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How car insurance coverage works in Toronto

Toronto is the most populated city in Canada and by extension has the most active drivers on the road. The average annual car insurance premium in Toronto is just shy of $1,900. Despite the 16 lane highways, the rage inducing commutes, and year-round road repair, Toronto is still relatively safe for driving. According to a 2013 report, Torontonians have the 2nd lowest auto accident fatality rate in North America. It’s important to note that despite its relatively safe roads auto insurance is still mandatory, and just like all other cities in Ontario, Toronto auto insurance is provided by the private market. The mandatory coverages for all Toronto drivers include: No-Fault Insurance, Third-Party Liability Insurance, Accident Benefits, Direction Compensation-Property Damage (DCPD), and Uninsured Motorist. Keep in mind you can always customize your policy with optional coverages, endorsements and limit increases.

Here is a complete overview of the available coverage options for Toronto drivers:

Coverage	Description
Public Insurance	Basic auto insurance coverage provided by the Provincial government. This generally includes liability, accident benefits and uninsured motorist coverage. Available: No Required: No
Private Insurance	Auto insurance policies created & sold by private insurance carriers. Though these carriers must still abide by Federal and Provincial regulations. Available: Yes Required: Yes
No-fault insurance	Having no-fault insurance doesn’t mean you can’t be found at fault. This coverage means you must first deal with your own insurance company for all claims, whether you’re at fault or not. But, Ontario will allow a no-fault driver to sue an at-fault driver for additional damages and costs that are not covered by their accident benefits. Available: Yes Required: Yes
Third-party Liability Insurance	Protects against damage caused by you while driving and includes injury and death to others and property damage. This is the only insurance coverage that is mandatory across Canada. Minimum coverage for Ontario is $200,000. Available: Yes Required: Yes
Accident Benefits	Covers your medical benefits if you’re injured in a crash, whether you’re at fault or not. The coverage includes your medical costs, while also paying for additional recovery costs, such as rehab, income replacement, and payment for and attendant care, if needed. Available: Yes Required: Yes
Direct Compensation-Property Damage (DCPD)	Covers damage to your vehicle and its contents, and for the loss of use of your vehicle when damaged – if another person was at fault. This coverage only applies if the crash occurs in a province where DCPD is mandatory, if two or more insured vehicles are involved, and if both insurers are licensed within that DCPD province. Available: Yes Required: Yes
Uninsured Motorist	Uninsured motorist coverage protects against injuries you and your family members sustain in a crash caused by an uninsured motorist. It can also cover your vehicle damages, if the uninsured driver is able to be identified. Available: Yes Required: Yes
Collision Insurance	Protects against damages sustained in a collision. This insurance covers you if your car is damaged in a crash – in both cases whether you crash into another other car or whether you crash into a stationary object. Available: Yes Required: No
Comprehensive Insurance	Protects against any losses a car owner may suffer, from events not related to driving. Such losses could include theft or damage from attempted theft; vandalism; environmental damage to a car from floods, fallen trees, and hail, etc. Available: Yes Required: No
Specified Perils	Covers your financial losses for damage caused specific perils – but only for perils chosen specifically for your policy. Available coverages are for theft; fire; damage from hail, lightning, wind, or flooding; earthquakes; explosions; riots; aircraft crash damage; and damage sustained during any transportation relocation. Available: Yes Required: No
All Perils	This combines the coverages you get with collision and comprehensive insurance. Additionally, all-perils also covers you if an employee, or someone who drives or services your car, steals it. It also covers you if someone you live with steals your vehicle. Available: Yes Required: No
Emergency roadside assistance	This service covers you for roadside callouts for emergencies such as dead batteries, towing, flat tires, keys locked in your car, empty gas tank, etcetera. Many insurance companies offer roadside assistance either included or in addition to other coverages. Available: Yes Required: No

*Table information sourced from http://www.ibc.ca (2017)

Factors that impact your Toronto car insurance rates

Toronto is home to the 4th largest population and the hosts the busiest stretch of highway (i.e. the 401) in North America. Toronto’s roads are busy with cyclists, busses, streetcars, and construction so you need to be on high alert when driving. Yield for buses, don’t pass streetcars with open doors, and drive slowly through endless construction zones. The ticket handed out the most often is for speeding. If ever in doubt, when driving on city streets keep it under 50 km per hour and you should be fine. All these conditions are just some of the decision criteria that are factored into an insurance calculation for Toronto drivers. Insurance companies also want to understand who you are as a driver, so they will look into your type of driver’s license and how long you’ve had it, your daily commute, as well as any at-fault collisions, traffic tickets or moving violations currently still on your record. Insurance calculations are complex, and no two companies use the same weighted criteria, but overall here are the factors that determine the rate you will receive from a Toronto car insurer.

Driver demographics

The age and sex of a driver are demographic factors that an insurance company will include in a car insurance risk calculation based on historical data. Statistics show young men under the age of 25 get into more car accidents than their female counterparts, so they have historically paid more for car insurance. Insurance is all about assessing risk based on data, so companies consider a number of general factors, including time spent driving, type of vehicle, number of accidents, and general driving behaviours. Sometimes factors like being married to a partner with a good driving record will actually reduce your rates.

Where you live

In general, people who live in cities pay more due to the increased risk of accidents, vandalism and theft. All in all, if you live close to major roads or any area with a higher population density, you will pay more - it raises the risk. For example, Brampton pays 65% more than the provincial average based on the amount claims are submitted in the area and the high volume of insurance fraud that occurs.

Vehicle type

Your insurer will determine your rate based on the year, make, model, and engine size. In fact, vehicles with high safety ratings often have lower insurance rates, while expensive cars and vehicles that are statistically considered to be a higher theft risks, will generally pay more. Lastly, how much it costs to replace or repair after a crash will also affect your car insurance premium.

Driving history

Not all accidents are treated the same, but an at-fault accident will raise your premium for up to 10 years. Driving convictions, such as speeding tickets, stay on your driving record for three years. Even though one speeding ticket may only increase your rates slightly, repeated offences will have a significant impact on the price you pay. Major automobile crimes resulting in court convictions (e.g. distracted driving) have a significant negative impact on your car insurance premiums and may even result in the cancellation of your policy.

Driving activity

The more you drive, the more you pay for car insurance. The length of your daily commute to work or the amount of distance driven annually will impact your premiums. The more you drive and the longer you driver daily will increase the price you pay for auto insurance. Cutting your mileage by using public transit or biking will help to reduce your car insurance.

Type of insurance coverage

Toronto drivers need to understand that there are a few mandatory coverage types, third-party liability, accident benefits, uninsured driver protection, and direct compensation property damage that are included in their policy. Optional coverages are also available and while they will increase your premiums they could save you a lot of money should the need arise. The most common additional coverage options are: comprehensive, collision, transportation replacement, and the removal of vehicle depreciation.

Applicable discounts

There’s lots of ways to save money on your car insurance in Toronto. Installing winter tires, bundling your auto insurance with your home insurance, and being a member of a union or an alumni organization can save you money. So, make sure to ask your insurance provider for ways to save!

How to get cheap car insurance in Toronto?

Shop and compare

Research which car insurance company provides the best value for you and your car. In Ontario, rates change four times a year, but lucky for you comparing rates with us is free.

Stay with your current insurer

Some auto insurance companies will give loyalty discounts to drivers who remain active with them for years. Especially if they add family members or multiple vehicles to their policy.

Bundle Your Policies

If you use the same insurance company for both your home and auto insurance, your insurer will often thank you with a discount on your premium.

Get a multi car discount

If you have multiple drivers and vehicles in the same household, by putting them all on one policy can save you money.

Increase your deductible

This is the portion you pay when settling a claim before your insurance provider will pay the rest. If you’re willing to double down on your deductible, it could save you money.

Ask about discounts

If you’re a member of an Ontario faction of CAA, a large corporation, union, or a school alumnus, it could help you get cheaper car insurance.

Pay premiums annually, instead of monthly

Paying monthly adds administrative costs to your insurer. If you can help them by paying one lump sum annually, they will thank you by lowering your premiums.

Maintain a good driving record

Be a safe driver, the insurance companies love it. Obey the rules of the road and drive according to road conditions, they look upon this fondly. If you, through these practices, can reduce your chances of an accident, you will pay less.

Install winter tires

You can save up to 5% simply by adding winter tires to your car. With winter driving conditions being so treacherous throughout Ontario it pays to be safe!

Keep track of your driving

There are telematics devices that collect driving data. With user-based insurance (UBI) you can earn your discounts if you’re not driving far or often. These devices even look at advanced stats like how carefully you brake and accelerate.

Take a course

Are you new to driving? A driver’s education course can save you money. Car insurance providers will think of you as a safe driver if you’ve received lessons by professionals.

Frequently Asked Questions about Toronto auto insurance

Where do I park in Toronto?

Toronto has a lot of temporary street parking available. You can get an overnight, a week long, or even a long-term street permit through the city’s website. Beware of cut curbs and driveways or you risk being towed away. “Green P” is the major parking provider in the city.

Do I need to yield to buses in Toronto?

Yes, a bus is big, and it can be difficult for the driver to see your vehicle behind it as it’s trying to merge. Toronto also prioritizes public transit as it’s typically carrying more people.

Do I need to yield to streetcars in Toronto?

You can only pass streetcars when they are moving. If a streetcar is stopped, they are likely opening their doors for commuters to get off and on. Beware, be cautious, and wait to pass when time permits.

The roads in Toronto are too congested. How else can I get around?

There are several ways of getting around the city from public transit (TTC busses, streetcars, and subways as well as GO transit). Toronto offers ridesharing services from both Lyft and Uber. There’s also plenty of taxi cab companies operating in Toronto including Beck Taxi and Co-Op Cabs. Finally, you can ride a bike with Toronto’s bike share program.

Do I need a licence to drive a Zipcar?

Yes, in order to operate any vehicle in Canada, whether its your own, a rental, or part of a car sharing service fleet, you must have a valid drivers licence.

Do I need personal insurance to drive a Zipcar?

No, you don’t need to have your own insurance policy to operate a Zipcar. Don’t worry Zipcar includes their own commercial auto insurance with your fees. Remember it’s illegal to operate a vehicle without car insurance in Canada.

What is the King Street Transit Pilot?

The pilot project launched in on November 17, 2017, and it was designed to improve transit reliability, speed and capacity between Bathurst Street and Jarvis Street. No public vehicles are allowed on this stretch of King Street, except for taxis between the hours of 10 pm and 5 am. The vehicles that are allowed are TTC, emergency, road maintenance and bicycles. You can review the full list of the rules here.

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