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How Different Locations Affect Car Insurance Premiums?

Do you wonder how premiums for car insurance are determined? How do you know you are getting the best coverage at the best rate? Use a brokerage service with a proven track record for providing superior service, knowledge, and competitive pricing to be sure. My Insurance Broker in Ontario has developed strong, trusting relationships with most of the largest insurance companies in Canada.

This family business is 100% Canadian-owned and operated. Dedicated professionals that have years of experience, work together to ensure their clients receive the protection and the best customer service at the best possible price. Established in 2008, they service all southern Ontario, with their support centers in Toronto and Richmond Hill.

They are expanding their base by offering more online insurance options. Their goal is to be your only stop for home, auto, life, travel, and business insurance. Most of their offices are conveniently located in the Greater Toronto Area, and they continue to expand. As they grow, they will strive to maintain and nurture the partnerships and ties established in the communities they serve.

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How Auto Insurance Premiums Are Determined

While we can't discuss the various factors that affect premiums in all lines of business, let's explore some issues that can affect auto insurance premiums in Canada.

  • Address of the driver
  • Age of the driver
  • Driver's license
  • Driving history
  • Driving infractions
  • Gender of the driver
  • How much a driver drives
  • Type of vehicle

CLEAR or the Canadian Loss Experience Automobile Rating is a credible and accurate assessment of both the actual and expected claims loss history for each make, model, and year of a private passenger vehicle.

The CLEAR system uses insurance claims data. Insurers use CLEAR to determine the likelihood of a specific vehicle being involved in a claim and what that claim will potentially cost. CLEAR is one factor among many used to determine what your auto insurance premium will cost.

Other factors include your driving record and where you live. Every make and model of vehicle and light truck for every model year is organized according to assessed risk, expected claims frequency, cost, and the likelihood that it will be stolen.

The higher the CLEAR number, the higher the claims risk, and the lower the CLEAR number the lower claims risk, which is then reflected in lower insurance rates. Insurers use CLEAR to forecast future claims more accurately and price premiums accordingly for owners who buy vehicles that have fewer claims and only minor losses.

Here are additional factors that impact the cost of your car insurance premiums.

Traffic patterns in your area

The more vehicles on the roads and a greater number of intersections, the more likely you are to be involved in a collision. If you reside in a densely populated urban area with more traffic, you will pay higher premiums for car insurance.

How far you commute to work

Spending more time on the road means increased chances of a collision. If you move and have a longer commute to work than previously, your car insurance premium could increase.

Car theft

If you live in a neighborhood known to have a higher frequency of car theft claims, you will pay more for car insurance. But, there is good news. Installing an anti-theft device or after-market security system in your vehicle could result in an insurance premium reduction.

If your neighborhood is an area with lower risk you will pay less.

Provincial insurance regulation

Vehicle insurance is regulated at the provincial level, which means each province sets its own rules in regard to pricing, including how much flexibility there can be in rates across the province.

Each insurer must have its insurance rates approved by the governing body in the province it serves — the more heavily regulated the province is, the less flexibility there is in pricing. Relocating to a province with different restrictions may lead to a change in your car insurance premiums.

Weather conditions

Canada's weather has become extreme. Based on the Insurance Bureau of Canada statistics, severe weather caused $1.9 billion worth of damage in 2018 alone. The weather conditions, snow, ice, wildfires, wind storms all will affect the car insurance industry and the premiums consumers will pay.

Required types of car insurance

In Ontario, the minimum mandatory car insurance coverages are liability coverage, direct compensation, uninsured automobile coverage, and accident benefits coverages.

    Liability Coverage
  • If someone is injured or property damaged, payments are then made on your behalf.
  • Direct Compensation
  • Damages to your car are covered if you are not the party at fault.
  • Uninsured Automobile Coverage
  • Medical costs and damages are covered if it is the fault of an uninsured motorist.
  • Accident Benefits Coverage
  • Medical and other covered expenses are paid regardless of who is at fault.

Here is a more in-depth explanation of the types of car insurance available in Canada.


If you're partially or totally at fault in a car accident, you will need collision insurance added to your coverage to repair or replace your car. It's optional but strongly recommended if you have a new car, if you can't afford to pay for the repairs, or buy a new car based on your current financial situation.

This optional coverage has a deductible you will set to be paid before your insurer pays the rest. You set the deductible amount at the time the coverage is purchased.


Comprehensive coverage isn't only for when you're not driving your vehicle. In addition to fire, theft and vandalism, it covers flying objects and striking moving animals which are fairly common losses. Flying objects include rock, stones and other debris that could damage a vehicle.

While it's optional, it is recommended if you have a newer car or if you can't afford to repair or replace your vehicle. Comprehensive coverage requires a deductible, which is the amount you pay before your insurance provider pays the remainder.

You set how much of a deductible you will pay when you buy insurance. To save money on premium costs, set a higher deductible, but be ready to pay more out of pocket if you need to file a claim.


Third-party liability covers you from financial loss if you injure someone or damage their personal property. In most provinces, the minimum liability coverage is $200,000, except in Quebec, where the minimum liability coverage is $50,000. In general, people choose between $1-2 million on their policy. Without the extra coverage, you will pay out of pocket for the remainder.

Motorist protection or uninsured or underinsured

Uninsured motorist coverage is mandatory in all provinces except Alberta. It pays for medical bills that result from injuries you or family members sustain in an accident involving a driver without car insurance. If the uninsured driver can be identified, your vehicle damages will also be covered.

Bodily injury accident benefit or personal injury protection

If you suffer injuries from a collision with another vehicle, the accident benefit is another mandatory type of car insurance covering the medical costs beyond your provincial health insurance. Accident benefits will also pay for physiotherapy, dental care, or any at-home service.

What Is An Insurance Broker?

An insurance broker is a trained professional, licensed to sell insurance in the province of Ontario. Top-rated insurance brokers are well-trained, caring, and eager to provide you with competitively priced insurance coverage ensuring you are adequately protected in case of a loss.

Tips for choosing the best insurance brokers

  • They will offer excellent insurance protection and coverage
  • They will provide good value for your insurance dollar
  • They offer outstanding customer service
  • They develop strong and long-lasting relationships with their customers
  • Their brokerage will have professional and well-trained brokers

When you retain the services of a premier insurance broker, you are getting the best of everything. Top-rated brokers offer premium insurance products and services, along with a choice of insurance products and competitive pricing. In addition, their focus is entirely on you — the customer.

Who Do The Best Insurance Brokers Represent?

Brokers represent the customer. They have the customer's best interests at heart and they need total focus. The best brokers sell the products of many insurance companies across Canada, ensuring the customer gets several price options and the ability to choose from a variety of coverages and money-saving discounts they may qualify for.

Difference Between an Insurance Agent and an Insurance Broker

The main difference between insurance brokers and insurance agents is that brokers can shop around to find their customers competitive prices and coverages where an agent only shops at one company. Or you can buy insurance directly from a company.

But, the best and preferred choice is to shop with an insurance broker representing several insurance companies to provide customers with alternatives to choose from among various insurance products and prices. Insurance brokers work for the customer. They provide independent advice, expertise, and choices.

They will discuss options that are available to you and help you choose which insurance is best. Also, and most importantly, if you need to file a claim, your insurance broker will look after your interests, not the insurance company's interests. They are independent, and the best insurance brokers are on your side!

To summarize, using a broker for all your insurance needs is the most intelligent decision. And the one to use is My Insurance Broker! Regardless of your location, they can help with all your insurance needs. Comparing the average car insurance rates Ontario has the highest cost at $1,920, compared to the Canadian average of $1,320. However, you can be sure the professionals at My Insurance Broker will endeavor to find you the best rate available.

As discussed, before moving to a new location, you may want to check with My Insurance Broker to determine if the move will affect your premiums. If it does and the cost is too high, My Insurance Broker will shop around for the most comprehensive coverage with the most affordable price available on the market today. Contact us today — you will be glad you did!

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