Car insurance is mandatory in Ontario so all drivers have financial protection in case of an accident. Car insurance costs vary widely depending on several factors including driving history, vehicle type, location and coverage level. Some drivers pay more than others based on these risk factors so it’s important to know what affects car insurance rates.

Many Ontario drivers find it hard to navigate fluctuating insurance rates and figure out the right coverage for them. Understanding how insurance companies calculate premiums can help drivers make informed decisions and find ways to lower their costs.

What Determines Car Insurance Rates in Ontario?

Car insurance rates in Ontario are based on multiple factors that measure a driver’s risk. Insurers look at these factors to determine the likelihood of claims which directly affects the cost of coverage.

Driving History

Insurance companies prioritize safe driving records when calculating premiums. A clean history with no accidents or traffic violations results in lower insurance rates. However, drivers with:

• At-fault accidents,
• Speeding tickets,
• DUI offences, or
• Other traffic violations

will face higher premiums as they are considered a greater risk.

Related Article: Does Paying Ticket Fine Affect Your Insurance?

Age and Experience

Younger and less experienced drivers typically pay higher premiums because they are statistically more likely to be involved in accidents. New drivers, especially those under 25 years old, often see the highest rates.

Conversely, older and more experienced drivers benefit from lower premiums, particularly if they have a long history of safe driving.

Vehicle Type

The make, model, and age of a vehicle influence insurance costs. Vehicles with:

• High repair or replacement costs,
• Powerful engines that increase the risk of high-speed driving,
• A history of frequent theft, or
• Limited safety features

tend to have higher insurance premiums.

On the other hand, vehicles with advanced safety features, strong crash-test ratings, and lower replacement costs generally come with lower premiums.

Location

Where a driver lives in Ontario significantly impacts car insurance rates. Urban areas, such as Toronto, Mississauga, and Brampton, typically have higher insurance premiums due to:

• Higher traffic congestion, leads to increased accident risk.
• Higher rates of vehicle theft and vandalism.
• Greater insurance fraud activity.

In contrast, rural areas tend to have lower premiums, as they experience less traffic and lower crime rates.

Coverage Level

The type and level of coverage selected directly affect insurance costs. A basic policy with minimum coverage will cost less, but it may not provide adequate financial protection. Drivers who choose:

• Comprehensive coverage for protection against theft, vandalism, and weather damage.
• Collision coverage for accident-related vehicle repairs.
• Higher liability limits for greater protection against lawsuits.

will pay higher premiums but receive better financial security in the event of an accident.

Annual Mileage

Drivers who log more kilometres annually are considered at higher risk, as increased road time raises the chances of an accident. Insurance companies may charge higher premiums for drivers who use their vehicles for:

• Long daily commutes.
• Frequent long-distance travel.
• Commercial or rideshare purposes.

Those who drive fewer kilometres per year may qualify for low-mileage discounts, helping to reduce their insurance costs.

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Average Cost of Car Insurance in Ontario

Ontario has the highest car insurance premiums in Canada and many factors go into how much you pay. As of 2024, the average annual cost of car insurance in Ontario is around $1,800 or $150 per month. But that can vary depending on where you live, your driving history and what kind of vehicle you have.

Among Ontario’s big cities, Toronto and Brampton have the highest insurance costs mainly due to more traffic congestion, accidents and vehicle theft. Toronto averages around $2,044 per year and Brampton is close behind at $1,957. Mississauga and Hamilton are slightly lower at $1,588 and $1,539 respectively.

Ottawa has one of the lowest average insurance costs in the province, with drivers paying around $1,027 per year. Lower traffic density and fewer claims are the reason for the lower premiums in Ottawa compared to other urban areas in Ontario.

How to Lower Your Car Insurance Premiums

While car insurance costs in Ontario can be high, there are several effective ways for drivers to reduce their premiums and maximize savings.

• Bundle Insurance Policies – Many insurance providers offer discounts for bundling auto insurance with home, tenant, or other policies under the same provider. This can significantly reduce overall costs.
• Increase Deductibles – Opting for a higher deductible lowers monthly premiums, but it’s important to ensure that you can afford the deductible amount if a claim is necessary.
• Maintain a Clean Driving Record – Avoiding traffic tickets, at-fault accidents, and other violations can make you eligible for lower rates over time. Many insurers reward safe drivers with discounted premiums.
• Take Advantage of Discounts – Many insurance providers offer multi-vehicle discounts, student discounts, and reduced rates for low-mileage drivers. Checking for available discounts can lead to substantial savings.
• Install Safety Features – Vehicles equipped with anti-theft devices, automatic braking systems, and other advanced safety features often qualify for lower premiums.
• Work with a Brokerage – Instead of settling for the first quote, working with an insurance brokerage like Marathon Insurance allows drivers to compare multiple providers and find the most competitive rates tailored to their needs.

Related Article: How Much Does Car Insurance Cost in Ontario?

Find the Best Car Insurance in Ontario with Marathon Insurance

Ontario car insurance can be pricey but by knowing what affects premiums and using cost-saving strategies you can save money while keeping coverage.

Rates are based on driving record, vehicle type, location and coverage level so drivers need to compare and shop around.

By working with us, drivers get access to multiple insurance companies, customized policies, and expert advice all in one place. Our dedicated customer support, digital policy management tools, and competitive pricing make it easier than ever to get the right coverage at the right price.

For Ontario drivers looking to save on car insurance without sacrificing coverage, Marathon Insurance is the go-to choice. Get a free quote today and let us help you find the best auto insurance for you.