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If you own and drive a car in Canada, you know that auto insurance is a legal requirement, and you may also realize that it's only getting more expensive to insure a vehicle. With premiums on the rise, finding the right coverage at an affordable price has become a real challenge for many drivers. While there are a number of ways you can attempt to save, the best way to find your cheapest rate is to shop the market and compare car insurance quotes online. 

Discover how auto insurance premiums in Canada have increased over time.

The type of car insurance and the coverage requirements you're required to carry will differ from province to province. But no matter where you're situated, you'll have the option of customizing your policy with additional options. Here's a quick overview of the main coverages available to  Canadian drivers:

Auto insurance works differently depending on where you live in the country. In the table below, we break down the key differences in each province, including public vs. private systems and mandatory vs. optional coverages:

Here is a chart showing the average cost of auto insurance across Canada. While car insurance rates vary depending on a multitude of factors, this chart highlights how the average cost of car insurance differs from province to province. The data is taken from the Auto Insurance Rate Board 2025 Market and Trends mid-year report.

Some of the biggest misconceptions about auto insurance revolve around the factors that impact your quote. For instance, contrary to popular belief, red cars aren't any more expensive to insure than cars of other colours. 

While a number of external market factors do have an impact on insurance pricing models , insurance companies also consider many individualized factors when calculating your auto insurance rate. These go beyond the coverage selections, limits, and discounts on your policy. Here, we cover some of these factors – generally speaking, the more risk you present, the higher your premium will be:

For those wondering why their auto insurance premium keeps going up annually, despite the obvious reasons, such as purchasing a new car or getting into an at-fault accident, there are many factors outside of your control that contribute to the rising cost of auto insurance across Canada.

One of the biggest reasons for rising rates is inflation. As the cost of goods and services increases, so does the cost of insurance claims. For instance, vehicle repairs have become more expensive due to the rising costs of cars, materials, and labour. As claims become more costly for insurers to fulfill, these expenses are passed on to policyholders through rate hikes.

Additionally, other market factors that contribute to rising auto insurance costs include vehicle theft, insurance fraud, and natural disasters. As these incidents become more frequent, drivers will see the impact reflected in their coverage bills.

While some factors may be inevitable, there are still many steps you can take to lower your car insurance rate. Take control with these strategies to help ensure you’re getting the best deal possible:

While all auto insurance companies may look at the same factors when calculating your quote, each one has its own method of weighing the risk. Therefore, drivers with similar profiles often face varied rates, despite opting for policies with the same coverages and limits.

Below, we outline personalized quotes from five different Canadian insurers for a hypothetical driver profile. Note the variation in pricing among the insurers – if the driver goes with the cheapest option over the most expensive one, it would lead to over $1,000 in annual savings on each of the four policies.

Using Ratehub.ca is one of the best ways to explore the market. We make it simple to compare personalized quotes from Canada’s leading providers – here's how our auto insurance tool can help you:

Comparing quotes with us also offers many advantages over purchasing your coverage directly from an insurance company. Not only can you view your rates side-by-side, but our extensive partnerships with providers such as CAA Insurance, Economical Insurance, Gore Mutual and MAX Insurance allow us to match you with one that offers unique coverages and special discounts tailored to your needs. This way, you get a competitive price that’s customized to fit your specific situation.