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5 Factors That Affect The Cost Of Car Insurance In Ontario

Whether you are a first-time driver or have years of experience, you should know that obtaining car insurance is required by law in Canada. Getting the right type of coverage will provide you with legal and financial protection in the event of a collision or other damage.

However, while purchasing car insurance is a simple enough idea, there are several factors that are taken into consideration that determine the overall cost of a certain policy.

 For example, the cost of car insurance in Ontario is among the highest in the country. To calculate how much is car insurance per month in Ontario, insurance providers consider different factors, some of which are within the driver’s control while others are not.

 In this post, we take a look at the five main factors that determine your premium and will help you get the best price for your policy.


One factor that affects the cost of car insurance in Ontario is your location. Although you can choose where you want to live in the province, you can’t control how insurance providers price certain areas. The rate for a particular car insurance plan may be higher or lower depending on whether you live in a major city like Toronto or a smaller town like Stratford.

Some companies will even look at traffic conviction and theft rates in the areas, which means if you live in a larger city, you will most likely pay a higher premium on your car insurance. 

Age and gender

Your age can also impact the rate of your car insurance. For example, if you are under 25, you are usually considered an inexperienced driver who is more likely to be involved in an accident. Because of this, you will have to pay a higher premium on your policy. As you get older and more experienced in driving, your premium will be lower.

Besides your age, your gender can also play a role in auto rates. In Ontario, women usually pay a lower premium because they are believed to be more responsible drivers than men who tend to drive more and are at a greater risk of getting into an accident.  

Driving experience

Probably the biggest factor that can influence the cost of your car insurance is your driving history. If you are a new driver, then you don’t have as much driving experience, so you should expect to pay a higher premium compared to people who have been driving for a long time. 

However, if you have years of driving experience, but you have traffic violations or have been involved in several car accidents, then that can also affect your car insurance rate. Most insurance companies consider such drivers high-risk and require them to pay a higher premium.

So, the rule of thumb you need to remember is the better and more responsible driver you are, the lower the premium you will pay for auto insurance. 

Vehicle usage, type, and age

How often you drive your vehicle or for what purpose can also affect your car insurance rate in Ontario. For example, if you use your car to generate a side income, like being an Uber driver, then you should know that the cost of your auto insurance will differ from those who use it for basic commuting, such as to run personal errands, travel, or go to and from the office.

Also, the type of vehicle you own and its age can have an impact on your premium. Usually, brand-new car models have lower insurance rates than vehicles that are a few years older. 

Customer loyalty

A factor many drivers overlook but can also influence the rate of their car insurance coverage is customer loyalty. Depending on the policy of your insurance company, you may benefit from a discount if you purchase multiple insurance products. 

For example, you can obtain both home and auto insurance from the same company to lower the amount of your premium. For this case, it is best that you consult with an insurance broker to see which coverages will be best for you, as well as how you can save from purchasing multiple insurance plans.


Final thoughts

Obtaining car insurance is required by law in Ontario. However, in order to get the best coverage for you, it is important to consider several factors first which will affect the overall cost of your premium, including location, age and gender, driving experience, and more. 

Refer to our guide to learn how to get the best coverage you need at the best rate. 

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