Why car insurance is so expensive in ontario

We all know car insurance in Ontario is expensive, and that’s why.

On average, Canadian insurers pay both claims and revenue. Insurance fraud, increasingly severe weather, and a handful of secondary factors have pushed up the cost of insurance in Ontario over the past two decades.

that’s how it happened.

insurance fraud in ontario drives up rates

Insurance fraud costs $1.6 billion each year, which equates to approximately $165 in additional insurance paid by each of Ontario’s 9.7 million drivers every 365 days. It’s also worth noting that insurers have paid out $1.02 for every $1 they made in 2016. They’re not making as much profit as we tend to think!

Insurance fraud in Ontario is a major contributor to increased rates, so it’s doubly important to get as much information as possible from the other driver in the event of an accident. Fraud is not just a problem in Ontario, but the province is feeling its effects more than other provinces due to its sheer size.

canada’s weather has become more extreme

according to the insurance bureau of canada, severe weather caused $1.9 billion worth of damage in 2018 alone. no single weather event caused an increase in related claims, but it has had a noticeable cumulative effect on the industry.

That same IBC report lists several important examples of Ontario’s extreme weather and how much they cost the insurance industry in 2018:

  • February storms that caused more than $25 million in damage
  • a storm in early April that caused more than $40 million in damage
  • an ice storm in mid-April that caused $190 million in damage, primarily in southwestern Ontario
  • a wind storm in early may that caused $380 million in damage in ontario (another $30 million within quebec)
  • a flood in toronto on August 7 causing $80 million in damage
  • a tornado in the ottawa (and gatineau) region caused $295 million in damage on September 21
  • That’s just for Ontario in 2018, but the rest of the country has also experienced its own severe weather and natural disasters in recent history:


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