Brampton is notorious for being the city with the highest average insurance costs in the province of Ontario, which has the dubious honour of having the highest car insurance costs in the country. A number of factors conspire to give Brampton this distinction. Two big contributors are the accident rate for the area and crime rates overall, but in particular, auto theft. But what makes the biggest difference over Mississauga and other Greater Toronto Area municipalities is the average costs per insurance claim. Statistics show that it costs nearly twice as much, on average, to settle a car insurance claim in Brampton than it does in Ontario in general.

Car Insurance Fraud

Car insurance fraud in the GTA is thought to be rampant, costing insurance companies and Ontario motorists over $1.3 billion annually, according to the province’s Auditor General. Spokespeople from the Insurance Bureau of Canada call Toronto the Staged Collision Capital of Canada. There are several common collision types that are done deliberately, or staged, for the express purpose of making fraudulent insurance claims.

This type of criminal activity has been on the rise in Brampton, not only the accidents themselves, but other businesses involved in fraud rings, such as rehabilitation clinics, towing operators and car service centres, each of whom bill for services that never happened or pad expenses billed back to insurers. Peel Regional Police suspect that American insurance fraud gangs have brought their business to this side of the border after crackdowns in the States.

Why Mississauga is Different

Population growth in Brampton contributes to legitimate traffic concerns too. Area streets are more crowded with vehicles. The increased congestion naturally means more accidents will occur over time. Yet Mississauga, a similar Toronto satellite community, has an average car insurance rate that’s 18 percent less than Brampton’s. Mississauga is still 26 percent over the provincial average, however. It’s still about $400 a year difference, just for living in a slightly different postal code.

It’s about 45 km from Brampton to downtown Toronto, while only 28 km between Mississauga and the city centre. Since both suburbs serve as bedroom communities for commuters working in the city, the Brampton resident who works alongside a Mississauga counterpart in the same Bay Street office will have substantially different drives if they take their cars to work. That fact alone, the daily drive to and from work, increases insurance even when all else is equal.

As an outlying member of the GTA, Brampton’s development is more recent than Mississauga’s. All manner of infrastructure development is farther behind, and this could contribute to driving safety. Public perception is that crime overall is a problem, however statistics don’t back that up, generally speaking. Peel Region has been noted at 30 percent below the national average in car theft as recently as 2010, but this includes Brampton and Mississauga in the same statistic.

Insurance companies are free, in the highly regulated Ontario market, to use their own methods to determine the risks and therefore the rates of insurance for each component of underwriting, as long as these methods are approved under those regulations. Until claims rate averages for Brampton drop, residents will likely continue to pay higher rates.