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Why Is Ontario Car Insurance so Expensive Relative to Other Provinces?

Expensive Ontario auto insurance

Update February 2020: Car insurance rates in Ontario are on the rise again – click here to learn more.

When you’re on the lookout for cheap auto insurance (and who isn’t, right?) it can be frustrating to know that our province, Ontario, has some of the most expensive insurance rates in the whole country.

As the CBC reported, the average rate for auto insurance in Ontario is $1,700 per year. And it is expected that rates will continue to go up. Why is this?

Why car insurance rates are higher in Ontario

One of the main reasons cited for the higher rates here in our province is the fact that there is a prevalence of insurance fraud. According to the Ontario Ministry of Finance, auto insurance fraud costs Ontario consumers $1.3 billion a year.

Insurers in Ontario also face high claims settlement costs, which is reflected in the rates we pay. To address the fact that claims are more costly to process and thus drive up the rates of coverage in our province, this article in the Huffington Post suggests that the whole system needs to be reviewed and streamlined. And to tackle fraud? More of a government focus on investigating insurance fraud crimes and enforcing laws.

Another article on TVA highlights how a claims system that focuses on cash settlement, as it does here in Ontario, drives up rates. This article also highlights how increased government involvement, covering things such as medical costs as they do in Quebec, helps to lower rates.

For more, read the full articles:

~ Ontarians Pay Too Much For Auto Insurance, And Here’s Why

Ontario drivers pay too much for car insurance, and the only answer is more government

How much more expensive is it really?

According to the Insurance Bureau of Canada (IBC), in Ontario we have auto insurance rates that are 45% higher than what they pay in Alberta and 2x as expensive as rates in the Maritimes.

This whole car insurance rate issue is a definite sore spot across the province. As the aforementioned CBC article shared, it could become a campaign issue in the upcoming provincial election, with the NDP and the Conservatives already addressing the high rates of auto insurance and how government must step in to lower premiums. Should be interesting to see how this all plays out.

In the meantime, if you’re looking for cheap auto insurance in Ontario, check out this resource with helpful tips for cutting costs: 10 Ways You Can Get Cheaper Car Insurance Rates

And if you’re ready to get a quote, zip over here or just get in touch with one of our team members directly. We’re always here to help!

 

car insurance Ontario Click for an Ontario car insurance quote or call us at 1-855-237-2905

Image source: FreeDigitalPhotos.net | fantasista

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