Car Insurance in Toronto

Toronto, Ontario – it’s Canada’s largest city, and with its size come extra-large challenges for drivers thanks to its vast network of roadways. Whether you’re stuck in traffic on the Don Valley Parkway, parked on a tree-lined avenue, or sharing the road with pedestrians and cyclists downtown, you need to be ready for anything. Knowing how car insurance works in Toronto prepares you for the risks that come with owning a car in Ontario’s biggest urban centre, and can help you find the cheapest insurance rates, too. Here’s what you should know about car insurance in Toronto so you can feel confident navigating the busy streets of the Six.

The basics of car insurance in Toronto

How does car insurance work in Toronto?

Toronto follows the same rules for car insurance as the rest of Ontario, which means you can’t legally own and drive a vehicle without car insurance. Some coverages are required by Ontario law (like accident benefits and liability) and others (like collision and comprehensive) are optional. What you choose will depend on what you need.

Three more basic facts to know about car insurance in Toronto (and Ontario):

  • It’s regulated. Insurance companies in Toronto are regulated by the FSRA. They make sure an insurer can't raise auto insurance rates in Toronto without approval from their regulatory body.
  • It’s private. Toronto drivers buy their insurance from private companies, just like everywhere else in Ontario and certain other provinces. Insurers compete for your business, so it’s up to you to choose which company works best for you by comparing who has the best service, the best coverage – and of course, the best rates!
  • It’s no-fault. Auto insurance in Ontario works under a no-fault system if you have Direct Compensation Property Damage (DCPD) coverage. This term can sound confusing, but the concept is pretty simple: drivers always submit claims directly through their own insurance company, no matter who’s at fault in an accident or incident.

    Heads up! As of January 1, 2024, Ontario car insurance policyholders can opt out of coverage for Direct Compensation Property Damage (DCPD). It was previously mandatory.

How do you get a Toronto car insurance quote?

Getting car insurance quotes in Toronto doesn’t have to be complicated. In this digital age, the fastest and easiest way to get a car insurance quote is to do it online. Some insurers even allow you to purchase right through their website – no phone call necessary! Of course, you can still call most companies directly to get a quote estimate, or use an aggregator. If your car insurance needs are more complex (like if you have other vehicles such as ATVs, snowmobiles, or RVs) you can also call an auto insurance broker located in Toronto. However you choose to get your quote, the process can be broken down into three easy steps.

  1. Research auto insurance companies
    This might take a bit of time, but it’s worth it. Researching car insurance companies will help you find the best and cheapest auto insurance in Toronto that works for you. Investigate each company’s claims process and review their customer service. You can also visit Trustpilot to read customer reviews.
  2. Collect the information you need to quote
    You’ll need to provide personal details about yourself, your car, and all additional drivers in your household. If you’re doing more than one quote, you’ll want to make sure you’re consistent with the information so you know you’re comparing apples to apples.
  3. Quote and compare
    On average, Torontonians only get 2 competitive quotes when shopping around for auto insurance.1 But with all the choices that are out there, our best tip is to get auto quotes from more than just two insurers. By doing a car insurance comparison with several different companies you’ll find the best car insurance in Toronto.

Tip: Want to get all the details on quoting for auto insurance? Check out our How-to guide to car insurance quotes.

The cost of car insurance in Toronto and what affects it

Whether you live north of the city or right in downtown Toronto, Ontario insurers calculate your premium based on individual factors about you and your car. These include your age, your location, your driving record and claims history, the car you drive, and how much you drive it. Rates also vary based on what insurance provider you’re with.

That said, Toronto drivers face unique challenges that affect car insurance premiums. The average cost of car insurance in Toronto and the GTA is higher than in other urban centres in Ontario, simply because there are more risks involved with driving in the city. And where you live within the city has a huge impact on your Toronto car insurance rates.

How do postal codes affect Toronto car insurance rates?

Like home insurance, the area you live in plays a big part in how risky it is for an insurance company to insure your car. Insurance companies will factor location-specific risks and past claims into your premium to help predict the likelihood of future losses – even if these things are beyond your control.

Here are some of the region-specific risks that can affect your insurance costs:

  • Local traffic patterns. Toronto traffic is notoriously congested. If you live near a busy intersection or in an area with heavy traffic, there will probably be more car accidents and as a result a higher number of claims. This means higher premiums for Toronto car owners who live in these locations.
  • Crime. Whether it’s car theft, vandalism or fraud, neigbourhoods with a high crime rate will have higher car insurance premiums. (Don’t worry, we’ll talk more about crime in Toronto later on.)
  • Weather. Serious weather events are on the rise in Toronto, especially windstorms. Vehicles insured in Toronto are 27% more likely to have claims associated with a windstorm relative to the rest of Ontario.2 If trees fall down and damage a bunch of cars in your neighbourhood, there will be car insurance claims – and this will show in higher insurance prices for you and your neighbours.
  • Your commute. Rush hour in Toronto can be brutal. And, the risk of getting into a car accident is way higher if you have a daily commute. Insurers require you to disclose your daily commute (and yearly kilometres driven) so they understand the risk they’re taking to insure your vehicle. The more you drive on the daily, the more you’ll pay for your auto insurance.

Did you know? Those multi-vehicle pile-ups you hear about on the news happen more in Toronto than elsewhere in Ontario. Insured Toronto drivers are actually 21% more likely to be involved in a chain reaction accident claim (involving 2 or more vehicles) compared to the rest of the province.3 Make sure you have enough collision, accident benefits, and liability coverage to protect you if you’re involved in a chain reaction accident.

  • Your parking situation. Toronto’s stickered street parking exposes your car to a lot more risks than if it’s tucked safely away in a private garage! Think theft or vandalism, or a tree branch falling on it after a storm. And, vehicles insured in Toronto are 31% more likely to be involved in a hit and run while parked relative to the rest of Ontario!4 More claims in your area mean higher insurance costs for you and your neighbours. (To protect yourself, it’s still a good idea to have comprehensive coverage if you keep your car parked outside of a secure garage.)

The cost of Toronto car insurance for new drivers

It’s tricky to give an exact calculation for car insurance by age because of all the individual factors involved. Young drivers getting first time car insurance (and students) often have less driving experience and are statistically more likely to get into a car accident. Avoid accidents and traffic tickets by driving safely, and over the next few years and you should see your insurance rates go down.

The cost of Toronto car insurance for newcomers

Toronto is a top destination for new immigrants – it’s vibrant, multicultural, and has first-rate universities. For those considering getting a car, it’s important to know that the average cost of car insurance for newcomers to Toronto is generally higher than average since they lack Canadian driving experience. Some insurance companies might accept prior driving history from another country or another province, with the proper documentation. This can help lower costs. The best way for newcomers to get the cheapest car insurance in Toronto is to shop around for the best rates, and ask insurers if they’ll take international history into account.

Auto theft in Toronto and how it impacts your car insurance

Imagine leaving your house in the morning only to find that your car has disappeared from where it was parked the night before. It’s every car owner’s nightmare, but if you live in Toronto the chances of this happening to you are higher than you might think. In recent years, there’s been a major surge in car theft and carjackings in Toronto and the GTA. In fact, insured drivers in Toronto are 40% more likely to file a claim for a stolen vehicle vs. drivers in the rest of Ontario!5

It’s no surprise, then, to hear that Toronto drivers are paying the price with higher car insurance premiums. Look at it this way – when there’s an increased risk of something bad happening to your car, that cost needs to be accounted for by insurers. And if you live in an area that has a high crime rate when it comes to stolen cars, you’ll be paying more for your car insurance since there are more claims for car theft in your area.

So what do you do if you live in a Toronto neighbourhood with a lot of car theft? It doesn’t make sense to pack up and move just to save some money on your car insurance. It’s best to be proactive by learning how to prevent your car or its parts from being stolen, and what you can do if you’re the victim of carjackers.

With auto theft on the rise, it’s also important to know that basic car insurance policies don’t provide coverage for theft. For that you’ll need to add Comprehensive or All Perils to your policy. Either of these coverages can help replace a stolen vehicle. They can also replace parts of a vehicle that are stolen or damaged (like a catalytic converter), and even help repair damages to your car resulting from theft or break-ins.

Heads up! Car insurance won’t cover personal items that are stolen from your vehicle, like a laptop or camera. Your home, tenant, or condo insurance does (if you have it).

What is the best car to own for more affordable car insurance in Toronto?

When you’re on the hunt for an affordable car, you shouldn’t just look at the sticker price. It’s important to think about future expenses so you have a clear picture of how much your car will cost in the long run. That’s why insurance should play a role in the type of car you should buy. If you want to get the best – and lowest – car insurance in Toronto, there are several factors about the car itself to consider beforehand.

  • The make and model. Whether you drive a sedan, SUV, truck, hybrid, van, or luxury or compact car will affect how much you pay for insurance.
  • Repairs and replacement cost. If you have a car that’s expensive to repair, you’ll be paying more for your insurance. Repair costs are higher, and so is the amount to replace the vehicle if it’s damaged past repairability or if repairs exceed the value of the car. Some features that impact repair cost are special paint, graphics, leather interior, heated seats, faux wood surfaces, and new technology. Make sure you know about other car features that could affect your insurance costs.
  • Vehicle ratings. See how cars measure up when it comes to collision, comprehensive, DCPD and accident benefits claims. Cars that have lower vehicle ratings are generally cheaper to insure. The Insurance Bureau of Canada updates their lists yearly, which makes it easier for you to do your research.
  • Likelihood of theft and crime to your car. Car thieves in Toronto tend to target certain types of vehicles – especially luxury cars. If you drive a car that’s statistically more likely to be stolen, insurance companies may charge you higher car insurance rates so they can offset those claims. If you’re shopping around for a new car but want to lower your car insurance price, check out a list of the most stolen vehicles – and maybe go for a different model.

Top 5 vehicles for cheap insurance in Toronto6

These car brands could be a good choice for lower car insurance payments if you live in Toronto:7

  1. Subaru
  2. Mazda
  3. Toyota
  4. Kia
  5. Chevrolet

Used cars vs. new cars in Toronto – which has the cheapest car insurance?

We might be stating the obvious here, but older cars are typically cheaper to insure simply because they cost less to replace. On the other hand, with a new car you could potentially save money in the long run since you likely shouldn't have to worry about any major issues for the first few years. For the most part, though, a new car is going to be more expensive to insure, just because it’s worth more now. Damage or theft means it’ll cost your insurer more to fix or replace it – it’s as easy as that. It’s up to you to decide if you want to buy a used or new car based on what you’re quoted for insurance, and how much you can afford to pay.

Did you know? Classic car insurance is different from insurance for a regular used car. Many insurers won’t cover classic and antique cars. Their safety features might not be up to current standards, but there are insurers that specialize In this type of vehicle. If you do need a company that will cover your classic car, it could cost more than usual to insure since their parts could be hard to find (and more expensive) if they need to be repaired or replaced.

Other ways to get the cheapest car insurance in Toronto for you

Everyone knows that it’s not cheap to live in Toronto. That’s why you should try to cut costs wherever you can – and it is possible to save more per month on your car insurance if you know where to look for savings! To get the lowest car insurance rates in Toronto for you, there are a few things you can do:

  • Bundle with your home insurance. Bundling your home and auto insurance together with one insurance company can get you a discount. Plus, it makes keeping track of your payments even easier.
  • Take advantage of multi-vehicle savings. You could save by insuring all your cars under the same car insurance policy.
  • Consider other ways to get around. If you drive to work, insurers require you to provide your daily commuting kilometres. Walking, biking or taking the TTC or other types of transit can reduce your premium since you’ll be driving less – just make sure you let your insurer know that your driving habits have changed!
  • Stay claims free for nine years and ticket free for three. It’s simple – no tickets or accidents equals more money in your pocket.
  • See if there are group and association or professional discounts. Whether it’s through your employer, union, association, or university, you could qualify for exclusive savings on your auto, home, tenant, and condo insurance.
  • Monitor your coverage. Review and update your coverages regularly to make sure you’re not paying for anything you don’t need.
  • Check for vehicle partnerships. Some insurers pair with car brands to offer discounts if you drive one of their vehicles. Look for these partnerships under the special savings section on their websites.
  • Opt for usage-based insurance. With this new way of doing insurance, you can save money if you don’t drive much and you’ll be rewarded for driving safely! For downtown dwellers who take the TTC to work, this could be a more affordable option than traditional insurance.
  • Look for other applicable discounts. Make sure you change your tires when you should so you get Ontario's winter tire discount. And, look for a senior’s discount if you’re eligible.

Getting Uber insurance in Toronto

The gig economy is everywhere in Toronto and the GTA. These days, you can’t leave the house without seeing an Uber sticker in the window of at least one car! Some car owners looking to make a few extra bucks are taking on work as drivers for Uber, UberEats, or other ridesharing and food delivery services. What many don’t know is that these side hustles can affect your car insurance.

Does your personal vehicle insurance cover Uber insurance in Toronto?

No, it usually doesn’t. Most auto insurance companies in Toronto don’t cover carrying passengers for hire and making deliveries for services like Uber and UberEats.

You’re responsible for informing your broker or insurance provider that you’re using your car for ridesharing or delivery activities. This way, they can make sure you have the car insurance you need before you get behind the wheel. If you get into a collision while driving for business or commercial reasons that you haven’t disclosed – and aren’t covered for by your policy – there could be some serious consequences. Your policy could be cancelled. And, you’d be responsible for paying for any costs out of pocket. These costs include damage to your car or someone else’s, or an injured party’s medical bills. You could also have trouble getting insurance in the future.

What car insurance do you need if you’re using your car for a ridesharing or delivery service?

Most auto insurers in Toronto will require you to have commercial car insurance. There are also some car insurance companies in Toronto that provide insurance for Uber drivers. Uber does have their own minimal commercial insurance for drivers when you sign up. But, that doesn’t mean your personal policy will allow this type of use.

The bottom line? Call your insurer to find out if you’re covered or not before you start your pickups and drop-offs.

Did you know? Renting your car to others using a car sharing service isn’t usually covered under most personal policies, either. If you’re using a service like Turo to rent out your car, make sure you’re fully covered.

Car insurance fraud in Toronto and how it costs you money

Like auto theft, car insurance fraud costs insured Ontario drivers a lot of money – around $1.6 billion in additional premium every year.8 And Toronto is a hub for insurance scams of all kinds. The fact is, there are more opportunities for fraud in Toronto. Newcomers to the city are easy targets of insurance seller fraud. And, it’s easy to fall for a tow truck scam when you’re stressed out after an accident.

Some fraudsters create situations to defraud an insurance company. Other drivers just try to “fool the system” to make a few extra bucks from a claim. The good news is, you can be part of the solution by staying informed. Know how to recognize auto insurance fraud before it happens to you.

The biggest takeaway for Toronto car owners? Many of the reasons why your car insurance is so costly – like postal codes – are simply beyond your control. Being a cautious driver and doing your best to keep your car safe and secure are the easiest ways to keep your insurance price low.

1 Source: Sklar Wilton, Sonnet Consumer Segmentation and Brand Growth Study, 2021
2 Source: Sonnet book of business and Sonnet website data (2022)
3 Source: Sonnet book of business and Sonnet website data (2022)
4 Source: Sonnet book of business and Sonnet website data (2022)
5 Source: Sonnet book of business and Sonnet website data (2022)
6 Source: Sonnet book of business and Sonnet website data (2022)
7 Source: Top 5 is based on Sonnet’s book of business as of October 17, 2022
8 Source: http://www.ibc.ca/pe/resources/media-centre/media-releases/they-cheat-you-pay-how-to-report-auto-insurance-fraud