Brampton is Ontario's most expensive city for auto insurance – what's behind the surge?

Premiums up 37% from 2021

Brampton is Ontario's most expensive city for auto insurance – what's behind the surge?

Insurance News

By Mika Pangilinan

Brampton has been identified as Ontario’s most expensive city for auto insurance.

In a recent report detailing premium increases across the province, comparison site RATESDOTCA found that Brampton premiums have increased 37% from 2021.

Brampton’s estimated average premium for 2023 sat at $2,707, surging past the province-wide average of $1,744.

Several factors have contributed to the rise in auto insurance rates across Ontario, according to RATESDOTCA insurance expert Daniel Ivans, including a short supply of available policies, a surge in car theft cases, and the overall impact of inflation.

However, when it comes to Brampton, the higher costs can be traced back to specific local circumstances.

Fred Lazar, an associate professor of economics at York University, pointed to the higher rate of vehicle usage within the city.

“Their jobs are likely to be a long distance from where they live,” Lazar told the Toronto Star. “And there’s really dreadful public transit; it’s not an option. This forces them to drive a lot more on average than typical drivers in Ontario, and that pushes up their rates.”

According to Lazar, insurers consider the frequency of driving as one of the factors in determining the probability of accidents. In the case of Brampton, drivers spend a significant percentage of their annual kilometers on highways, where people tend to travel at higher speeds.

“If they are involved in an accident, it’s going to be much more costly than anyone whose driving is limited within Toronto,” said Lazar.

In fact, the RATESDOTCA report also revealed that the claims typically filed in Brampton tend to be the most expensive types.

“If I was to pull someone’s history in Brampton, I’m far more likely to see injury claims,” said RATESDOTCA expert Ivans. “[Insurers are] not worried about the car repairs. They're worried about accident claims.”

A spokesperson with the Insurance Bureau of Canada echoed this sentiment.

“Premiums follow claims costs,” the spokesperson told Toronto Star. “Where claims costs are high, premiums will follow. In Brampton for example, in 2021, auto claims occurred 25% more often and were 30% more expensive than the provincial average.”

What are your thoughts on this story? Feel free to comment below.

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