How to Reduce Car Insurance Costs in Ontario

*This article is updated from its original version published on Oct. 15, 2021 

Auto insurance rates in Ontario remain some of the highest in Canada, especially in larger cities like Toronto and across the GTA. While factors like your driving history, vehicle type, and location all play a role in what you pay, there are still several practical ways to lower your premiums over time. 

Some savings come from discounts you may already qualify for. Others come from small changes to your driving habits or coverage choices.  

And starting July 1, 2026, Ontario drivers will also have more flexibility when it comes to certain optional coverages, which could create new opportunities to save. 

What's the average price of auto insurance in Ontario? 

According to our own data from 2025, the average annual car insurance premium in Ontario is $2,318. And in Toronto and the GTA, that average rises even higher, with an average of $2,810 according to data from FRSA. 

Why are auto insurance rates higher in Ontario? 

There are several reasons Ontario drivers tend to pay more for auto insurance than drivers in many other provinces. 

Some of the biggest factors include higher traffic density, more frequent distracted driving claims, expensive vehicle repair costs, and severe winter weather conditions. Urban areas also tend to experience higher rates of collisions and vehicle theft, both of which can increase premiums. 

While many of these factors are outside your control, there are still ways to make yourself a lower-risk driver in the eyes of insurers. 

If you’re looking for ways to reduce your auto insurance costs in Ontario, here are some of the most effective places to start.

New Ontario insurance changes could create savings opportunities 

Starting July 1, 2026, Ontario drivers will have more flexibility when choosing certain auto insurance coverages. 

Under the new rules, several accident benefits that were previously included automatically in standard policies will become optional. This should allow some drivers to lower their premiums by removing unnecessary coverage. 

At the same time, these benefits can provide important financial support after a serious accident, including income replacement and caregiver benefits. And lower premiums may also mean less protection if you are injured in a collision. 

For those reasons, it is important to fully understand what is being removed before making any changes to your policy. What works for one driver may not make sense for another, particularly for families or households that rely heavily on a vehicle for commuting or caregiving responsibilities. 

Reviewing these new options with an insurance advisor can help you decide whether adjusting your coverage makes sense for your particular budget and level of risk.  

Drive safely and keep a clean record 

Safe driving habits can make a significant difference in your insurance costs over time. 

Drivers with clean records will be viewed as lower risk by insurers, while traffic tickets, at-fault accidents, and licence suspensions can all lead to higher premiums. Some providers will offer substantial claims-free or conviction-free discounts for drivers who can show a strong driving history for several years. 

While safe driving will not reduce your rates overnight, avoiding violations and collisions is one of the most effective long-term ways to keep insurance costs under control. 

Go to driving school 

Completing a recognized driving school program can help new drivers save on insurance early. 

Insurance companies often offer discounts to drivers who complete approved training programs, as they are viewed as lower risk on the road. In most cases these discounts range from 5% to 15%. 

Driving school can also help drivers progress through Ontario’s graduated licensing system faster. New drivers who complete an approved course may be able to take their G2 license test after 8 months, instead of waiting the full 12 months.

Install winter tires 

Winter tires can improve traction, braking, and vehicle control during Ontario winters, particularly on icy or snow-covered roads. 

Many insurers offer discounts on their premiums for drivers who install winter tires, with 2% to 5% discounts often available. However, some providers may require the tires to be installed during specific months of the year in order to qualify. 

Beyond the insurance savings, winter tires may also help reduce the likelihood of winter-related collisions and claims. 

Reduce your driving time 

The more time you spend on the road, the greater your chances of being involved in an accident. Because of this, annual mileage is an important factor looked at by insurers when calculating premiums. 

If you are able to reduce how much you drive each year, you may qualify for lower rates. For some drivers, that could look like taking public transit a few days a week, walking or biking short distances, or carpooling when possible. 

Drivers who work remotely or on a hybrid schedule may also want to review their annual mileage with their insurer to ensure it still reflects their current driving habits. 

Bundle your insurance policies 

Bundling remains one of the most common ways Ontarians save on insurance. 

Typically this involves purchasing multiple policies from the same provider, for example combining your home and auto insurance coverage. 

While savings will vary among providers, bundling can often reduce your premium by as much as 10% to 15%. 

Good student and postsecondary discounts 

Some insurers offer discounts for students who maintain strong grades. 

Depending on the provider, students with an average of 80% or higher may qualify for a good student discount that can reduce premiums by up to 15%. 

There may also be savings available for postsecondary students who live away from home while attending college or university. And in some cases, parents can keep their child listed on the household policy at a reduced rate because the student is driving less frequently while away at school. 

Eligibility and discount amounts vary by insurer, so it is worth asking what programs are available. 

Retiree discounts 

If you’re a retiree, you may be leaving savings on the table.  

Since many retirees spend less time commuting and drive fewer kilometres each year, some insurers will offer retiree discounts to those with strong records. If your driving habits have changed recently due to retirement or even semi-retirement, it's worth asking your provider about the possibility of a discount here. 

Always double-check with your insurance provider 

No two insurance providers calculate rates the same way, and so the available discounts will vary significantly between companies. 

That’s why we always recommend you double-check your policy, and ask about any discounts you may qualify for. Even small savings in one or two areas can add up over time. 

It is also worth reviewing your coverage whenever your driving habits change, especially with the new Ontario insurance rules coming into effect this summer.