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Are you paying too much for auto insurance?

Are you paying too much for auto insurance?

Are you sick of paying too much for auto insurance? You’re not alone. Auto insurance premiums can really take a bite out of your budget whether you’re young or old. When you’re in your golden years and on a fixed income, an increase in your premiums may mean the difference between driving your car and selling it.

Ontario is home to our nation’s capital, Ottawa. It’s also home to Canada’s highest auto insurance premiums. Drivers in Ontario have been grumbling about high auto insurance premiums for years. The Ontario Liberals promised to lower auto insurance premiums by 15 percent by introducing sweeping changes, but so far premiums have only come down by 8.35 percent.

We all know we’re paying too much for auto insurance, but do you know why? Here are several factors that affect your insurance premiums. Some of them are within your control, while others aren’t.

Related: Car Insurance for Canadian Drivers

The things outside your control

These factors may be outside your control, but it doesn’t hurt to understand how they affect the premiums you pay. Your age directly affects how much you’ll fork over in premiums. Boomers on average pay $900 less in premiums than millennials, according to the Ontario Car Insurance Report by Lowest

Another factor that affects your premiums is your gender. A lot of drivers believe this has a bigger impact on premiums than it actually does. The Ontario Car Insurance Report found male drivers only pay about $125 more each year in premiums than females.

The things you probably won’t change

If you’re anything like me, you want lower premiums, as long as it’s convenient. Your location, daily commute, and vehicle are all thing you could change, but probably won’t. Nevertheless, it’s good to know how they impact your premiums for budgeting purposes if you’re considering moving to a new city or town or buying a new vehicle (you don’t want to be surprised how high your premiums are after you drive your new car off the lot).

Drivers in Toronto pay the highest premiums in Ontario. But the population of your city doesn’t always mean you’ll shell out more in premiums. For example, in Ottawa, which has over double the population of London, you’ll actually pay less on average in premiums than London.

Not surprisingly, the longer your daily commute, the more you’ll pay in premiums. Before you trade in your old vehicle for a new one, consider your premiums. The report found a 2016 vehicle costs nearly $800 more in a year to insure versus a vehicle that’s 10 years old.

Related: 10 Myths of Financial Planning

Shop the market and save

The one thing that you can change is your vehicle insurance provider. Similar to your mortgage, it pays to shop around – literally. The report found user paid an average of 9 percent less for auto insurance in the summer of 2016 versus the summer of 2015 when they shopped the market.

Instead of simply renewing your auto insurance, take the time to shop the market to see if you can find a lower quote. Get in the habit of comparing your auto insurance premiums annually and start


  1. M Boulanger

    Thank you for the article.
    Would be nice to know about Auto Insurance particulars in other parts of Canada, other than Ontario.

  2. B Garrod

    ….Am i missing something? The first paragraph says this…”Ontario is home to our nation’s capital, Ottawa. It’s also home to Canada’s highest auto insurance premiums”. Later in the article this is stated “For example, in Ottawa, which has over double the population of London, you’ll actually pay less on average in premiums than London.” Which is it?
    Frankly all this article says is “shop around”. Not the kind of insights Ive become accustomed to at retirehappy. I use a broker who is helpful and finds the products I need at a fair price

    • Ross

      You sure are missing something. The sentence “It’s also home to Canada’s highest auto insurance premiums” refers to Ontario, not to Ottawa.

  3. Sandra Flagler

    Sorry to say there’s not a whole of info in this article that I didn’t already know and very little of real substance that would make much difference to me as a consumer. If you really want to know how to save money if you drive here are substantive items:

    1. always drive the speed limit no matter what: less chance of having an accident, more chance of avoiding someone else’s collision, lower gas costs, lower maintenance costs plus a speeding ticket will result in paying a hefty fine and possibly a loss of points that will increase your insurance rates.

    2. always pay for parking in parking lots and at meters: why pay a $40 or $50 or $60 ticket when you can park for $5.00 or $10.00

    3. never loan your car to anyone, anywhere, any time unless you have insurance coverage for occasional drivers and you know exactly how that person drives and parks your car. You and no one else will be responsible for accidents, damages, speeding tickets, parking tickets, etc. when someone else drives your car.

    4. never text or talk on your phone when driving: a split second with eyes off the road could mean an accident that will (a) increase your insurance rates (b) make you “uninsurable” depending on circumstances (c) tie you up at an Accident Reporting Centre for the better part of an entire day (d) mean you will pay for repairs to your car and/or the other vehicle or at least pay your own deductible and may result in having to obtain a “rental” car while yours is being repaired.

    5. maintain your car on a scheduled basis to prevent excessive wear and tear which, in the long run could mean paying hundreds of dollars in higher costs for repairs and potentially put you in a dangerous driving position (ie. worn tires won’t stop your car in a last minute or emergency situation, especially on rainy or snow days).

    6. use snow tires in winter: “all season” tires are NOT safe for winter driving and the term “all season” is a marketing gimmick. When the temperature gets below a certain point summer or “all season” tires do not grip the road properly and put you at risk of not stopping safely. You can spend $1000 on winter tires or risk having a $3,000, $4,000 or $5,000 accident.

    7. always watch your dashboard gauges and know when your car may be running hot or be low on gas: a hot engine should not be running as it will damage the motor very quickly resulting in major costs for repair; and if you run out of gas because you’re not keeping an eye on your gas gauge you may need to call for help to get gas and that’s a waste of your time and your money.

  4. Claude

    Where you live matters greatly.

    I moved from Edmonton to Toronto, same car, same insurance company, same coverage. 4 times the premium in Ontario.

  5. Bob

    Jim, you got me, email suggested that you had info on reducing my car insurance.
    As you said in your email: “would love to hear your feedback”.
    Jim, your article on car insurance said nothing.
    A waste of my time.

  6. Polly

    The article has some general comments but for a couple, I’ve had the opposite experience:

    – “Not surprisingly, the longer your daily commute, the more you’ll pay in premiums.”
    We lived north of Stony Plain, a 40 km commute to work in downtown Edmonton. We moved to Edm, 5 km from work. Premiums increased because we were now living in the city vs rural area — even though we were driving to the same place on the same roads, just a shorter distance. Apparently, we were at a higher risk for claims living in the higher density locale.

    – “Before you trade in your old vehicle for a new one, consider your premiums. The report found a 2016 vehicle costs nearly $800 more in a year to insure versus a vehicle that’s 10 years old.”
    When my dad agreed to give up driving, we kept his older vehicle and drove him wherever he wanted, in his car. It cost almost as much to insure as my 4 yr old car. The reason? Insurance co said if there was an accident in the older car, they’d probably be paying significantly more for injuries or death; newer cars have better safety features, airbags etc.

    These examples both happened in the past, and the policies may have changed now. But it’s just common sense to shop around … we are with a different insurer now.

    • Claude Mayrand


      Why have collision coverage on an old car?

      They charge a lot for not replacing or fixing the car – they’ll write it off.

      Even when they allow repairs, the deductible, the new increased premiums make no sense.

      For me, not having collision coverage, is an incentive to be more careful and not be the cause of a collision.

  7. Bob Turnbull

    HI Jim. I really enjoy receiving your emails as most offer some real information. I have to agree with some of the other comments that this particular piece lacked real substance. The thing about Ottawa paying the highest rates and then further in the article saying it is cheaper also confused me.

  8. Eldon Gaw

    Hi there, first, let me say that I Am an insurance broker and have over 30 years of experience behind me, and a license that says I can actually speak to this topic. I would hire any one of your people that commented on your article, before even remotely considering an application from you. Your readers are wise beyond their years and everyone read three conflicting statements about the rates in Ottawa VS the rates in Toronto and London.
    Many years ago we just needed to know 5 pieces of information to supply your insurance rate. Territory, where you lived and operated your car, drivers class which for drivers under 25 meant age and sex, and over 25 how you used your car, for example was it a “pleasure” use veh, or, did you commute with it and how far, or did you use it for your business pursuits, your driving record, how long had you been licensed, did you take a driver’s ed course if you are fairly newly licensed, do you have insurance history and how long, does it include any kind of claims or convictions, and exactly what kind of vehicle do you own.. later on insurers started to add discounts for things like multi vehicles on the same policy, and combined policies like home and auto. Just like absolutely everything, things change, and the perceived safety of the car played a big part, as did many other factors. Now, apparently insurers look at over 100 “touch points” to develop rates and determine discounts or surcharges. Almost every insurer now uses one or more form of software to rate a driver or drivers of a vehicle, and yes with your permission they can draw a “soft” credit score too. The list continues to grow every year of data we require to properly cast an estimated premium and yes, for sure all insurers must provide a discount for winter tires as one of your most informed readers mentioned. One thing that still lingers on is the misconception that “colour” plays a part but no, it does not, and as far back as I can remember people with bright red cars paid exactly the same as if they had grey ones!! It seems that many of your readers hold your information high with value for much of your previous editions. I am saddened that this time it sounds like you have disappointed some of them. Any tine you would like to chat about this very detailed subject, and would like to do so with me, I can be reached at Oegema Nicholson Insurance Brokers, here in Ottawa. 613 224 1455 Ext. 303 tjank you for writing the articlen at lease it got people talking about a subject that is to many people akin to having a root canal! Sincerely, Eldon Gaw.

  9. Henry Terlecki

    It’s not just which city you live in. Or city vs rural. Insurance companies will look at crime rates in your community/neighbourhood by postal code to determine your rates.

    Also be aware if you don’t have collision. You are covered BUT your car is not if you get hit by an uninsured driver.

  10. Mark

    Jim recommended the article which was written by Sean. Like many others mentioned the title of the article suggests that we would probably get valuable information or some that would at least would get us better rates but that was not the case at all. It just speaks about the obvious. On a positive note at least sparkled some of our fellow readers to give their insight, which by the way was much better than the article itself.

  11. James

    Notwithstanding the government going on and on about forcing rate drops from the industry, I have only ever experienced that on coverage on a vintage vehicle. My daily drivers (and my home insurance for that matter) simply go up every year by 3-5%. Note too, that the newer cars have more nannies looking after you and that affects your rate. I quoted a brand new Challenger SXT and it would be $100 less than my current 2010 Sonata. I plan on moving out of Toronto when I retire and my rates will likely go down by using , however, I fully expect that to be offset by higher property taxes out in some smaller centre. You just can’t win!

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