According to Ontario Law, every driver must have car insurance on the vehicle that they drive, and every insurance policy must include the following:
- Third-Party Liability Coverage — with a $200,000 minimum in case someone else is killed or injured or their property is damaged as a result of a car accident you are in
- Statutory Accident Benefits Coverage — provides you with benefits if you are injured in an accident even if you were at fault
- Direct Compensation & Property Damage Coverage — for any damage to your vehicle and possessions inside it if you are in an accident and someone else was at fault
- Uninsured Automobile Coverage — for you and your family if you are injured or killed by a vehicle that is uninsured or flees the scene before their identity can be determined
Any insurance you get must come through a company or broker who is licensed to sell car insurance by the Government of Ontario. There are three types of contacts to help you get insured:
- Broker — sells you the best insurance rate from a number of different companies they represent
- Agent — usually sells insurance only for a single company.
- Direct Writer — represents a company that sells insurance directly to drivers.
These different options allow you as the driver to shop around to different companies and contacts so you can find the best insurance rate.
Cost of Car Insurance in Ontario
The cost of car insurance in Ontario depends on several factors. In general, the main things taken into account when setting someone's policy cost include:
- Driving Experience — how long you've been driving in Canada (your record in other countries is not counted)
- Driving History — how many accidents or speeding tickets you have
- Age — the older you are the lower your rates in general
- Gender — women typically get lower rates than men
- Location — there are more accidents in crowded cities like Toronto than in smaller towns
- Vehicle — cars that are cheaper and have higher safety ratings do not cost as much to insure
- Vehicle Usage — the more you drive the higher chance you get into an accident
- Winter Tires — a new Ontario law allows for drivers to get an insurance discount for using winter tires during the snowy season.
Ontario has the highest average insurance rates in Canada out of any other province. This is due to a greater concern for insurance fraud compared to any other province, but also due to the nature of insurance laws. Ontario mandates better standard coverage and accident benefit laws, so the extra cost at least has extra benefits as well.
Car Insurance for New Drivers
For new drivers who are young and are still working their way through Ontario's Graduated Licensing program, insurance policies and costs will work differently than it will once they get their full G License.
First, their rates will be higher. This is because inexperienced and statistically at a greater risk of being in an accident. Each time they upgrade to a higher license level, their rates will be lowered. So the rates from when they have a G1 will drop when they get a G2, and will drop again when they get a full G.
However, the higher rates are can be mitigated if they do not have their own car. If they only drive their parents' cars then they will not be insured as the main. Not being the main driver means they are not using the vehicle as much, and this lowers their rates.
Temporary Car Insurance
Standard car insurance policies in Ontario usually run for at least one year, but there could be unique circumstances where someone needs shorter term car insurance-someone traveling to the province for an extended business trip, or someone visiting family for a few months, someone who has a lapse in their insurance, and so on.
Some insurance companies do provide short term insurance options, but it won't be easy to find information about it on their websites. You will normally have to call several companies and speak to a few representatives before you can find someone who can give you the information you need.
Temporary or short term car insurance should never be used instead of regular insurance. It is considerably more expensive over the same length of time as standard insurance policies.
Do Car Insurance Companies Share Information?
Canada has privacy laws that protect most of your personal information, so insurance companies cannot share your information with each other a lot of the time.
However, there are some other federal and provincial laws that allow for exceptions. The biggest exception is Bill S-4, or the Personal Information Protection and Electronic Documents Act. One of the implications for insurance companies is that it they can share personal information without consent if it reasonably allows them to discover and prevent fraud.
Such cases would be relatively rare, and will not impact most people. Insurance companies would not share information they have about you as a client with other companies when it pertains to your previous rates and coverage.
When Will My Insurance Rates Be Reduced?
There are a few changes that can happen that will help reduce your insurance rates:
- Getting a higher driver's license level or completing a safe driving course
- Being older while also keeping a clean driving record
- Changing your policy's deductible or level of coverage to something cheaper
- Moving to a safer area, somewhere with more secure parking, or out of a bigger city to a smaller town
- Old accidents and tickets falling off of your record
- Shopping around at another company who offers cheaper rates
Some of these changes can happen without you doing anything, and if you want your rate to improve as a result you should call your insurance company to see if they will lower it. If not, take a quick look around at other companies and see if they'll offer you a better rate.
What if I Get Into a Car Accident?
If you are in a car accident, your rates will not necessarily be negatively affected. Here's a quick outline of the various general situations and what they might mean for you:
- If you were the sole driver in the accident, you are automatically at fault
- If you are determined to have not been at fault, your rates are not affected
- If you are determined to have been at fault, it stays on your record for 6 to 10 years and your rates might be affected
If you were found to be at fault but you have been with the insurance company long enough and have a clean driving record, they might forgive the rate increase so it is only a small amount. Any increases to your rates usually only happen once the next year in your policy kicks in.
How to Choose a Car Insurance Company
The best way to choose an insurance company is to shop around and see who can offer the best rates for the type of coverage you want:
- Online Comparison Sites — enter your information and they show you comparative rates from numerous companies
- Insurance Brokers — they represent multiple companies and they can make the best offer from them for you
- Call Them Yourself — if you want to be thorough look up the big companies and call them yourself to see what offer they can make
It might take a bit of time and work, but in the end you can save yourself a lot of money. Remember that there are so many factors that affect how much you pay, and so much that constantly changes, that you can do this again every so often and again find a better deal if you're willing to put in the work. Changing companies does not negatively affect your rates.
Car insurance can be as complicated as just buying the car itself, but with some tips, understanding of the process, and effort on your part to shop around you can get great insurance coverage at a good deal than you might otherwise. Good luck!
You might also be interested in these guides:
How to Get the Cheapest Car Insurance in Ontario
What to Do If You Are in a Car Accident
How to Buy a New Car in Ontario