as high to avoid losing market share.

Population Density

Population density can significantly influence car insurance rates. Here’s a breakdown of how and why:

1. Higher Traffic Congestion: Densely populated areas tend to have more vehicles on the road. This increased traffic can lead to congestion, which raises the likelihood of accidents, especially minor “fender-benders” and rear-end collisions.
2. Increased Risk of Collision: More vehicles in a confined space naturally increase the chances of vehicles colliding with one another. It’s a simple matter of probability: the more cars, the higher the chance of at least some of them colliding.
3. Higher Crime Rates: Densely populated areas, especially urban centers, can sometimes have higher rates of vehicle-related crimes such as theft or vandalism. Higher crime rates can lead to more insurance claims, which can, in turn, drive up premiums.
4. Costlier Repairs: Urban areas, where population density is typically higher, often have higher living costs. This can translate to higher costs for car repairs, parts, and labor, leading insurance companies to charge higher premiums.
5. Greater Likelihood of Uninsured Drivers: In some densely populated areas, there may be a higher percentage of uninsured drivers. When accidents involve uninsured drivers, insurance companies often bear higher costs, which can then be passed on to insured drivers in the form of higher premiums.
6. Parking Challenges: In densely populated urban areas, parking can be a challenge. Cars might get parked on the street, increasing the risk of them being hit by other vehicles, stolen, or vandalized.
7. Pedestrian and Cyclist Interactions: Densely populated areas often have more pedestrians and cyclists. This increases the risk of vehicle-pedestrian or vehicle-cyclist accidents, which can lead to significant insurance claims due to injuries.
8. Infrastructure Strain: High population density can put strain on road infrastructure, leading to issues like potholes or inadequate signage. Such issues can contribute to accidents and subsequent claims.
9. Data Trends: Insurance companies rely heavily on data to set their rates. If the data shows that densely populated areas have more frequent claims, even if the individual reasons are varied, the rates for those areas will be set higher.
10. Behavioral Factors: Densely populated areas might exhibit different driving behaviors. For instance, aggressive driving, rapid lane changes, or honking might be more common in congested urban environments, contributing to the risk profile of the area.

Vehicle Thefts

Vehicle thefts have a notable impact on car insurance rates. Here’s an in-depth look at how and why:

1. Direct Claims Costs: When a vehicle is stolen, the insurance company often has to pay out a significant claim to either replace the vehicle or compensate for its value. This direct cost is a primary reason insurance rates rise in areas with high vehicle theft rates.
2. Increased Risk Profile: Insurance is based on assessing and pricing risk. Areas with higher vehicle theft rates are deemed riskier, leading insurers to charge higher premiums to account for the increased likelihood of a theft claim.
3. Ancillary Costs: Beyond the direct replacement cost of the stolen vehicle, there can be other related claims. For example, personal belongings inside the car might also be covered and claimed. Sometimes, stolen vehicles are used to commit other crimes or are involved in accidents, leading to further claims.
4. Preventive Measures: In areas with high vehicle theft rates, insurance companies might offer discounts to policyholders who take extra precautions, such as installing anti-theft devices. While this can lead to individual discounts, the overall rate for the area could still be higher due to the elevated risk.
5. Resale of Stolen Parts: Some vehicles are especially attractive to thieves because of the value of their parts in the black market. If certain car models are frequently stolen for their parts, owners of those models might experience higher insurance premiums.
6. Loss Ratios: Insurers look at loss ratios (the ratio of claims paid out to premiums received) to determine the profitability of insuring drivers in a specific area. High vehicle theft rates can negatively impact this ratio, prompting insurers to raise premiums to maintain desired profit margins.
7. Reinsurance Costs: Insurers often buy reinsurance to protect themselves from substantial losses. If they’re paying out many claims due to vehicle thefts, their reinsurance costs might rise, and those costs can be passed on to policyholders.
8. General Distrust: Even if a person hasn’t experienced vehicle theft, living in a high-theft area can lead to behavior that indirectly influences rates. For instance, people might make more claims for minor damages, fearing that their car will be targeted if it appears new or well-maintained. This uptick in claims can contribute to higher rates for everyone in the area.
9. Data Analysis: Modern insurance pricing is heavily reliant on data analysis. Insurers use sophisticated models to predict risk and set premiums. If the data indicates a strong correlation between vehicle thefts and overall claim costs in an area, premiums will reflect that.
10. Cost of Additional Coverage: Drivers concerned about vehicle theft might opt for comprehensive coverage, which protects against theft. While this provides added protection, it also comes at a higher cost, increasing the overall average premium in high-theft areas.

Fraud

Fraud has a significant impact on car insurance rates. Insurance fraud includes any act committed with the intent to obtain a fraudulent outcome from an insurance process. This can range from exaggerating claims to staging accidents. Here’s how and why fraud influences car insurance rates:

1. Direct Costs to Insurers: Fraudulent claims cost insurance companies billions of dollars every year. These are direct costs that insurers often recoup by raising premiums for all policyholders.
2. Investigation Costs: To combat fraud, insurance companies invest in specialized investigative units (often called Special Investigation Units or SIUs). The cost of these investigations, including personnel, technology, and other resources, gets factored into the premiums.
3. Legal Proceedings: Once fraud is identified, insurers may pursue legal action against the perpetrators. The legal costs, from attorney fees to court costs, can be substantial and are often passed onto consumers in the form of higher premiums.
4. Loss Ratios: A high number of claims (fraudulent or otherwise) can result in a higher loss ratio for the insurer (claims paid out vs. premiums received). An unfavorable loss ratio can be a reason for an insurer to raise rates.
5. Higher Reinsurance Costs: Insurance companies purchase reinsurance to protect themselves against large losses. High fraud rates can increase the cost of reinsurance, which may then be passed on to policyholders.
6. General Distrust: In areas with high fraud rates, insurers might become more skeptical of all claims, leading to more rigorous and longer claim investigations. This can increase the cost and time associated with processing even legitimate claims.
7. Fraud Trends and Data Analysis: Insurance companies use data analytics to identify patterns and trends. If certain areas, vehicle types, or demographic groups are more associated with fraud, rates might be adjusted upwards to account for this increased risk.
8. Preventive Measures and Discounts: To counteract fraud, insurers might offer discounts to those who take preventive measures, like installing dash cams. While this can save money for some, the overall base rate could still be higher in high-fraud areas.
9. Market Instability: High levels of fraud can introduce volatility and unpredictability into the insurance market. This instability can deter competition, leading to higher prices due to a lack of competitive pressure.
10. Public Awareness Campaigns: Insurers, in collaboration with governments or industry groups, might run public awareness campaigns to educate people about fraud and its consequences. The cost of these campaigns can also be factored into insurance rates.

Cost of Repairs

The cost of repairs plays a crucial role in determining car insurance rates. Here’s how and why:

1. Direct Claims Costs: When a vehicle is involved in an accident, one of the primary expenses insurance companies face is the cost to repair the vehicle. If repair costs are high, the amount the insurer pays out in claims will also be high. This directly influences the premiums they need to charge to maintain profitability.
2. Technological Advancements: Modern vehicles come with a range of advanced features, from sensors and cameras to sophisticated infotainment systems. While these features improve safety and driving experience, they can be expensive to repair or replace when damaged.
3. Quality and Type of Parts: Original Equipment Manufacturer (OEM) parts tend to be more expensive than aftermarket parts. If a policy promises to use only OEM parts for repairs, this can drive up the cost of claims and, consequently, premiums.
4. Labor Costs: The hourly rate charged by mechanics and technicians can vary based on region, training, and the complexity of the repair. Areas with higher labor costs can see higher insurance rates.
5. Total Loss Scenarios: If the cost to repair a vehicle exceeds its actual value, the insurer might declare it a total loss. The rising cost of repairs can increase the number of vehicles deemed total losses, leading insurers to pay out the vehicle’s full value more often.
6. Frequency of Claims: If cars in a particular region or demographic tend to get into accidents that require more frequent or costly repairs, insurers will adjust premiums upward to account for this.
7. Impact on Comprehensive Coverage: The cost of repairs doesn’t just affect collision coverage. Events covered under comprehensive coverage, like vandalism or damage from hailstorms, are also influenced by repair costs.
8. Age and Model of the Vehicle: Older vehicles might have parts that are harder to find or have been discontinued, making them more expensive. On the other hand, newer luxury models or sports cars can also be costly to repair due to their specialized components.
9. Predictive Analysis: Insurance companies use predictive modeling to estimate future claims costs. If data suggests that repair costs are trending upward, insurers might preemptively increase premiums.
10. Competition and Market Conditions: If all insurers face rising repair costs, there might still be variability in how much each company raises its rates, based on its risk tolerance, market strategy, and operational efficiency.
11. Indirect Costs: High repair costs can also introduce indirect costs for insurers, such as the need for extended rental cars for policyholders while their vehicles are being repaired.