How Much Does Car Insurance Cost in Canada? (2026 Guide)
How much does car insurance cost in Canada?
On average, car insurance in Canada costs $85–$170/month, or between about $1,000 and $2,000 per year.
Costs vary significantly based on location, age, vehicle, and coverage level. You’re likely to see quotes on the higher end of the spectrum if:
Average car insurance cost in Ontario
As of October 2025, the average cost of car insurance in Ontario is $180/month. Rates may be higher or lower based on rating factors such as driving experience, driving history, vehicle type, and location.
- Greater Toronto Area: $234/month
- Other cities: $173/month
- Rural areas: $145/month
Why car insurance premiums are going up
If you feel like the cost of car insurance is putting a bigger strain on your budget these days, you’re not alone. Statistics Canada reports that car insurance premiums in Canada rose by an average of 8.7% in 2024, following multiple years of steady increases.
Why does car insurance cost so much more today? Several factors are at play:
- Vehicle theft is out of control: Insurers are paying out billions of dollars on auto theft claims each year. In Ontario alone, auto theft claim costs rose by a massive 524% between 2018 and 2023, with no end in sight to the skyrocketing theft trend.
- New cars cost more to fix: The increasing technological complexity of new vehicles, which are often equipped with computer-powered safety systems and other costly tech, means that every physical damage claim costs insurance companies more than in past years.
- Inflation is driving up repair costs: The rising cost of vehicle repairs has outpaced general inflation, with repair and maintenance costs up by 8.1% in Ontario compared with the general inflation rate of 3.3%.
- Personal injury lawyers are pushing costly lawsuits: In Alberta, Ontario, and other provinces that mix no-fault insurance with a tort-based system that allows drivers to sue for damages, personal injury lawyers advertise aggressively, drawing consumers into lawsuits that place heavy costs on their insurance providers and drive up premiums for everyone.
As these and other market forces put increased financial pressure on insurers, auto insurance is nearing unprofitability for many Canadian insurance companies. The rising premiums you may see on your renewal notice may be your insurance provider’s attempt to keep their business viable in a difficult market.
“Car theft is driving higher insurance costs, definitely. In Ontario, we have seen a huge rise in car insurance theft claims. Within the last year there was a study and over a billion dollars was paid out in car theft claims across Canada.” —Reza Aziz
What factors affect car insurance cost?
Car insurance companies in Canada base your premium on a range of factors, from demographic information to specific coverage selection. In the industry, we call these cost-influencers “rating factors.”
You can influence four of these rating factors through the choices you make when you shop for car insurance. The rest are largely out of your control, but important to understand when you’re comparing quotes.
1. The type and amount of coverage you choose
The biggest factor affecting how much your car insurance costs is how much you buy and what type of coverage it is.
You’ll always pay for the minimum mandatory coverage required by law in your province. In Ontario and most other provinces, that includes third-party liability coverage, accident benefits, and uninsured automobile coverage. It’s then up to you whether to add on optional coverage like collision or upset, comprehensive, or all-perils coverage.
- Mandatory third-party liability coverage
- Collision or upset coverage
- Comprehensive coverage
- All-perils coverage
- Third-party liability coverage above the default amount
- Lower deductibles for collision or comprehensive coverage
- Accident forgiveness
2. The deductibles you select
Any physical damage coverage on your car insurance policy—including collision, comprehensive, all perils, specified perils, or direct compensation property damage (DCPD) coverage—comes with a deductible. That’s the dollar amount you agree to cover out of pocket in order for your insurer to pay the rest of the cost to repair your car (up to your policy’s limits).
Choosing your deductibles is a key part of the car insurance shopping process. The higher your deductible, the more you’ll pay in the event of a covered loss, but your car insurance premiums will be lower in exchange for the risk you take on. A low deductible, on the other hand, can make your coverage more useful if you’re willing to pay a little more each month.
3. The insurance company you buy from
Every Canadian insurance company calculates auto insurance premiums differently, using proprietary algorithms and underwriting processes. While provincial governments regulate auto insurance rates, individual insurers are free to adapt their pricing structures to attract and reward certain driver profiles (e.g., drivers with no at-fault accidents, young drivers, or drivers seeking to bundle auto and home insurance).
Your profile will earn you different rates from every auto insurer, which is why shopping around is so important.
If you live in British Columbia, Manitoba, or Saskatchewan, you can only purchase car insurance through a government program, so there’s no difference in price between carriers. In other provinces, however, competition between private auto insurers means you may be eligible for a range of prices for the exact same coverage options. Shop around to make sure you find the best rate.
4. How you shop
Many insurers in Canada offer small discounts for customers who request auto insurance quotes online and purchase insurance products through a website or online broker rather than a traditional agent.
On the other hand, working with a broker could help you maximize the car insurance discounts you’re eligible for, since brokers may have inside knowledge of which savings programs any given insurer offers.
When you get car insurance quotes with PolicyMe, we compare options across providers and recommend the best coverage for your profile. We break down what’s included and why it matters, so you can feel confident you’re getting the right protection at the best price.
5. Whether you bundle your home and auto insurance
If you own both a home and a car, bundling home and auto insurance is a key savings strategy that could reduce the cost of both policies by as much as 20% or more. For drivers who don’t own their home, some insurers may offer the option to bundle auto and tenant insurance for a lower rate.
Other factors
In addition to the choices you make when shopping for car insurance, insurance companies analyze
- Your age, gender, and marital status: Older drivers, women, and married applicants typically pay slightly lower car insurance rates due to their perceived lower risk.
- How and how much you drive: Insurers will ask about your annual kilometres driven, the length of your commute, and the type of driving you do (e.g., pleasure, commute, or business).
- Your driving record: You must report any at-fault accidents or driving violations like speeding tickets within a given time period (usually 3–7 years).
- Where you live: Insurers will consider risks like vehicle theft and traffic crash rates in your postal code.
- Where you keep your car: Some insurers may ask where you keep your car; a private garage is the safest place to keep your vehicle and will earn you the lowest insurance rates.
- The type of vehicle you drive: Insurers analyze loss statistics associated with vehicles of the same age, make, and model to determine how much to charge you. You may be able to earn a discount if you have an anti-theft device or winter tires installed.
- Your insurance history: Maintaining auto insurance coverage over many years with minimal or no claims shows prospective insurers that you’re a safe bet; a short insurance history or a record of multiple car insurance claims could raise red flags.
In recent years, many Canadian insurers have introduced usage-based insurance (UBI) apps which track real-time driving behavior in exchange for potential discounts on auto insurance. But can the promise of UBI really live up to the hype?
The reality: Most insurers offer a 5–15% activation discount just for opting into a UBI program, but this discount is often temporary. Once the program has collected enough data to issue a discount or surcharge, your car insurance premium could go down by 15–35% if the app detected safe driving habits—or it could go up by as much as 30%.
Your choice: Think about your own driving habits, driving conditions in your area, and your overall tolerance for data sharing. Ask before you sign up whether the program issues both discounts and surcharges, or discounts only.
“It’s important to be completely honest when providing information for your auto insurance quote. Failing to disclose accidents, tickets, or other details may result in a lower initial quote, but the price will likely increase once the insurance company reviews your driving record.” —Adam Seguin, Licensed Insurance Advisor
Why car insurance prices can vary so much
The cost of car insurance can vary significantly between insurance providers, as well as over time, due to a number of factors.
- Insurers use different underwriting models: Underwriting is the process by which insurers estimate the risk of insurance claims associated with a given applicant. Each company does it a little differently.
- Risk tolerance varies between carriers: Each car insurance provider in Canada is looking for different business. Some may focus on attracting “high-value” customers who are likely to be loyal, reliable clients and purchase multiple insurance products; others might be chasing the business of high-risk younger drivers who will pay higher premiums out of necessity.
- Everyone’s insurance needs are different: Your price depends in large part on the insurance coverage you need. A new vehicle or inexperienced drivers might necessitate a higher level of coverage, thus driving up the cost of insurance.
- Market forces are driving up costs: Inflation, tariffs, labor shortages, and increased vehicle complexity are driving up auto repair costs in Canada. The result: insurance companies have to pay more to fix cars, and they’ll charge more to insure them as a result.
How to compare car insurance costs
To make sure you’re getting the best coverage at a price that fits your budget, compare costs and coverage from at least three different Ontario insurers when getting car insurance.
A 2023 study by the Financial Services Regulatory Authority of Ontario (FRSAO) found that only two-thirds of drivers in Ontario compare quotes from multiple providers when shopping for insurance. That means one in three could be missing out on savings without even realizing it. Don’t be one of them.
How to manage the cost of car insurance
Your auto insurance policy is an essential expense, but it shouldn’t overburden your budget. If the bill feels like it’s getting too high, a few strategies may help you reduce your overall insurance costs:
- Comparison shop on a regular basis: Auto insurance providers in Ontario may adjust their pricing once or twice a year. You should be shopping on the same schedule to make sure your price keeps pace with market changes.
- Adjust deductibles thoughtfully: A higher deductible could reduce unnecessary expenses, but be cautious—if your deductibles are too high, your comprehensive and collision coverage could become effectively useless.
- Bundle insurance if you can: Homeowners can almost always save with a home and auto insurance bundle. If you own a home and a car, get bundled quotes to find the best price for both insurance policies.
- Maintain a clean driving record: A single at-fault driver violation could raise your rates for years to come, so drive defensively with your insurance premium in mind.
FAQ: How much does car insurance cost?
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.