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February 8, 2019

Good morning Cornwall! You’re now paying $470 more for auto insurance

3 min read


There’s been lots of talk about how unfair auto insurance rates are for Toronto-area drivers, and a number of politicians have come out to suggest that your postal code should no longer be used to help determine what you pay for your car insurance.

So what would that mean? Well, if your postal code were removed as an insurance rating factor, then presumably every city, town, hamlet and outpost in Ontario would end up paying, on average, about the same as the rest of the province. That doesn’t mean that every driver would pay the same. You’d still pay more if you have tickets or at-fault accidents, but across a given region, you’d pay no more on average than any other region.

Hard to say exactly how that would play out in the future, but using FSCO data from 2012 to 2106, it means that every region in Ontario would pay about the provincial average. That’s $1,502.

That sounds great if you’re in Toronto, where the average driver pays $2,041 a year. That’s a savings of almost $540! Kudos to the politicians for their vision and fair-mindedness.

But wait a minute. What about the rest of the province? What about Cornwall? Our elected leaders presumably represent all of us, no? Even Cornwall. Well, from 2012 to 2016, drivers living in Cornwall paid, on average, about $1,027 a year for their car insurance. Hmmmn. If postal codes went bye-bye, they would also presumably pay the provincial average of $1,502. A 46% hike. Ouch!

Territory Avg. premium per vehicle Avg. claim cost per vehicle
Brantford, Guelph, Kitchener-Waterloo, Cambridge 1,356.19 894.09
Cornwall 1,027.70 668.87
Grey-Bruce, lake Simcoe and Parry Sound, Muskoka, Haliburton 1,276.33 947.50
Halton, Hamilton-Wentworth 1,508.38 981.27
Lake Erie 1,288.10 854.04
Lanark – Upper Ottawa and Southeastern 1,023.20 662.27
London 1,475.15 1,069.06
Niagara Falls 1,385.33 804.88
Northwestern Ontario 1,063.08 686.73
Oshawa, Aurora, Newmarket, Orangeville 1,529.51 1,073.40
Ottawa 1,123.24 867.60
Peterborough, Lindsay, Port Hope, Cobourg, Trenton, Belleville, Kingston and Lake Ontario – Kawartha 1,063.75 708.88
Sarnia 1,186.42 711.93
St Catharines – Lincoln 1,299.73 768.23
Stratford, Woodstock, Lake Huron 1,234.09 830.03
Sudbury and Northeastern Ontario, Sault Ste. Marie, Manitoulin island 1,117.67 718.00
Thunder Bay and North Bay 1,141.09 858.78
Toronto, Markham, Richmond Hill, Vaughan – Peel 2,041.44 1,399.90
Windsor and Essex 1,399.62 915.48
ONTARIO 1,501.93 1,025.49

What’s fair for you ain’t fair for me

A $470 increase would certainly ruffle some feathers in Cornwall, but then our Toronto friends could say that Cornwall’s been benefitting from unfairly LOW rates for years, paying 32% less than the provincial average for at least five years and probably much longer. So, to heck with Cornwall! Progress marches on! You have to break a few eggs to make an omelette.

That’s just one way to define fairness though. The other is to say that it’s fair for people who are more likely to make claims to pay higher premiums. So, regardless of how safe a driver I am, if I live in a city like Cornwall, with 115,000 other cars and trucks that I could possibly crash into, should I pay as much as someone who lives in a city with, say, 2.1 million? To put it in simpler terms, if I’m driving down a street with 200 other cars, wouldn’t I feel a lot safer if someone magically removed 190 of them?

And the claims numbers bear this out. The average spent on claims per vehicle in Cornwall is $669 a year. In Toronto, it’s $1,400! That’s more than double the cost! And not to nitpick, but Torontonians don’t quite pay twice what Cornwallers pay. To be fair to Cornwall in proportion to claims costs, Torontonians should really pay a little more. About $110 a year, in fact.

Uhhh, that’s not gonna fly.

Finally, a win-win scenario

Ultimately, the only way everyone can be happy is if every region in Ontario gets the lowest rate. So, between 2012 and 2016, a territory defined as “Lanark – Upper Ottawa and Southeastern districts” had the lowest average auto insurance rates in Ontario, $1,023 a year. Let’s just say that from now on, everybody pays that.

So glad that we could come to an understanding. Everybody pays $1,023 a year for car insurance. Case closed!

Average claim cost per vehicle across Ontario: $1,025.

OK, who can we ask for 2 bucks? Isn’t Ottawa part of Ontario? Maybe they can raise taxes to pay for auto insurance fairness…

With any product, the price will be a combination of input costs and profit. With insurance profits are about the same as most any other industry, and administration costs are about the same too. The difference is the claims costs, and that’s why (deep breath) it’s fair for drivers in some regions to pay more than drivers in other regions.

Yeah, you heard right. Sorry Toronto. Love the Raptors though. #WeTheNorth #TorontoTheGood

Look, we really do love Toronto. Mitch is based in Whitby, which means we pay the second-highest car insurance rates in the province, and a lot of our team lives in Toronto. The fact is that there are pros and cons to living in the big city, and cost is one of the cons. Fair is fair. Cornwall doesn’t have the CN Tower, underground shopping or the Leafs. If you live in the GTA, give Mitch a call. With about 40 insurance companies to choose from, we’ll make sure they treat you fairly and give you the best possible rate.

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