Car insurance is a type of insurance that provides financial protection against any damage to your vehicle. Although some states make car insurance mandatory, it is, however, beneficial to you and also to others to have your car insured even if it is not mandated in your state.
The cost of car insurance in Ontario is averagely around $1,634 per year, approximately $136 per month with most car owners paying an average of $1,528 to $1,980. However, some car owners pay as high as $2,400 per year while some pay as low as $1,000 per year. These variations are due to many factors including age, gender, driving history, and even location.
Car insurance is an agreement in which the insurer accepts the risk of any loss incurred by the owner or driver of the car as a result of property or person damage as a result of an accident. Typical car insurance usually covers;
- Body injury liability – this refers to the cost of treatment of injuries and even the funeral cost of you and anyone listed as a policyholder.
- Medical payment or personal injury protection – this refers to the cost of treatment of injuries and even the funeral cost of the other party involved in the damage you caused.
- Property damage liability – this refers to the damage you may cause to someone else’s property including a car, fences building, etc.
- Collision – this refers to damage that involves your car colliding with another car, trees, poles, or potholes.
- Uninsured and underinsured motorist coverage – this is a type of damage that involves a driver who doesn’t have sufficient insurance to pay for your loss or you are a victim of a hit-and-run driver.
- Comprehensive coverage – this includes damages from fire, falling objects, earthquakes, wind storms, vandalism, hail, flood, missiles, explosion, etc.
How Much is Car Insurance In Ontario?
The cost of car insurance in Ontario is the second most expensive in Canada with only car owners in British Columbia paying higher.
The Ontario law requires that all car owners have auto insurance otherwise you will be fined an amount ranging from $5,000 – $50,000 if you are found driving without valid auto insurance.
Car insurance is compulsory in Ontario and the average cost range is between $1,300 and $1800. Rates are higher or lower depending on;
1. Your Car: The price you will pay for car insurance is determined by your car’s make, model, and year. The type of car you have determines the worth of your insurance, safety features, and the cost of damage repair.
2. Your Age: Car owners between the age of 18-25 pay higher rates for car insurance because they are usually more likely to be involved in accidents than older car owners. So, the older you are, the lower your rates.
3. Your Gender: The average cost of car insurance for men in Ontario is about $1,968 while women pay about $1,836 and this is because, over time, men have been considered to be involved in more accidents and have more careless driving behaviors than women.
4. Your Driving Experience: New and less experienced drivers pay about the highest cost for car insurance in Ontario. A driver with a G1 license will pay more than a driver with a G2 or a G license.
5. Your Driving History: In Ontario, drivers with a clean driving record pay about $1,812 per annum for car insurance whereas those with more than two violations in the last three years or a license suspension in the previous six years pay about $3,252, which is nearly double the cost of those with a clean record.
6. Your Location: The cost of car insurance you will pay is also influenced by your location. If you are in Brampton, you could pay about $2,400 per year whereas if you are a car owner in Kingston or Belleville, your average car insurance cost will be around $1,000 per year.
7. Your Insurance Provider and Policy: Different insurance companies have different policies, plans, and options available. Some companies have plans higher than others. Some companies also offer discounts and special rates to long time users
Even though the Ontario government has promised to bring insurance rates under control, they are still rising. There are however several reasons for this, but the most important is that Ontario has;
- One of the highest population density
- Dangerous roads
- High prevalence of vehicle theft
- Enough room for insurance fraud, as well as a high level of claim payouts
Requirements for car insurance in Ontario
- You must be at least 16 years old
- Your driver’s license
- Your vehicle type, model and year, and vehicle registration details
- Traffic violations within the last three years (excluding parking tickets)
- Previous claims files within the last eight years
- Current insurance company, broker, or agent and their policy number
- You must meet the minimum car insurance requirements regulated by the Financial Services Commission of Ontario (FSCO)
Where Can I purchase car insurance in Ontario?
There are various options available to you. Car insurance in Ontario can be purchased from a licensed insurance broker, agent or direct writer.
Insurance brokers provide insurance on behalf of a variety of different insurance firms and will shop around for the best deal available. You also have the right to request that your broker gives you the names of all the companies that he or she represents.
Insurance agents are representatives of a particular insurance company. Although, they represent the company, insurance agents help customers select the right insurance available for them.
Direct writers are insurance businesses that offer their own insurance products to customers directly.
How to reduce car insurance costs in Ontario?
- Bundle your policies
- Take advantage of discounts e.g. winter tire discount, safe driving discount, private parking discount, retiree discount, etc.
- Adjust your payment
- Review your existing policy
- Downsize your vehicle
- Improve your credit rating
- Ditch unnecessary coverage and reduce coverage for older cars
- Be a safe driver and drive shorter distances
- Take a defensive driving course (this helps to increase your chances of being eligible for discounts)
- Ask for higher deductibles
- Install an anti-theft device
- Adjust coverage for seasonal vehicles
- Consider the rate of car insurance before moving to a new location
- Choose better parking spots
- Be a loyal customer