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Why is Auto Insurance So Expensive in Ontario?

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There are really two main reasons why auto insurance is so expensive in Ontario as compared to the other provinces in Canada. First, Ontario has the highest density of drivers in Canada. The higher density of drivers means the more likelihood of an automobile accident or injury claim. For example, there is a greater chance of an auto accident in Toronto, than there is in Winnipeg. This possibility and greater likelihood you may have an accident in Ontario, drives higher collision premiums.

Big city environments also have a higher claims ratio for theft related losses. People are not as connected in large cities as they are in smaller communities making changes in the routine or habits less noticeable or predictable. This makes it more likely that a car will be stolen in a larger urban environment. For more information from the Ontario government, check out their extensive website. It is built to help you understand the factors that make up your premium.

Auto Insurance premiums are related to the quality of Care

The second and most important factor in why automobile premiums are higher in Ontario is that Ontario has the most lucrative and most expensive accident benefits system in all of North America. The levels of coverage that are provided for victims of accidents in Ontario are greater

than anywhere else. A higher costing system requires those that participate within that system to pay, and it’s expensive.

Auto Accidents Can be a Business

Another factor that drives auto insurance premiums in Ontario is fraud. The Insurance Bureau of Canada describes how some individuals use the system in order to defraud companies and in turn drive up costs for all Ontarians. An accident benefits system that has very lucrative benefits attracts many who are opportunistic and abusive. One of the unfortunate side effects of fraud in our accident benefits system is that it is now more time consuming and complex for those who have honest and legitimate claims to receive prompt and effective help from the claims department.

So What Can Be Done to Reduce Auto Insurance?

A few examples would be to:

  • Reduce the value of the accident package we currently have (less coverage, less overall cost)
  • Increase the battle against fraud, making it easier for accident victims to receive benefits
  • Increase safe driving programs and crack down on distracted driving
  • New premium calculation tools that focus on individual driving habits

Ontario automobile premiums are expensive and need to come down. Ask us to review your current policy and allow us to provide you with premium reduction recommendations.

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Category: Insurance

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