Within the current boundaries of the City of Toronto, there are 102 postal code groups (first 3 letters) that identify an area or neighbourhood, and can affect the premium you pay for auto insurance. Of all the postal codes, those in Scarborough are the most expensive, with 16 of the 17 Scarborough postal codes paying more than any other part of the city. Meanwhile 8 of 12 postal code groups in Etobicoke pay the lowest rates in the city.
A lot is made about how different cities pay more or less for car insurance, but the fact is that auto insurance prices are not really affected by the city you live in. It’s much more specific than that. It’s your postal code. Specifically the first 3 numbers. Within the City of Toronto, there are 102 postal code groups. We used our instant auto insurance quoter to run quotes, for an imaginary driver, in each of the groups. Here’s what we found:
Cost of Toronto auto insurance by neighborhood
Sharlene, 37, Scarborough
Sharlene is a 37-year-old single female, with 1 minor ticket. She drives a 2019 Jeep Cherokee Sport 4DR 4WD.
Key findings
- Scarborough is the most expensive part of the city for auto insurance. Drivers with a Scarborough postal code pay 37% more than drivers in the most affordable parts of the city.
- Etobicoke, generally, seems to be the most affordable part of Toronto for auto insurance. 8 of 12 postal code groups in Etobicoke pay the lowest rates in the entire city, almost 10% cheaper than the next most affordable areas.
Why the big difference?
When we talk generally about why drivers in a big city like Toronto pay more than people in smaller cities and towns across the province, we tend to focus on population density and volume of traffic. These arguments don’t really hold when comparing different areas of the city.
But the fact is that all rates in the province of Ontario must be approved by the FSRA, and insurance companies submit past claims data to justify future rates. That means that if drivers in your postal code pay more, it’s because drivers in your postal code have made more claims (or costlier claims) in the past. These higher claims costs can be related to traffic conditions in the area, but also to crime, specifically car theft and insurance fraud.
What a quote actually looks like
Note that the above rates don’t necessarily reflect what drivers are currently paying. They represent the best rate that one driver would be offered by one of M&W’s insurance company partners at the time of writing. A driver with different circumstances (different age, different driving record etc.) would get completely different rates.
To give you a sense of what an insurance broker sees when you call them for a quote, and what we did to determine what the best price would be for Sharlene in each neighbourhood, here are the actual quotes that we generated for Sharlene with a postal code starting with “M2N” in North York:
Sharlene, moves to North York (‘M2N’ postal code)
Sharlene is a 37-year-old single female, with 1 minor ticket. She drives a 2019 Jeep Cherokee Sport 4DR 4WD.
Sharlene moves to North York. Here are her insurance quotes:
| Company | 12 Months |
|---|---|
| Insurance Company #1 | $2,044 |
| Insurance Company #2 | $2,482 |
| Insurance Company #3 | $2,543 |
| Insurance Company #4 | $3,068 |
| Insurance Company #5 | $3,299 |
| Insurance Company #6 | $3,495 |
| Insurance Company #7 | $3,501 |
| Insurance Company #8 | $3,503 |
| Insurance Company #9 | $3,520 |
| Insurance Company #10 | $3,717 |
| Insurance Company #11 | $4,298 |
| Insurance Company #12 | $5,426 |
| Insurance Company #13 | $5,437 |
In most cases, customers choose whichever rate is the lowest, but in some instances, if two of the quoted rates are comparable (within $50), we might recommend a slightly more expensive option if that insurer is offering better terms related to accident forgiveness, waiver of depreciation etc.
How to get the best rate
Most of us are not going to move just to get cheaper car insurance, but if you happen to live in a postal code that’s more expensive than most, there are lots of things you can still do to keep your rate as low as possible.
- Don’t lie about where you live – This is a really bad idea. You may get a cheaper rate in the moment, but there are lots of ways to be found out, especially after an accident, and that could void your coverage, and then send your rate through the roof.
- Shop with a broker – As you see above, when you call a broker like M&W, you get multiple quotes, and that increases your chances of getting the best deal around.
- Bundle up – Most insurers will give you a 10-15% multi-line discount if you also insure your house, apartment or motorcycle with them.
- Get married – OK, wait, we’re not telling you to get married to save on auto insurance. But if you happen to be married, you will pay a little less.
- Drive safely – Sharlene, above, isn’t getting the best rates she could, because she has a ticket on her record. One minor ticket might just add 10% to your rate. After that, or if you have an at-fault claim, it gets really expensive.
- Telematics – If you really need to pay less and you’re willing to prove you’re a safe driver, signing up for a telematics program and having an app or device that tracks how you drive, could save you as much as 25%.
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