Car Insurance Discounts: How to Save on Auto Insurance in Ontario
How car insurance discounts work
Car insurance discounts reduce your base insurance premium if you meet specific eligibility requirements, such as bundling multiple policies or demonstrating that you’re a safe driver.
Car insurance pricing in Canada is based on risk factors such as driver age, driving record, vehicle features, and location. When you apply for car insurance quotes, insurance companies will evaluate your risk profile and adjust your price higher or lower based on your estimated risk of claims.
Discounts operate on top of this base pricing primarily to reward customers who reduce their risk or insurers’ potential costs by:
- Bundling multiple policies together (e.g., home and auto insurance bundle or multi-vehicle policy)
- Exhibiting safe driving habits (e.g., remaining accident-free or taking a driver training course)
- Owning a vehicle with low accident and theft risks
- Demonstrating financial stability (e.g., by paying premiums in full and on time)
Auto insurance discounts benefit both the customer and the insurer by functioning as savings mechanisms and marketing incentives.
Some car insurance discounts apply to your entire premium, while others only apply to a portion of your premium. For example, bundling discounts typically reduce your whole premium, while discounts for anti-theft devices may only apply to the comprehensive or specified perils portion of your premium. This may vary by provider.
Most common car insurance discounts
Common discounts for car insurance in Ontario include bundling and multi-vehicle discounts, safe driving discounts, winter tire discounts, and group discounts for members of various alumni and professional organizations.
Most insurance companies offer a core set of standard discounts, but discount amounts and eligibility terms vary significantly, and each company may also offer unique discounts not found with other carriers. Shopping around and comparing discount options as well as base pricing can help you find the best fit for your driving profile.
Policy discounts
Some of the most powerful discounts are based on the way your policy is set up, like the number of policies in your name, the number of vehicles on your policy, and the way you pay for your insurance.
Discounts for bundling home and auto insurance are often the largest discounts offered by Ontario insurers.
- Advertised savings: Discount caps range from 5% to 26%, with additional savings for home insurance.
- Actual savings: Typical savings average around 10–15%.
- How to earn it: Compare bundled home and auto insurance quotes.
- Standard discount? Yes
If you own more than one car, insuring them together will cost less than the base premium for each car insured individually.
- Typical savings: Typical discounts average between 10 and 20%.
- How to earn it: Request car insurance quotes for more than one vehicle.
- Standard discount? Yes
Paying your annual premium in full, buying online, paying on time consistently, and staying with one insurer for multiple years can all earn you savings.
- Typical savings: Pay-in-full, buy online, and responsible payer discounts mean you save on any interest charges. Loyalty discounts may start small but grow over time.
- How to earn it: Pay your premium in full and on time, buy online, and stay with the same insurer for multiple years.
- Standard discount? No; check with your insurer to see if a discount is offered
Driving discounts
In addition to pricing options based on your statistical projected driving risk, insurance companies may offer a range of discounts based on how you actually drive.
Policyholders with a clean driving record and no at-fault accidents or claims within a certain period almost always qualify for a reduced rate.
- Typical savings: Around 30–35%, but savings vary significantly based on driving experience and insurer.
- How to earn it: Maintain continuous insurance coverage for a certain number of years without any claims or at-fault accidents. Five years without claims is a common requirement for this discount.
- Standard discount? Yes
If you complete an approved defensive driving course or Beginner Driver Education (BDE) course, your insurance company might issue a discount.
- Typical savings: Savings vary, but 10% or more is common and typically only applies for the first three years of being licensed after completing training.
- How to earn it: Complete a Ministry of Transportation (MTO) approved driver training course and send the certificate of completion to your insurance company.
- Standard discount? No; check with your insurer to see if a discount is offered
Ontario insurers offer two one-year discounts for drivers who go through the graduated licensing process: a 10% discount for a year after the driver progresses from a G1 to a G2 license, and a second 10% discount when the driver becomes fully licensed (G).
- Typical savings: 10% for one year only
- How to earn it: Progress through the graduated licensing system.
- Standard discount? Yes
Vehicle discounts
While your base pricing may be reduced if your vehicle has competitive safety features, a relatively low statistical rate of claims, or other favorable characteristics, insurers may issue distinct discounts for certain vehicle features.
If your insured vehicle is brand-new, you may be eligible for a temporarily discounted rate during the first few years of ownership.
- Typical savings: Varies by insurer and vehicle
- How to earn it: Insure a vehicle less than three model years old, typically as the first owner.
- Standard discount? No; check with your insurer to see if a discount is offered
Also known as a green vehicle discount, electric and hybrid vehicle discounts can reduce premiums as an incentive for eco-friendly vehicle ownership.
- Typical savings: A 5–10% rate reduction is standard when this discount is offered.
- How to earn it: Insure a hybrid or electric vehicle that meets insurer requirements.
- Standard discount? No; check with your insurer to see if a discount is offered
Under provincial law, all insurers in Ontario are required to offer a discount to drivers who install approved winter tires during winter months each year.
- Typical savings: The winter tire discount is never greater than 5% and may be as low as 2%.
- How to earn it: Install a full set of certified winter tires with the three-peak mountain snowflake symbol on the sidewall within the dates specified by your insurance company (typically November 30 or December 1 to March 31 or April 1). Note that all-season, all-weather, and summer tires don’t qualify, even if they have the symbol.
- Standard discount? Yes
Anti-theft discounts for car insurance in Ontario aren’t always true discounts; instead, you may simply avoid a surcharge applied to vehicles with a high theft risk.
- Typical savings: When discounts are offered on top of the surcharge waiver, they’re typically between 5 and 20% and only apply to comprehensive or specified perils coverage.
- How to earn it: Provide proof of an anti-theft system, such as the TAG system or other theft deterrent/recovery device (e.g., immobilizer, steering wheel lock, or VIN etching).
- Standard discount? Yes
Personal discounts
Certain groups, such as young drivers and seniors, may be eligible for additional savings based on their personal characteristics.
One of the most common discount categories, group and affinity discounts offer specific rate reductions for members of various professional associations and alumni organizations.
- Typical savings: Discounts vary by insurer and eligible organization, but you can often save up to 15%.
- How to earn it: Provide proof of membership in an eligible group.
- Standard discount? Yes, but eligible groups vary by insurer
Some insurers offer unique discounts for full-time college and university students. Discounts may be applied for students who maintain good grades or for students attending school far from the insured household and vehicles.
- Typical savings: Away-at-school discounts can reduce premiums by up to 50%, but they only apply to the portion of your premium that represents the student driver. Good student discounts are typically smaller.
- How to earn it: Provide proof of enrolment and grades, if necessary.
- Standard discount? No; check with your insurer to see if discounts are available for students
Usage-based or telematics discounts
Telematics, or usage-based insurance (UBI), is a growing category of car insurance discounts that uses GPS and smartphone technology to deliver tailored discounts based on how individuals actually drive.
Telematics programs track unsafe driving habits such as phone use, speeding, hard braking and acceleration, and late-night driving. They reward drivers who avoid these habits as much as possible.
Most telematics discount programs follow the same basic steps:
- Enrol for an initial discount: Most insurers offer a temporary discount (around 10%) for customers who sign up for a telematics program. The discount will be removed once you’ve passed the initial data collection period.
- Drive with an activated mobile app or device: In most cases, you’ll download a smartphone app that uses GPS technology to track your driving habits in real time. A few carriers use a physical device that plugs into your car’s OBD-II port to track the same data. The duration that your driving will be tracked may vary by carrier.
- Renew your policy: If you’ve completed enough trips to meet program requirements, your premium will be adjusted to reflect an activity-based discount or surcharge at your next premium renewal.
Telematics discounts range from 15% to 35%, making them one of the most powerful potential savings tools for Ontario drivers. That said, insurers are allowed to impose surcharges (that is, premium increases) on drivers if their telematics data reveal unsafe driving habits. Potential surcharges range from 5% to 30%, with just three major Ontario insurers offering a risk-free telematics discount that won’t raise your rate.
Carrier-specific discounts
Some Canadian insurance carriers offer unique discounts that are specific to a particular carrier, typically as a membership reward for members who pay for other financial or automotive services from the same company. These include:
- Allstate vehicle safety discount: If your vehicle is 2010 or newer and you purchase insurance through an Allstate agent, you may be eligible for tailored discounts based on your vehicle’s Advanced Driver Assistance Systems (ADAS), such as forward collision mitigation or lane keeping assist.
- CAA Head Start discount: The children of CAA policyholders in good standing may be eligible for a 25% discount if they are under age 25, have a clean driving record, and are listed as the principal driver on their policy.
- CAA membership discount: CAA members who pay for a roadside assistance membership qualify for 20% off their auto insurance premiums.
- Co-operators welcome discount: First-time Co-operators customers can receive a 10% discount on certain coverage and vehicles.
- Co-operators Safe Drivers Reward Program: Drivers aged 16 to 22 who remain continuously insured with Co-operators for three years while maintaining a clean driving record may qualify for a year of entirely free premiums.
- PC Optimum™ member discount: PC Optimum members may qualify for automatically reduced premiums.
Can you combine car insurance discounts?
Yes, you can combine car insurance discounts to maximize your savings. For example, if you have a multi-policy discount for bundling home and auto insurance, you can reduce your premium further by installing an anti-theft device, equipping your vehicle with winter tires, and listing a full-time college student as an occasional driver.
If your auto insurance policy includes multiple vehicles, some discounts may be applied individually to each vehicle’s premium, or they may be limited to a single vehicle. For example, an anti-theft discount will only apply to the vehicle that has the anti-theft system equipped. If more than one vehicle has an anti-theft system, multiple discounts will apply to the relevant portions of your policy.
Car insurance discounts are usually calculated from your original premium, not a previously discounted amount. For example, if your premium is $100 and you receive a 20% bundling discount, a later 5% pay-in-full discount is still calculated from the original $100—not the reduced $80 premium.
Other ways to save on car insurance
Discounts can reduce your premium if you meet certain eligibility requirements, but they’re not the only way to save money on car insurance in Canada. Other key savings strategies include:
- Choosing a higher deductible: If your policy includes comprehensive, collision, or all-perils coverage, you can raise the deductible assigned to that coverage in exchange for a lower premium. Be careful not to select a deductible that’s higher than you could realistically pay out of pocket in the event of a claim.
- Shopping annually: Car insurance companies update their pricing models each year, so you may be eligible for lower rates from another company any time your policy is up for renewal.
- Review coverage selections with an advisor: Being overinsured is an easy way to pay more than you need to for car insurance. An advisor can help you identify any redundancies, unnecessary coverage, or gaps in your policy.
When you compare car insurance quotes with PolicyMe, you’ll be able to speak with a licensed insurance advisor to review your coverage and options. Advisors can help you identify discount opportunities and find the right coverage at the best price available.
FAQ: Car insurance discounts
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.