Car insurance premiums in Canada have climbed 36.4% over the decade to 2024, according to Statistics Canada data analysed by InsuranceXpert. For someone in Ontario paying the provincial average, that’s roughly £550 more per year than a decade ago — money that comes straight out of a household budget already feeling the pinch from higher costs everywhere else. The jump in 2024 alone was 8.7%, followed by another 5.2% increase in 2025.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Three forces are driving this: auto theft, vehicle repair costs, and extreme weather. Each one compounds the others, and together they’ve pushed insurers’ claims costs to a point where the industry barely breaks even on auto coverage. The good news is that rate increases are slowing — but the picture varies wildly depending on where you live, what you drive, and how you use it. Here’s what you actually need to know.
What the loss ratio tells you about your next renewal
The single most important number to understand is the loss ratio — the percentage of premium dollars that insurers pay out in claims.
When the loss ratio climbs, insurers raise premiums to try to get back to profitability. The industry’s return on equity fell to 9.1% in 2023, its lowest point, before recovering to 12.6% in 2024. What I tend to notice is that most people think their own driving record is all that matters for their premium. In reality, systemic costs — theft, repairs, weather — are doing most of the heavy lifting. A clean record doesn’t protect you from a rising tide.
What premiums actually cost, province by province
Where you live is the single biggest factor in what you pay. Ontario’s average premium of £2,068 in 2024 is nearly double Quebec’s £1,044. The gap comes down to regulation, risk concentration, and how claims are handled.
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| Province | Avg Annual Premium (2024) | Key Factor |
|---|---|---|
| Ontario | £2,068 | Highest theft claims; dense traffic; high litigation costs |
| Alberta | £1,818 | Second-highest; 2025 rate cap at 7.5% for good drivers |
| British Columbia | £1,522 | Public insurer (ICBC); basic coverage not directly comparable |
| Quebec | £1,044 | Public plan (SAAQ) covers injury; private covers only vehicle damage |
Beyond province, your age, driving record, parking location, vehicle type, and annual kilometres all matter. Young drivers aged 15 to 24 are involved in road crashes far out of proportion to their share of the population, which is why their premiums are the highest. Making sure your vehicle is valued correctly for your policy can prevent you from overpaying for coverage you don’t need.
Where people get tripped up
Ignoring the theft discount
Most insurers offer a credit for anti-theft devices or tracking systems, but many drivers don’t ask. The research shows that auto theft is the single biggest cost driver nationally, and Ontario’s comprehensive claims ratio of 190% means insurers are desperate to reduce theft risk. Installing an approved immobiliser or tracking device can lower your comprehensive premium. The fix is simple: before renewal, call your broker or insurer and ask which devices they recognise. If you’re unsure about what your policy covers, a legal service can help clarify the fine print.
Assuming your driving record is all that matters
I’ve spoken to drivers with spotless records who were shocked at their renewal. The loss ratio of 90.4% tells you why: systemic costs — theft, repairs, weather — now drive premiums more than individual behaviour. Even if you’ve never made a claim, you’re still paying for the £1.5 billion in theft claims and the £8.6 billion in extreme weather claims from 2024. The practical move is to focus on what you can control: mileage, vehicle choice, parking location, and available discounts.
Not reviewing your coverage at renewal
Vehicle prices have changed dramatically. New-vehicle median prices rose 61.5% and used-vehicle prices rose 82.2% from 2019 to 2024. If you haven’t adjusted your coverage limits in a couple of years, you could be underinsured or overpaying. Walk through your policy line by line: is your vehicle’s value still accurate? Do you still need collision coverage on an older car? Are you paying for rental reimbursement you never use? A 15-minute review can save hundreds.
How to handle your renewal like a pro
Start with a coverage check, not a price comparison
Most people jump straight to shopping for a lower price. That’s backwards. First, confirm your policy reflects how you actually use the vehicle today. If you’re working from home and driving less, your mileage-based premium should be lower. If you’ve moved to a neighbourhood with lower theft rates, that should be reflected. The same principle applies to other financial products — aligning coverage with actual use is the fastest way to cut costs without reducing protection.
Ask about every discount you qualify for
Bundle home and auto with the same carrier where it makes sense. Ask about anti-theft device credits, low-mileage discounts, automatic payment discounts, and loyalty discounts. Telematics — usage-based insurance that tracks your driving — can cut a careful driver’s premium by 25% to 30%, according to the research. The Canadian telematics market was worth about £1.98 billion in 2025 and is growing more than 20% a year.
- 1Review your current coverageCheck your vehicle value, mileage, and parking location against what’s on file. Correct any errors before getting quotes.
- 2Compare quotes through an independent brokerAn independent brokerage can shop your risk across multiple carriers at once. You’ll see more options than going direct to one insurer.
- 3Ask about every discountBundle, telematics, anti-theft, low-mileage, automatic payment — ask for each one by name. If you don’t ask, you won’t get it.
- 4Lock in the best rate before renewalStart 30 days before your renewal date. Most insurers require notice to switch, and rates can change month to month.
What’s changing in 2026 and 2027
Alberta’s new Care-First system takes effect in January 2027, with a 5% average cap on rate increases and a 10% cap for any individual driver. That’s a significant shift in a province where premiums are the second-highest in the country. Ontario’s rate increases are already slowing — the rate-of-increase fell 2.6 points between late 2024 and early 2025, and another 1.2 points by mid-2025. Theft also dropped 17% in the first half of 2024 compared to the same period in 2023, which could ease pressure on comprehensive premiums. But extreme weather claims are still climbing — 2024 was the costliest year on record at over £8.6 billion — and that keeps upward pressure on the system.
Frequently asked questions
Why is my premium going up even though I haven’t had an accident? ▾
Will switching insurers lower my rate? ▾
Is telematics worth it? ▾
What’s the cheapest province for car insurance? ▾
Will rates keep going up? ▾
How do I know if I’m overpaying? ▾
The bottom line on where premiums are headed
The cost pressures that drove premiums up 36.4% over the past decade aren’t going away overnight. Theft is down 17% in early 2024, which helps, but extreme weather is getting worse and vehicles are getting more expensive to repair. What’s changing is the pace. Rate increases are slowing in Ontario, Alberta is capping them from 2027, and telematics is giving careful drivers a way to opt out of the average. The next few years will likely feel less painful than the last few, but the underlying trend is still upward.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Essential Tips for Adding Dependents to Your Health Insurance in Canada.
Sources and Further Reading
The Difference Between Replacement Cost and Actual Cash Value — Understanding how your vehicle is valued can help you avoid overpaying for coverage.
Maximize Your Savings with Tax-Efficient Investments in Canada — Once you’ve sorted your insurance costs, the next step is making your money work harder.
InsuranceXpert (2025). Car Insurance Statistics in Canada. 🔗
Statistics Canada (2025). Impacts of rising costs and claims on personal automobile insurance profitability and consumers in Canada. 🔗
BrokerUnion (2026). Why Canadian Insurance Premiums Are Rising. 🔗
Statistics Canada (2026). Insurance in Canada: What is driving premiums higher. 🔗