Canadians are well aware that you cannot drive your car without car insurance – to do so is illegal and would result in hefty fines and getting your license suspended for at least a year.
With the costs of living expenses and car payments nowadays, knowing which provinces or territories charge the most expensive car insurance can be useful. Some may argue that this won’t make a dent in their bank accounts, but paying an average of $1,300 to $1,800 a year in car insurance alone can add up. This amount can be substantially lower or higher, depending on where you live.
Paying car insurance may seem trivial, but when you consider that you are insuring an asset that loses value over time, high car insurance premiums may not be worth it. You’d think that as your car gets older, the insurance premiums would get cheaper, but this isn’t always the case.
Sometimes, the cost of insurance on your car doesn’t go down as your car gets older. This can be due to the price and availability of spare parts and the rising cost of repairs. As some models get older, it may be harder to find spare parts for repairs.
That's why Insurance Business lists here the most expensive places for car insurance in Canada.
To help you make informed decisions on your car purchase and insurance, we’ll also provide information on the highest car insurance rates in Canada by province and which Canadian city has the highest car insurance premiums. So, let’s dive in and find out where car insurance is the most expensive and hope it’s not your locale.
Arranged from the most expensive to the cheapest, these are the five provinces that charge the most for car insurance:
Among all the provinces, Alberta tops the list as the most expensive place for car insurance premiums. The premiums you’ll pay here are also the third most expensive in all of Canada, having increased by $300 since 2015.
There was a time some years ago when Alberta decreed that they would have a limit to car insurance rate hikes of up to only 5% a year, but this was removed in 2019.
Although Nova Scotians have had lower premiums thanks to reforms in their car insurance rates, they are second in having the most expensive car insurance.
That's because a Nova Scotian’s driving history plays a major role in car insurance rates. Coverage can affect insurance premiums by up to 30%. However, compared to the rest of Canada, people in Nova Scotia file some of the fewest accident claims every year. There is a way to pay less for car insurance in this province: Nova Scotia recognizes and rewards safe drivers by charging them lower premiums.
Ontario holds the distinction of being one of the most populated provinces in Canada and the second most expensive place for car insurance. Industry experts have pinpointed the main cause of recent rate hikes in Ontario – the high frequency of insurance claims, lawsuits, and injuries.
In this heavily populated province, there are also numerous cases of insurance fraud and organized crime that affect private car insurance companies. But despite these factors, the biggest reason why Ontario’s car insurance rates are through the roof is because it has the highest number of drivers in the country.
This province used to have lower rates, but an uptick in the number of accidents due to distracted driving cases has spurred an increase in car insurance costs in recent years.
Despite the increase, paying auto insurance premiums in New Brunswick still only takes up about 2.8% of their citizens' after-tax income. This is the lowest percentage that car insurance takes, right behind Alberta. Insurance reforms in New Brunswick keep their car insurance premiums at the lower end of the spectrum. Like Nova Scotia, safe drivers are rewarded here with lower premiums.
This province has a relatively small population, but car insurance premiums there have seen some of the biggest increases in Canada.
Why is this? The “tort system” prevails here, making it possible to sue the driver who is at fault for other damages apart from the damage to a car. The driver who is not at fault can sue the other driver for any injuries they suffered, along with lost wages.
Another factor is that Newfoundland & Labrador only has private car insurance options, so the rates are competitive. The increase in rates here can be largely attributed to a rise in accident claims and lawsuits.
Canadians who are in the know are aware that Ontario is the most expensive place for car insurance in the country. Unfortunately, the cost of car insurance continues to rise, and most cities in the Greater Toronto Area (GTA) - Toronto included, pay more for car insurance.
In 2018, for instance, the average annual premium that drivers in Toronto paid was $1,473. Only two years later, the annual premium rose to $1,616, an increase of 9.7%.
About the only time that car owners in Ontario had some reprieve from the high annual premiums was during the pandemic. In 2020, Ontario’s insurance regulator, the Financial Services Regulatory Authority (FSRA), let provincial insurers offer rebates and discounts on their premiums.
This measure translated into $1 billion in savings for car owners, thereby cushioning the impact of the pandemic. It was only later that year that the FSRA allowed some insurance companies to increase their rates. According to Hellosafe, these are the cities with the highest rates in 2024:
|
Ranking |
City |
Province |
Car Insurance Type |
Median Car Insurance Premium |
|
1 |
Calgary |
Alberta |
Private |
$3,182 |
|
2 |
Edmonton |
Alberta |
Private |
$3,150 |
|
3 |
Halifax |
Nova Scotia |
Private |
$2,490 |
|
4 |
St. John’s |
Newfoundland & Labrador |
Private |
$2,340 |
|
5 |
Toronto |
Ontario |
Private |
$2,295 |
|
6 |
Moncton |
New Brunswick |
Private |
$2,247 |
|
7 |
Ottawa |
Ontario |
Private |
$2,190 |
|
8 |
Vancouver |
BC |
Public |
$1,841 |
|
9 |
Charlottetown |
PE Island |
Private |
$1,711 |
|
10 |
Winnipeg |
Manitoba |
Public |
$1,381 |
|
11 |
Saskatoon |
Saskatchewan |
Public |
$1,249 |
The frequency of car accidents directly impacts insurance premiums, often resulting in increased costs for the drivers involved. Rates can rise significantly based on:
To manage car insurance costs effectively, it’s imperative to understand these factors. Regardless of the insurer, drivers who are liable for an accident will often face higher insurance premiums.
Their premiums can increase by an average of 42% or as high as 45% if the driver is at fault. Even in cases where the driver is not at fault, insurance rates may still increase based on the claims. Insurance companies will categorize a driver based on statistics and increase premiums based on the driver’s accident history. These increases may still be imposed regardless of whether the driver is not at fault.
Some states do not allow for increased rates for drivers who are not at fault, making the computation of insurance pricing more complicated. However, over time, with a clean driving record post-accident, the cost of premiums for an individual may gradually decrease.
In Canada, government-mandated insurance is the predominant form of car insurance. Places like Manitoba, British Columbia, and Saskatchewan rely on provincially provided, more affordable insurance, but coverage is limited. Whether public or private car insurance dominates in a city or province, either of these can have varying effects like:
Government insurance is the most basic form of coverage and may not meet all of an individual car owner’s needs. Public insurance can help with regulatory compliance and give Canadians access to affordable car insurance, but this can also undermine private insurers. Cheaper public insurance discourages investment of private insurers and reduces the competitiveness of the car insurance industry.
Public insurance can cost provincial governments substantial amounts, calling for taxpayer subsidies to ensure it stays affordable and accessible. Many provinces struggle with keeping necessary coverage accessible and the financial sustainability of public insurance programs. The limited competition and innovation in public insurance can result in slower improvements in service and coverage options.
In provinces like Alberta and Ontario, residents must purchase private car insurance. This means residents have wider insurance coverage options at more competitive prices. More private insurers also mean more competition. This can drive innovation and result in different partial or full coverage options.
More competition can also translate into better prices for customers. This is because insurance companies have more incentive to provide better value and attract more businesses by offering insurance based on individual needs.
Healthy competition among private insurers can lead to rates that accurately reflect the true costs associated with risk and claims in the insurance market. Private insurers assess various factors to determine premiums. These include the driver's history, credit scores, and the type of vehicle owned.
As a result, individuals with better driving records and financial standing often qualify for lower rates. This further incentivizes responsible behavior in drivers and ultimately affects overall premium levels positively.
Various external factors also influence insurance rates in Canada, including the prices of vehicles, repairs, and inflation. The rising cost of living and increased expenses related to vehicle maintenance can push insurance rates higher across both public and private insurance systems. As vehicle parts and labor costs increase, insurers adjust their premiums to reflect these changes. This affects consumers throughout the country regardless of the insurance model.
Car insurance rates in Canada vary widely between provinces and territories due to a combination of factors, including:
Population density is vital in determining car insurance premiums. Urban areas with higher population concentrations have more traffic congestion and a greater frequency of accidents. These often lead to higher claims and subsequently higher insurance rates.
Rural areas with lower population densities tend to have fewer accidents and that’s why their residents often enjoy comparatively lower insurance costs.
Provinces and cities prone to auto theft tend to have elevated car insurance premiums. Areas with a high incidence of vehicle theft forces insurers to increase their rates to offset the risk of potential claims. Notably, in provinces like Ontario and British Columbia, there have been significant increases in theft rates, and the average premiums have since risen to match the trend.
The number and frequency of accidents in certain regions exert a great influence on car insurance costs. That's because insurers analyze historical claims data to assess the likelihood of claims. This leads to adjustments in premiums based on the claims experience of various locations. Provinces with higher accident rates (like Ontario and Alberta) have higher average premiums as insurance companies prepare for potential payouts.
Each province sets its own set of rules on car insurance, including those on setting the insurance rates. Ontario and BC, for example, have more stringent rules that can lead to higher insurance costs. The reason for this is both provinces have limited competition and mandatory coverage. As much as these measures help keep a balance in premium pricing, they also result in increased rates.
Disasters like forest fires and floods in an area can also jack up car insurance premiums. Insurers must account for these risks in certain areas and raise their rates or prices accordingly to meet the likelihood of insurance claims.
A younger, less experienced driver is charged higher premiums due to their lack of experience and increased accident risk. Drivers who also reside in urban areas with denser populations have a higher risk of accidents.
Knowing where the most expensive places for car insurance is in Canada can help you and your clients make informed decisions and find more affordable car insurance options. While it is easy to overlook the nuances of car insurance, acknowledging its effects on one’s financial health is indispensable.
With rising living costs everywhere, being proactive about research and understanding one's insurance environment can mean the difference between financially savvy decisions and costly ones. By analyzing personal circumstances along with provincial trends, Canadians can navigate the complexities of car insurance.
Car owners can also apply practical ways to find cheaper car insurance. For instance, did you know you can actually ask car insurers for discounts? Watch the video for more tips to get cheaper car insurance:
By knowing which areas have the most expensive car insurance, motorists can ultimately enhance their overall driving experience while having better control of their personal finances. Don’t forget that one of the best ways to control one’s finances is to enlist the services of some of the best insurance professionals.
Did you find the information on the most expensive places for car insurance helpful? Let us know in the comments.
