Car Insurance Rates Ontario – Free Calculator

Car insurance can be a very complex subject but the province of Ontario has a system that is pretty straightforward once you the basics.

Ontario has a No-Fault Insurance System. Although this sounds like a system in which no driver would be found at fault for causing an accident the term no-fault has to do with how the insurance claims are paid. Under the previous system, the insurance company of the driver who was found to be at fault for the accident would be held responsible for paying the claims of the parties involved and the at-fault driver’s liability would raise their rates. Under the no-fault system, each party’s insurance company pays their own claim immediately without waiting for the determination of fault. Once the fault has been determined then the at-fault driver would face an increase in rates from their insurer.

Ontario has a Private Insurance System. In Ontario, you have a large choice of private insurance companies to choose from when shopping insurance, so be sure to discuss with the agent or broker the basic legal insurance requirements. After meeting the basic legal requirement you have many options available to personalize your own auto insurance policy.

Mandatory Auto Insurance Requirements in Ontario

Car insurance is required for all vehicles in Ontario. Vehicle owners and drivers can face fines up to $50,000 for driving without coverage. Their licences can be suspended and vehicles impounded, so failure to comply has some potentially serious and immediate consequences. In addition, that driver may earn high-risk status for himself, which can cost thousands more annually for insurance, once his licence is reinstated.

Standard car insurance policies must contain the following:

  • Third-Party Liability Coverage: $200,000 of coverage is required by law, but most drivers opt to increase this amount to $1 million or more. This portion of your policy protects you against legal action up to the limit of the coverage, if you were at fault.
  • Statutory Accident Benefits Coverage: If you’re injured in an accident, this section pays for your care and rehabilitation, no matter who caused the accident. This too can be augmented by additional coverage.
  • Direct Compensation-Property Damage: If your car and its contents are lost or damaged due to an accident caused by someone else, and the accident meets certain conditions, you’ll be covered for those losses which will be paid by your own insurance company.
  • Uninsured Automobile Coverage: This portion protects you against injury and loss due to an accident with an uninsured driver, or resulting from a hit and run incident.

How Much Is Car Insurance in Ontario?

According to the Fraser Institute (“The Personal Cost and Affordability of Auto Insurance in Canada”, FraserInstitute (2011). The average person in Ontario can expect to pay $1,281 per year. Of course, there are many factors that determine what rate any individual will pay for insurance in Ontario.

Each insurance company will assess your location (where you drive), the car makes ande year, driving experience and driving history. Your age, as well as your gender, are also statistically relevant when it comes to determining your personal level of risk assessment.

There is good news, however. The Government of Ontario is working with the Insurance industry to reduce Ontario’s high insurance costs by reducing the instances of fraud and managing legislation looking at how insurance claims are paid out. Determining better construction and infrastructure routes to alleviate population and traffic density issues as well as ensuring better road repair .

According to the Ontario regulatory Commission for the insurance industry, The Financial Services Commission of Ontario, in the first quarter of 2016 average auto insurance rates were reduced by 3.07% and more than a dozen automobile insurance companies have been approved to lower their rates by 7% or more (on average individual rates and/or rate reductions will vary).

Why is Car Insurance Ontario so Expensive?

Ontario, at the moment, suffers the highest automobile insurance rates in Canada, almost 45% more than the next highest province, Alberta. Some drivers, of course, are hit harder than others when it comes to their rates and there is a multitude of reasons for that.

When it comes to insurance rates and premiums, Insurance companies have a very specific formula to draw on based on statistical information they gather from their own driver’s histories, claims, and driving profiles.  In Ontario you are also dealing with a private insurance system and each insurance company must develop its own rate based on all of this information and derived from the information in their own files as well as providing for a profit-based initiative for their investors and commissioned sales incentives for brokers and agents.

Ontario is troubled with insurance fraud as well as high population density (The more drivers that interact within proximity, the more likely a collision). These issues combined with infrastructure problems and a high percentage of uninsured and unlicensed drivers raises everyone’s risk and insurance costs.

Some extra legwork when shopping insurance can make a big difference, maintain a good driving record and ensure you’re driving a vehicle that is not too costly to insure.

Is Car Insurance Cheaper Outside Ontario?

The cost of insuring your car in Ontario is higher than every other Canadian province for several reasons, but most experts point to higher insurance fraud, rates of automobile thefts, the higher than average population density and traffic on Ontario roads and highways, strict regulations governing mandatory minimum liability and generous benefits awarded from accident claims.

Determining the cost of any individual’s insurance plan is a multi-faceted endeavor that must include the driver’s experience, their driving record, age, gender, where they drive, how the vehicle is used as well as how much coverage is chosen. The assessment of risk is then decided by the individual insurer and approved by the Financial Services Commission of Ontario.

A study on The Personal Cost and Affordability of Insurance in Canada – Private versus Public Provision was done in 2012 at The Fraser Institute in Vancouver. Comparing the average cost of personal auto insurance and found that the price differences between provinces were a large part due to insurance fraud, onerous regulation and generously prescribed benefits from claims and not from government monopoly or government regulated pricing as is usually the assumption. These findings were consistent with findings in previous years. https://www.fraserinstitute.org/tags/insurance-premiums.

How to Reduce Car Insurance Costs in Ontario

There are some very specific things you can do to ensure you are paying the lowest car insurance rates possible given your circumstances. Obviously, you can shop around for insurance companies and get different quotes BUT before you do that you will want to have a few things in order first.

– Make sure you are shopping the right kind of insurance coverage. Ask brokers and agents what the options are for coverage.

– Ask about combining insurance policies for a discount. If you have your home, rental, and car insurance with one company many insurers will provide discount rates.

– Ask if you can save by paying the entire year’s premiums up front.

– Are there employee discounts for the company you work with? (Ask your company personnel office or HR dept.)

– Maintain an excellent driving record. The best way to keep your rates low is to build an excellent driving history. This history is the biggest determining factor in the cost of your insurance.

Is the type of car you are driving impacting your rates negatively? Some vehicles are a higher risk than others, some have extra safety features (air bags, anti-lock brakes etc.) that make them a better option.

Maintain a Good Driving Record

To get the best car insurance rates, maintain a good driving record. Insurance companies determine your rate based on how many accidents you’ve been involved in and how many convictions you’ve had. If you’ve never been in an accident, and never had any convictions, then you are likely to get a very good rate on your car insurance.

Shop Around for the Best Quotes

Contrary to popular perception, not all insurance companies charge the same for a given coverage or driving profile. Rates vary widely from one company to another. That’s because all insurance companies have their own methodologies for assessing risk.

They consider factors such as where you live, which type of car you drive, for how long you’ve had a license and, as discussed earlier, your driving record, for determining your risk profile. So, the rates charged by each company can vary significantly for the same car and driver, even for the same level of coverage. So, shop around till you find rates that you like and are comfortable with.

There are over 30 companies that sell car insurance in Ontario. So visit their websites and ask for competitive quotes from as many companies as possible. There are a plenty of online resources you can use where you will find a comparison of the rates offered by various insurance companies.

Increase Your Deductible

A deductible is basically the amount you’re required to pay before the insurance provider covers the expenses related to a claim.  Paying a higher deductible is a great way to lower the premium on the car insurance. As long as you are okay with paying more on your own following a car accident, opting for a higher deductible is something that can be considered in order to get cheaper car insurance rates.

Opt for a Better Coverage

Talk to an insurance broker or agent about the type of coverage you really need for your car. For example, if you drive a 10 year old car, you would be better off opting out of a more expensive comprehensive coverage, which really adds to your premium.

Opt for a Less Expensive Car

Typically, if you have a new car, or a sports car, you will be required to pay higher premiums for your car insurance – as these cars are more likely to be stolen. If you have an older model or a family sedan, you probably won’t be charged as much by the insurance company.

Ask for Discounts

Many insurance companies offer discounts on car insurance. You can avail of these discounts by installing special anti-theft systems on the car such as dashcams, maintaining an excellent driving record and getting all your insurance needs covered by the same insurer.

Join an Advanced Driver Training Course

It really helps to take an advanced driver training course from an accredited driving school, as not only does it help you become a better driver, but it qualifies you for excellent discounts on your car insurance.

Does My Ontario Car Insurance Cover Rentals?

You will want to protect yourself when renting an automobile and make sure that you have the proper automobile insurance coverage. There are a few options and choices you will have to make to find what is most suitable for your needs in this circumstance.

Many car rental companies provide a type of insurance coverage called a “collision damage waiver’ or a “loss damage waiver” at an added rate. This may cover some loss or damage to the rental car. Be aware that this type of coverage may have exclusions and variations, be diligent in researching what it is you are buying.

Alternatives available include coverage via your Credit Cards, Club Cards (Costco, CAA). This option may be subject to conditions that you book the rental car through the club or agency and or use the credit card to pay for the entire rental purchase. Make sure you check with these companies to meet any conditions they require.

There is also the possibility of being insured under your current car insurance provider’s policy. If your Auto insurance policy provides insurance for “legal Liability for Damage to Non-Owned Automobiles” (or the Rental Car endorsement” or “OPCF 27”) You are covered for driving non-owned automobiles in Canada and the US (International vehicles would be provided separately). Check with your insurance agent.

There are many ways you can customize your car insurance coverage in Ontario. Mandatory coverage limits can be increased and additional coverage can be purchased to protect against loss or damage to your vehicle; collision and comprehensive sections. Other policy endorsements, called Ontario Policy Change Forms or OPCFs, can also be added for a variety of purposes, allowing for specific coverage to nearly any insurance situation.

Before Buying a Car: What to Know About Insurance

Buying a car is both a big investment and an exciting time for many drivers. In Canada, in every province and territory, auto insurance is part of the purchase process, so understanding what’s required and what protection is offered is important for an informed decision and adequate coverage.

While procedures vary slightly in each location, the overall process remains similar. All vehicles must have insurance, anywhere in Canada, to legally drive the roads, though minimum standards change from province to province. The important part of a car insurance policy for legal status is liability coverage.

Third Party Liability Insurance for Cars

The chief concern of provincial governments is that innocent parties have protection against injury and loss caused by a driver. Minimum provincial requirements all include an amount for third party liability coverage. The most common amount is $200,000, though in Quebec it’s only $50,000. Since this is inadequate to cover settlements for serious accidents, the de facto standard is typically $1 million in liability coverage, a balance between protection and insurance costs. Most drivers opt for this amount.

Accident Benefits Coverage

Injuries caused by auto accidents are generally treated under a provincial health care program, but often accidents lead to lost earnings, costs beyond provincially covered services and in some cases death and survivor benefits. For this reason, accident benefits coverage is also a standard that provinces include. Again, how this section applies changes between provinces. For instance, recent changes in Ontario reduced basic benefits, but top-up coverage may be purchased for drivers who feel this is important.

Other Mandatory Coverage

Provinces, such as Ontario, that have a mix of tort and no-fault features in their auto insurance programs, may have a section outlining direct compensation benefits. These are settlements paid by the driver’s own insurance company, regardless of which driver causes the accident. In most cases, certain conditions surrounding the accident must be met.

Uninsured, underinsured and unidentified driver coverage prevents someone from experiencing loss in the case that the at-fault driver has no insurance or inadequate coverage. Hit and run accidents, where a driver leaves the scene, is also provided for under this mandatory section.

Optional Ontario Car Insurance Coverages

Though these are important to most drivers, collision and comprehensive insurance coverage isn’t required by local governments as a legal requirement to use public roads. Any driver willing to absorb all costs after an incident could cancel these parts of their policy. Most drivers, however, choose to carry this protection to avoid the financial burden in the aftermath of an accident.

When car purchases involve financing, the loaning agency may require collision and/or comprehensive coverage to protect the investment they have in the vehicle. Similarly, when a driver opts to lease a car, that vehicle remains owned by the leasing agent, so that company’s name is listed as the owner on a car insurance policy, although it’s the driver’s responsibility to acquire the policy in accordance with the lease agreement.

When and Why Did Car Insurance Become Mandatory in Ontario?

The primary reason for mandatory car insurance is the protection of innocent parties from injury, damage or loss due to the actions of a motor vehicle driver. This concept is called “third party liability” in auto insurance terms, and this is the chief protection offered by the basic protection required to register and license a car in the province.

Origins of Auto Insurance

As gas-powered cars came into the mainstream in North America, governments both federal and local noticed that the risks of vehicles and driving weren’t limited to drivers and occupants. Other vehicles, occupants and vehicles could be hit, through no action or fault of their own. Pedestrians faced increasing hazard when sharing roads with these ever-faster vehicles, which could now do significant damage to property in collisions as well.

Requirements for basic protection for these innocent parties got assigned to state and provincial governments. Across North America, the general pattern for the auto insurance policy emerged, starting around 1927 and quickly spreading throughout the continent.

Mandatory Ontario Car Insurance Today

The statutory policy that the government of Ontario requires on all vehicles using public roads today covers four sections and the emphasis remains on protection of innocent parties, but also includes provisions designed to assure prompt treatment of injuries and recovery from an accident or insurable incident.

Third party liability remains part of required coverage. The basic amount is no longer sufficient to cover more serious accident settlements, but this hasn’t been an effective problem, since a de facto minimum of $1 million has been in place for several decades. While not required, most motorists feel more comfortable with this level of coverage.

Accident benefit coverage provides protection for health care amounts beyond those covered by OHIP, including rehabilitation costs. This section may also cover loss of income and other extended care costs. In June 2016, basic accident benefits were cut back by the Ontario government to lower the cost of mandatory coverage. Motorists can now purchase additional insurance to bring this coverage back to the pre-2016 level.

As with all provinces in Canada, Ontario’s auto insurance program includes some no-fault provisions. In the statutory package, this is supported by the direct compensation-property damage section. These are claims benefits paid by the driver’s own insurer on a no-fault basis in certain accident circumstances.

Uninsured/unidentified driver coverage protects the policy holder against incidents arising from a collision with an uninsured driver, or in the case of a hit and run accident, where the other party leaves the scene of an accident.

Penalties for No Auto Insurance in Ontario

Driving without insurance is a serious offense anywhere in Canada. In fact, it’s a series of serious offenses, since, without insurance, a car cannot be legally licensed. Both the car’s owner and driver (if they aren’t the same person) could be liable for fines for driving without insurance. These fines range from $5,000 to $50,000 and may be accompanied by license suspensions and vehicle impoundment.

Resources

http://business.financialpost.com/fp-comment/terence-corcoran-why-ontarios-auto-insurance-system-is-a-car-wreck

https://www.ratelab.ca/insurance/car/ontario/

https://en.wikipedia.org/wiki/Public_auto_insurance

https://www.fsco.gov.on.ca/en/auto/brochures/pages/brochure_autoins.aspx

http://www.ibc.ca/on/auto/auto-insurance/reforms

 

2018-09-16T19:15:15+00:00