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How car insurance in Toronto, Ontario works

Matt Hands, Sr. Business Unit Director

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.

Car insurance in Toronto, and across Ontario is a requirement for all drivers. To operate a vehicle in Toronto, you must have insurance. To get the best car insurance quotes in Toronto, it's vital to understand how it works.

Toronto operates in a no-fault insurance system. No-fault means drivers use their own insurance company regardless of who is at-fault in an accident. In other words, you only ever deal with your own insurance company for a claim or following an accident.

Ontario auto insurance is provided by private insurance carriers and is regulated by the Financial Services Regulatory Authority of Ontario (FSRAO). FSRAO ensures rate increases are substantiated. Simply put, an insurer can't raise rates without prior approval from the regulatory body and is based on their financial records.

Available Toronto car insurance coverage is broken down into two categories - mandatory and optional.

Mandatory Toronto auto insurance coverage includes:

Third-party liability
Accident benefits
Uninsured automobile insurance
Direct Compensation Property Damage (DCPD)

Optional Toronto car insurance coverage includes:

Collision insurance
Comprehensive car insurance
Specified perils
All perils

Also available in any city in Ontario are Optional Policy Change Forms (OPCF) which are coverage enhancements. Here are 4 common Ontario endorsements.

OPCF 20 - covers the cost of a rental vehicle while yours is being repaired or replaced
OPCF 27 - Ports your existing insurance to a rental car or car you borrow
OPCF 39 - Your insurer forgives your first accident claim so it doesn't impact your insurance rate
OPCF 43 - Removes depreciation in calculating the value of your car when settling a claim

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Mandatory coverage for auto insurance in Toronto

Mandatory insurance is mostly about protecting you from damage you may cause to others and their property. Protecting you personal car is available with optional coverages.

Third-party liability

Accident benefits

Uninsured motorist

Direct compensation property damage

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Optional coverage for auto insurance in Toronto

The below coverages are optional, unless you lease your car and your lessor requires them. Typically, new cars will get the optional coverages.

Collision insurance

Comprehensive

Emergency roadside assistance

Specified perils

All perils

How much is car insurance in Toronto?

The average cost of car insurance in Toronto is roughly $2,000 per year, or about $170 per month. Are you paying more? Could you be paying less? Let's find out.

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Car insurance companies in Toronto

If you're looking for cheap auto insurance in Toronto, you have to compare car insurance quotes from insurance companies in Toronto. Here are some of the best car insurance companies located right here in Toronto, in no particular order.

Company	Address	Phone
RH Insurance (Brokerage)	20 Queen St. W Suite 1101, Toronto, ON M5H 3R3	1-888-616-1868
Intact Insurance	700 University Ave., Toronto, ON M5G 0A1	416-341-1464
Aviva Canada	100 King St. W, Toronto, ON M5X 1E3	1-800-387-4518
CAA	106 Spadina Ave., Toronto ON M5V 2K4	416-664-2040
Economical	121 King St. W Suite 1400, Toronto, ON M5H 3T9	1-800-268-8801
Travelers Canada	165 University Ave., Toronto ON M5H 3B9	416-362-9918
Wawanesa Insurance	4110 Yonge St. Suite 100, North York, ON M2P 2B7	1-800-268-7300
RSA Canada	18 York St. Suite 800, Toronto, ON M5J 2T8	416-366-7511
SGI Canada	10 Four Seasons PI Suite 200, Toronto ON M9B 6H7	1-877-844-8460

Direct car insurance companies may be experts on car insurance products, but they don’t necessarily give you the best market price possible. By providing us with a few details, we can compare car insurance quotes from various auto insurance companies in Toronto, so you can select the cheapest option possible. We’ll also connect you with a licensed insurance broker to guide you through the entire process of obtaining the coverage you need.

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Factors that impact your Toronto car insurance rates

It pays to shop around to find cheap car insurance in Toronto. Even though an insurance application is fairly standard you will find that different insurance companies offer different rates based on their existing users, the number of active claims on their fiscal books, and overall risk tolerance calculations. Furthermore, there are several factors beyond your control that impact a risk tolerance calculation, like if you live in an area with higher than average levels of insurance fraud. Here are seven factors auto insurance companies consider before offering personal car insurance in Toronto:

Driver demographics

Where you live

Vehicle type

Driving history

Driving activity

Type of insurance coverage

Applicable discounts

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How to get cheap car insurance in Toronto

Shop and compare
Research which company provides cheap car insurance in Toronto, and also the best value for you and your vehicle. Rates may change up to four times a year, but lucky for you comparing Toronto car insurance with us is free.
Stay with your current insurer
Some Toronto 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 needs, your insurer will often thank you with a dip in premiums.
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
Your deductible is the portion you pay when settling a claim before your insurer will pay the rest. If you’re willing to double your deductible, it could save you money.
Ask about discounts
If you’re a member of a large corporation, union, or a school alumnus, it could help you get cheaper Toronto car insurance
Pay premiums annually, instead of monthly
Paying monthly adds administrative costs to your insurer, so if you’re able to pay in full annually you can lower your premiums.
Maintain a good driving record
If you’re a safe driver, obey the rules of the road and drive according to road conditions you can reduce your chances of an accident. Car crashes stay on your insurance record for up to ten years and can result in higher premiums.
Install winter tires
You can save up to 5% simply by adding winter tires to your car in Ontario

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FAQ

Frequently asked questions about car insurance in Toronto

Why is Toronto car insurance so expensive?

One of the most expensive cities in Ontario is car insurance in Toronto, especially in the suburbs. Suburban drivers require a car to get to most places due to a lack of transit beyond the central core. These suburbanites drive on bigger highways and more congested roads which contribute to higher premiums due to the associated rise in risk. In Brampton, a suburb just outside Toronto, there is a high volume of fraud and uninsured drivers which raises rates for everyone.

Which car has the cheapest insurance in Toronto?

The car you drive is one of many factors that go into your Toronto insurance quote. That said, inexpensive, used cars with good safety ratings and low rates of theft generally yield cheaper insurance costs. Minivans and SUVs can be cheaper than sedans because of their risk profile based on the typical drivers. In other words, experienced drivers who may have a family tend to drive more cautiously. Here is our list of the cheapest cars and the cost to insure them.

Do you need insurance to rent a car in Toronto?

Without insurance, you'll pay for rental car insurance from the rental car agency. To avoid paying those high fees, you can use an endorsement on your auto insurance coverage to port your existing insurance for use with the rental car. Be sure to check your credit card as it could cover a portion of the insurance. The most valuable of the 4 types of rental car coverage is liability (if you damage someone else's property) and personal accident insurance (if you're injured in a collision).

What are the best insurance companies in Toronto?

The best car insurance companies are typically reserved for big players like Aviva, CAA, and Intact. However, the real question is what is the best insurance company for you, and so it's helpful to compare insurance quotes and review their values. Onlia is a new player (backed by worldwide underwriters) with some cool perks like usage-based driving rewards. Compare car insurance quotes to see what company gives you the lowest car insurance rate in Toronto based on your unique profile.

Author Bio

Matt Hands, Business Director of Insurance

Matt started his professional career at CARPROOF where he honed his marketing and analytical skills for over 3 years. Matt then took his wealth of experience to Ratehub.ca’s Toronto offices, working with insurance providers, agents, and brokers to grow and expand the Insurance business unit. He is a thought leader in the community and a valuable insurance resource to respected publications like the Globe & Mail, Toronto Star, Huffington Post, Yahoo News, and 680 news radio in Toronto.

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