Apr 9, 2026
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You got your car insurance renewal again, and, no surprise, you're paying more, again. You’re not alone. According to Statistics Canada, average auto insurance premiums rose 8.7% by the end of 2024 (1), and that upward trend continued into 2025.
The reasons are real and compounding. Auto theft claims topped $1.5 billion in 2023, according to the Insurance Bureau of Canada (IBC), a national industry association representing Canada's private property and casualty insurers (2). Severe weather cost the Canadian insurance industry a record $8.5 billion in insured losses in 2024 (3). And the U.S. tariffs on vehicles and auto parts introduced in March 2025 are pushing repair costs even higher — costs that insurers will eventually pass on to policyholders.
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In Ontario, the average annual premium reached approximately $2,120 as of mid-2025, a 4.1% increase from the year before, according to the Financial Services Regulatory Authority of Ontario (FSRA). In Alberta and Atlantic Canada, where private insurers compete for your business, premiums are rising even faster (4).
But you’ve got your own budgetary pressures. To help, here’s what you can do to get the best coverage and premium when it’s time to renew your car insurance.
Why your renewal quote may no longer be your best option
No two insurers price the same driver the same way. One company may have had an unusually costly year in your region — flooding in Southern Ontario, hail in Calgary, a surge in theft claims in the GTA — and will pass those losses on to all its policyholders at renewal, regardless of your personal record. A competing insurer that didn't absorb those losses may price the same driver significantly lower.
That gap matters. Industry data show that comparing quotes from multiple providers can save Canadian drivers hundreds of dollars annually. Yet many drivers renew automatically, assuming loyalty earns them a better rate. In most cases, it doesn't.
If you're in a province with private insurance — Ontario, Alberta or Atlantic Canada — you can shop the market.
By using a comparison platform like Rates.ca, you could potentially save $500 or more by comparing 20+ quotes from top-rated auto insurance providers. Just answer a few basic questions, and Rates.ca will show you the most affordable deals in your area in as little as three minutes — from paying a hidden ‘loyalty tax’ to your current insurer. Not only is the process 100% free, but you could also potentially save 20% by bundling your auto and home insurance together.
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What you can actually control on your premium
Several factors affect your rate and are within your control.
Your deductible
The deductible is the amount you pay out of pocket before your insurance coverage applies. Choosing a higher deductible — say, $1,000 instead of $500 — directly lowers your premium. The tradeoff is that you'd pay more in the event of a claim, so only raise it to an amount you could realistically cover.
Your driving record
Insurers reward clean driving records. An at-fault accident or traffic conviction typically triggers a surcharge that can follow you for several years. Paying for a minor repair out of pocket, rather than filing a small claim, is sometimes the more cost-effective choice over a three-to-five-year horizon.
Bundling and multi-vehicle discounts
Combining your auto and home insurance with one provider — or insuring multiple vehicles under the same policy — typically unlocks discounts. According to insurance industry guidance, bundling can save 10% to 25% on premiums (5).
Paying annually
Many insurers add a monthly payment surcharge of 3% to 5% to cover administrative costs. Paying your annual premium in full up front eliminates that charge.
Considering a new car? Skip the dealership headache. Get pre-approved with MyAutoApproved before you even step onto a lot so you can shop with the confidence of a cash buyer. Start your 180-second application now.
Should you sign up for a telematics program?
Usage-based insurance (UBI) — sometimes called telematics — tracks your driving habits through a device or smartphone app and adjusts your premium based on real behaviour rather than demographic averages. The IBC notes that programs are voluntary and require your informed consent before any data is collected or shared.
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Telematics programs are currently available in Ontario, Alberta, Nova Scotia, New Brunswick and Prince Edward Island. For low-mileage drivers, remote workers or anyone who drives primarily in off-peak hours, the savings potential is meaningful. The catch is that the data you share is real — speeding, hard braking and late-night driving can count against you with some programs, so understand what your specific insurer measures before you opt in.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
One thing to be careful about before cutting coverage
The temptation when premiums rise is to strip back coverage. Don’t do this unless you fully examine the impact.
Comprehensive and collision coverage adds cost — but it also pays out if your vehicle is stolen, hit in a parking lot or damaged in a weather event. Given that auto theft and weather-related damage remain serious and systemic problems in Canada, dropping comprehensive coverage on a vehicle with significant replacement value could leave you exposed to a large out-of-pocket loss.
In Ontario, Direct Compensation Property Damage (DCPD) coverage — which pays for damage to your vehicle when another driver is at fault — became optional in 2024. Some drivers dropped it to save money. While removing this coverage does decrease your policy cost, it also means absorbing costs that were previously covered. Talk to your insurance broker to get a clear understanding of the risks.
Remember, before cutting any coverage, ask if you could realistically afford to replace or repair without insurance, as this tipping point is far more important than the monthly savings.
What to do before your next renewal
- Get at least three quotes from competing providers before you renew — not after
- Ask your broker specifically about multi-policy, multi-vehicle and loyalty discounts
- Review whether your deductible still makes sense given your savings and vehicle value
- Ask whether a telematics program is available and what it measures
- Check the IBC's free How Cars Measure Up tool before your next vehicle purchase — it scores Canadian models by their theft rate, repair costs and claims history, all of which affect your premium
Stop overpaying for insurance. Compare 20+ quotes on Rates.ca and potentially save $500+ on auto insurance.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Statistics Canada (1); Insurance Bureau of Canada (2); MyChoice.ca (3); LowestRates.ca (4); BrokerLink (5)
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Romana King is the Senior Editor at Money.ca. She writes for various publications, and her book -- House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth -- continues to be an Amazon bestseller. Since its publication in November 2021, this book has won five awards, including the New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award in 2022.
