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Top 5 Factors That Affect Your Car Insurance Rates

car insurance Ontario

Buying car insurance in Ontario is mandatory and you may have a host of insurance companies to choose from. Generally speaking, the lower your perceived risk of filing a claim, the better your car insurance rates. However, understanding the factors that go into determining the risk and rates will help you make more informed decisions about the vehicle you purchase, as well as your auto insurance coverage.

The knowledgeable and experienced auto insurance team at Orr & Associates offers useful insights into the various considerations that go into determining car insurance rates in Ontario.

Why is Car Insurance Mandatory in Ontario?

Ontario introduced The Compulsory Auto Insurance Act in 1990 to establish the bare minimum levels of car insurance for every driver on the road. The key objective of this Act is to ensure that everyone has the means for recovery and support, even if another driver involves them in an accident.

Factors Affecting Car Insurance Rates

There are numerous considerations that go into deriving car insurance rates. While certain factors, such as your city’s population density or your age are beyond your control, maintaining a good credit history and driving record are aspects that are entirely in your hands.

Here’s a closer look at the top five factors affecting car insurance rates.

1. Provincial Requirements

Your residency location and provincial minimum coverage directly influence your insurance rates. Ontario mandates Liability Coverage, Direct Compensation, Accidental Benefit Coverage and Uninsured Automobile Coverage as the bare minimum in your auto insurance policy. Choosing add-ons, such as roadside assistance, uninterrupted driving coverage, accident forgiveness, or comprehensive coverage will drive up your rates and premiums further.

2. Make and Model of the Car

Besides the basics, such as the make, model, and age of the vehicle you choose, insurance companies will look at past claims from similar models, including the typical repair costs, theft rates, or payments made for comprehensive claims. While vehicles with better safety ratings and features could earn you some discounts on the insurance rates, the makes or models that are statistically more prone to thefts may increase your car insurance in Ontario.

3. Age and Gender

Insurers assume that the lesser your driving experience, the higher your chances of getting into an accident. While young drivers may pay as high as *$750 – $800 CAD per month, experienced drivers may pay only $225 – $250 CAD per month for auto insurance; a rate variation of over 300% based on age. Insurance companies may also look at the statistical claims based on gender, and males tend to pay slightly more due to the historically higher claims ratio.


4. Car Usage

The primary usage of your vehicle can drive your auto insurance rates upwards or downwards. Vehicles used for commuting to work or weekend errands may be less expensive to insure than vehicles used as a means of employment, such as a ride hailing service.

5. Driving Record

Your driving record provides insurers an insight into historical moving traffic violations, impaired driving convictions, as well as at-fault accidents. A clean record will earn you discounts on your auto insurance policy, whereas a poor record could raise the rates by almost 40% for the next 3 to 5 years.

Other Factors Affecting Car Insurance Costs

While establishing the auto insurance rates, the insurance companies may also consider several non-driving aspects, such as:

  • Marital Status
  • Yearly Mileage
  • Postal Code
  • Occupation
  • Education

How to Minimize Car Insurance Costs

Besides maintaining a clean driving record and making smart choices on the vehicle purchase, you can drive down car insurance rates in a few other ways.

  • Shop around and compare policy details to get the most suitable terms
  • Choose a higher deductible or lower coverage value
  • Bundle your car and home insurance policies to get group insurance discounts
  • Park your vehicle in a garage or install a theft deterrent system
  • Consider installing a telematics product that lets your insurer track and reward good driving behaviours with policy discounts
  • Drive less to keep your annual mileage low, and consider car pooling

Talk to an Experienced Insurance Broker Near You

At Orr & Associates, we specialize in managing the auto insurance needs of clients across Ontario. Our partnerships with all the top insurance companies in Canada help us to find the best possible match for your auto insurance coverage and benefits requirements. You can count on our experienced and knowledgeable car insurance brokers in Barrie, ON, King City, ON, and various other Ontario locations to guide and support you throughout the process of purchasing or renewing your auto insurance.

Call 1 (866) 521 5926 toll-free or complete our online form to get a free quote for your auto insurance needs in Ontario, as well as other types of personal or commercial insurance requirements.