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How to Get the Cheapest Car Insurance in Ontario: Part I

Part 1 of a two-part series on saving on Ontario auto insurance. Check out part 2 here.

Let's be honest here: auto insurance in Ontario is a pure tragedy. We boast some of the highest rates anywhere in Canada despite having a rather saturated insurance market. You would expect some of the cost will be driven down, but unfortunately, that's not the case. Basis for the high insurance rates are a bit unclear: Ontario does not have a particularly high accident rate on per capita basis. If we look at the 2014 statistics from the Department of Transportation, we will see that Ontario is not even close to the top in terms of fatalities or injuries. Here is one graph we can make from the data:

Ontario falls on the low side - in fact, it is the lowest in terms of fatalities.

In any case, an exploration into the reason behind the costs is likely not very useful to you as you are searching for reasonable car insurance. Here are some factors that impact your insurance rates. Some might be useful as tips for getting the cheapest rates you can, especially if you are new driver (either a young driver or new immigrant):

  • Where you live matters: your insurance company will calculate your rate based on your address. However, if you are using your car mostly in a region different than your address (for example, you go to school somewhere different than where your parents live and what is presumably your mailing address), inform your insurance company. This is important for two reasons:
    • Honesty with your insurance company pays off: an insurance company can, and will, deny you coverage if they find out you lied to them about you live.
    • Your insurance rate will, and is likely to be lower, in the city where you actually live. Cities where insurance rates tend to be the highest are Brampton, Toronto, Mississauga and Windsor. Cities where insurance rates are the lowest are Kingston and Ottawa. In fact, the more rural you are, the more likely it is for your insurance to go down.
  • Student away at school and not using car? Tell your insurance company. Many offer "student away" discounts as they realize the risk of an accident (and thus a claim) goes down when said person is not in the house.
  • Your age matters: and it does a big deal. Unfortunately, there is not much you can do about this. Common wisdom goes like this: the highest rates are for you drivers (those under 25). If you are in this bracket, you just have to endure the rates until you hopefully turn 25. There is something to look forward to.
  • Snow tires? Ontario now mandates a discount is offered for drivers who choose to have snow tires. Besides being a smart investment (especially if you live anywhere north of London, ON), you can accumulate a small saving if you install them. Most companies expect you to have them between October and March, and deny you a claim if you stated you had them but is later found not to. Value of the discount? 5% for most insurers. 

Check out part two for more tips on saving on insurance.