Cheap Car Insurance in Toronto (2023)

You can be sure that when it comes to the average auto insurance rate in the Toronto area it’s going to be considerably greater than Ontario’s as a whole.

Up to Q3 2022, the average auto insurance rate in Toronto is $1,921, according to My Choice Internal Data. However, some areas in Toronto are more expensive than the rest. If you’re a driver in the Toronto area you can expect to pay the highest car insurance in Ontario, compared to $1600 per year average for the rest of Ontario.

As of Q3 2022, Toronto’s three most expensive postal codes are M3N and M9M at $2,712/year, M3L, M3J, and M9N at $2,673/year, respectively, and M9L at $2,598/year. 

Toronto auto insurance is one of the most expensive in the country but there are several things you can do as a driver to get the lowest rate on auto insurance:

1) Compare different insurers:

My Choice makes this easy by showing you all of the insurance companies that fit your needs so that you can see what the most affordable coverage plan is, for you. You can compare all potential insurers and see the average cost of auto insurance in your area in one place.

2) Bundle up your insurance packages

Adding other types of insurance such as house or condo insurance to your car insurance policy will lower your rates.

3) Drive safely

Your driving record impacts the rate you get as a driver. Doing things like taking a safety driving course and avoiding getting in accidents help you get the lowest car insurance rates. The more times you file a claim, the more likely your insurance rate increases. If you are in an accident, keep in mind that after three years you can get that accident removed from your driving record.

4) Choose the right type of vehicle

Cars with high crash-test scores, low theft ratings and less powerful engines tend to have chapter insurance rates. So keep this in mind when deciding on the type of car that you are going to buy.

5) Having safety features

In a country like Canada where heavy snow and ice can make the roads much more dangerous, having safety features like winter tires and alarm systems can reduce your auto insurance premium.

6) Pick one insurer

While you want to look around at multiple insurers to get the right deal, many times insurers will give discounts to drivers that stay with them for a long period of time. These discounts can help you get your overall cost well below the average cost.

7) Pay on time

Paying on time can lead to lower premiums. Insurers like any business like customers who pay on time and will incentivize you to stay with them if you are someone that pays consistently.

Being an uninsured driver is illegal in Toronto, while it’s not a criminal offence you can incur heavy fines and potentially a suspended license. All drivers in Ontario must carry a minimum of $200,000 in third-party liability insurance. While this is the minimum requirement many insurance companies provide much more coverage than this. A good rule of thumb for something like this is to always ensure you are adequately covered for the mandatory car insurance coverage requirements and then add on some optional extras that suit you and your family.

If you purchased your car with a car loan then the lender mandates that you have extra coverage to protect their investment in the vehicle. Most often they require collision and comprehensive coverage along with minimum liability coverage. Lenders are well within their rights to require extra coverage as part of the loan agreement’s terms and conditions.

As a new driver you have 14 days to inform your insurer of your new car. The insurance company backdates premiums from the purchase date to ensure continuity of coverage. It’s best to advise the insurer of your newly purchased vehicle as soon as possible.

Although it’s the largest city in Canada, Toronto has some areas with low car insurance premiums. 

As of 2022, there are three postal codes where car insurance rates are well under the city average. These three postal codes are M4X, M4W, M5B, M5V, M5S, M7A, M5J, M4Y, M5H, M5G at $1,620/year, M2N at $1,652/year, and M6P, M8Y, M5T, M8Z, M8X, M6J, M8W, M6R, M8V, M6H, M9B, M6K, M6S at $1,684/year.

Check the table below for a detailed look at the three most affordable wards for car insurance in Toronto:

Each car insurance company is slightly different in how they calculate Toronto car insurance rates and that’s why the rates will vary across insurers. However, here are the main factors that companies use to calculate your rates:

Type of vehicle you drive:

Certain vehicles get higher rates than others depending on things like the vehicle’s safety score, how likely it is to get targeted for theft etc.

Your individual profile:

Insurers will look at your individual profile and evaluate you based on gender, age, marital status and the type of license that you hold.

Your residential address:

Depending on where you live in Toronto you will get higher or lower rates. Insurance companies look at postal code, city and region to evaluate your rates.

Your driving habits:

How often and how you use your vehicles will be a determining factor on how high or low your insurance rates will be.

Driving experience:

The more experience you have the less of a risk you will be and therefore the lower rates you will pay.

Insurance History:

Depending on how long you have been insured, previous claims history and how long you have been with a specific insurer.

Required Coverage:

Depending on how much coverage you desire and how many drivers you want to put on the plan will also affect your insurance rate.

Driving School:

If you completed drivers school you are deemed as less of a risk and therefore pay lower rates. These teach you how to drive defensively so that you know how to protect yourself from other drivers as well as icy and snowy roads that can cause accidents.

Ontario has some of the most expensive cities in Canada when it comes to auto insurance. Toronto is one of those cities, coming in at about 5th on the most expensive cities in Ontario. If you live in Toronto you can expect to pay about $2,000 per year for car insurance.

The table below showcases the most expensive cities for auto insurance in Ontario, as you will see all of the locations listed are within close proximity to each other and are more or less in the GTA.

In first place we have North York at around $2500 per year, followed by Etobicoke at around $2400 per year and in third place is Brampton to make up the top 3 most expenses cities for car insurance.

If you are looking for more information about car insurance in Ontario cities, check out our detailed pages about Toronto, Ottawa, Windsor, London, Markham, Oshawa, Mississauga, Brampton, Thunder Bay, Hamilton, Sudbury, Guelph and Kitchener.

As a driver in Toronto you are subject to car insurance laws from Canada as well as the province of Ontario. In Ontario you are required to get a minimum car insurance coverage of at least $200,000 in third party liability coverage. This covers anyone injured or killed and all physical property damages caused by a car accident for which you’re at fault. Keep in mind this covers damages for the person you hit but not yourself. 

Second, your insurance must include statutory accident benefits coverage which covers you (the driver) in the event that you’re injured in a car accident, regardless of fault. This includes rehabilitation care, caregiver benefits and non-earner and income replacement.

Third, you need direct compensation-property damage, which allows you to collect payment directly from your insurance company in the event of a loss of the vehicle use and it’s contents, even if it’s another person’s fault.

Lastly, your insurance policy must include uninsured automobile coverage, which protects against damages or injuries caused by a hit-and-run collision or an accident involving an uninsured driver.

Mandatory Car Insurance Coverage Needed in Toronto for financed cars

If you have a financed car the lender will dictate the required minimum policies above that is required by law. This is done by the lender to protect its assets and this will usually be a condition of financing the car. These additional requirements usually mean higher premiums.

In addition to the mandatory types of insurance coverage there are other types of coverage that provide protection in the event of car damage. Here is a breakdown of the different types of optional auto insurance available in Ontario:

Collision Coverage

This type of insurance expands upon liability by adding coverage for the policy owner’s car too. This way even if you are at fault for an accident your insurance would cover damage to you such as your medical bills, car damages and any injuries you sustain.

Comprehensive Coverage

This is the broadest type of auto insurance coverage and it covers everything that collision and liability coverage does as well as situations like vandalism, theft, flood damage and many other types of losses.

Guaranteed Asset Protection (GAP) insurance

This type of insurance pays out the difference between what you owe on your car loan and the amount of money your insurance companies give you following an accident or vehicle theft. Since brand new cars lose 9-11% of value when it’s sold and even more over time there’s often a difference between the value of the car and the remainder of what’s left on the loan, this is where GAP insurance comes into play to cover the difference. To receive this payout the car must be deemed a total loss, meaning the cost to repair the vehicle exceeds its value or the police never recovered it after a theft.

Armed with the best car insurance in Toronto and these driving tips, you’ll be sure to keep your no claims bonus.

• Stay calm, focused and alert: Driving in Toronto can be stressful with lots of traffic, pedestrians and cyclists to contend with so take care when driving.
• Watch out for streetcars: When driving on roads with streetcars, try to avoid driving directly on their steel tracks, especially in the rain as these can become slippery and dangerous.
• Parking: Parking can be very troublesome, even more so in the downtown core. There are minimal free spots and on a weekend these spots become ever more hard to get.
• Take shorter routes: If you are driving east or west in the downtown core, take Richmond St (one-way West) or Adelaide St (one-way East). This will be quicker and easier than having to battle on King or Queen St which have streetcars and parking to contend with.
• Avoid traffic bottlenecks: Within Toronto some roads are worse for traffic bottlenecks than others. The CAA recently identified that Toronto has 5 of the worst bottlenecks for traffic in Canada, notable ones are, Highway 401 between Highway 427 and Yonge Street, Don Valley Parkway between Don Mills Road and Finch Avenue and finally, Gardiner Expressway between the South Kingsway and Bay Street.
• Invest in winter tires: Driving in the snow and ice makes things more dangerous, investing in winter tires will give you better traction and reduce the chances of an accident.
• Get gas before heading downtown: Gas Stations are more expensive and less common in downtown Toronto.

We recommend that you shop for car insurance every 6 to 12 months. Since most car insurance policies last for 6 to 12 months a simple way to do this is to make a habit of comparing quotes each time you receive an offer for renewal. There are three reasons you want to do this:

1. It’s a Competitive Market: Toronto auto insurance is a competitive market with new businesses entering frequently. An insurer that is trying to build up it’s clientele is likely to give you discounts and rates that are better than the rest of the market.
2. Your situation has changed: If any of the factors that affect your auto insurance premiums have changed you want to get a policy that reflects this. Some of these factors include geographical location, credit history, marital status, age etc.
3. Combining Policies: One strategy we often recommend for getting lower rates is to combine multiple insurance policies. Periodically you should assess all the insurance policies that you hold and look for opportunities to combine these policies into one.