As auto insurance premiums continue to climb across Canada, drivers are feeling the strain more than ever. A clean driving record, once a reliable ticket to lower rates, no longer guarantees discounts, prompting many Canadians to reconsider their vehicle ownership and insurance options. With the financial landscape shifting, individuals like Alex Bourgeois are bracing for significant increases in their insurance costs as they navigate the complexities of car ownership.
Premiums Climb Nationally
The growing financial burden of auto insurance is evident, with the average Canadian now paying approximately £1,442 annually, according to recent data from Sonnet Insurance. In Ontario, insurance rates have surged by 18.9 per cent over the past five years, with the average premium for a 35-year-old male driver reaching £2,279, following a 4.1 per cent increase in the first half of 2025 as reported by MyChoice, a Toronto-based insurance technology firm. Alberta has not fared better, witnessing a staggering 26 per cent rise in rates over the same period, bringing premiums to an average of £1,239, with younger and novice drivers facing even steeper costs.
Matt Hands, vice-president of insurance at Ratehub.ca, points out that the rising costs are leading many Canadians to delay purchasing new vehicles or opt for older models. “We know that people can’t afford to own their own vehicles in this economy,” he explains. “People are buying older vehicles or holding onto their vehicles longer.”
The Factors Behind the Increases
The factors driving these insurance hikes are multifaceted. Legal costs and lawsuits associated with insurance claims have soared by 31 per cent since 2018, according to Thinkinsure. This has resulted in a challenging environment for insurers, particularly in Western Canada, where significant losses have forced the implementation of rate caps in Alberta, reducing the number of available carriers in the province.
In Ontario, the situation is exacerbated by severe weather events, rising auto theft rates, and escalating repair costs, all of which have contributed to increased premiums at a time when many Canadians are struggling financially. Vitalii Starov, vice-president of product growth at MyChoice, notes that the overall cost of living has risen, compounding the difficulties faced by consumers.
Navigating the Insurance Landscape
For many drivers, especially young and new ones, the rising costs have made car ownership a daunting prospect. Dan Richards, an associate professor at York University, notes that numerous students express concerns over the affordability of owning a vehicle. Many young drivers find ways to mitigate these expenses by being secondary drivers on their parents’ insurance or opting for minimal coverage that excludes comprehensive options.
As premiums rise, consumers are encouraged to shop around for better rates. Richards advises individuals to gather quotes from various providers, particularly if they notice their current insurer increasing rates despite a clean driving record. Bundling insurance services, such as home and auto policies, can also lead to significant savings. Additionally, raising deductibles can lower monthly premiums, although this comes with the caveat of reduced coverage in the event of a claim.
For those in the market for a new vehicle, opting for models known for lower insurance premiums can also help manage costs. Recent findings from MyChoice indicate that the Ford Transit, costing £1,008 annually to insure, is among the most affordable options, while luxury vehicles like the Porsche Panamera Turbo S and Maserati Quattroporte rank as some of the most expensive to insure.
The Role of Telematics
For drivers seeking discounts, telematics offers a potential solution. This technology involves installing a device that monitors driving behaviour, allowing insurers to offer discounts of between 5 to 30 per cent based on safe driving practices. However, there is a risk that aggressive driving habits, such as rapid acceleration or hard braking, could lead to higher rates instead.
As Bourgeois prepares to purchase a vehicle for his daughter, he plans to consult his insurance broker to find the best possible rates. He is also encouraging her to seek part-time employment to contribute towards her driving expenses, highlighting the ongoing financial challenges faced by families in the current economy.
Why it Matters
The rising cost of auto insurance is not just a financial headache for Canadians; it represents a broader trend of increasing living expenses that could deter individuals from car ownership altogether. As families grapple with these pressures, the implications extend beyond personal finances to affect mobility, employment opportunities, and overall quality of life. In a time when many are already struggling to make ends meet, the burden of rising insurance premiums underscores the urgent need for systemic reforms within the insurance industry and broader economic support for Canadians.
