Ontario drivers are increasing deductibles as auto insurance rates rise

One-third of polled Ontario drivers have changed their coverage or deductibles as auto insurance premiums continue to rise, finds a recent survey from LowestRates.ca.

Conducted in late September, the poll of 691 Ontario drivers who used LowestRates.ca’s auto insurance quoter found 33% of Ontario drivers changed their coverage or deductibles, making it the most common way to save on auto insurance.

In many cases, drivers scaled back on optional coverages such as collision or comprehensive insurance, particularly for older cars for which repair costs may outweigh the car’s value. For instance, LowestRates.ca data show a driver with a 10-year-old Honda Civic could save about $500 a year by removing these coverages, lowering annual premiums from $1,976 to $1,476. 

But drivers dropping optional coverages and increasing their deductibles may wind up paying for their decisions later on, brokers warn.

“Drivers are taking bigger risks to manage costs,” says Steven Harris, a licensed insurance broker and LowestRates.ca expert. “With used vehicles holding more value than before, cutting collision or comprehensive coverage can backfire. You might save a few hundred dollars a year but face thousands in repair or replacement costs after an accident.” 

Raising deductibles is another common strategy, but Harris cautions that the savings are not always worth it. “If a $500 [deductible] increase only cuts your premium by $20 a year, it could take decades to break even, and you’ll still pay more out of pocket if you file a claim.” 

Optional savings

With optionality coming to the Ontario auto insurance product on July 1, 2026, drivers may also decide to opt of certain accident benefit coverages. But optionality will only end up saving consumers about $100 yearly at most, brokers heard last week at IBAOcon in Niagara Falls, the Insurance Brokers Association of Ontario’s annual conference.

Early estimates show a consumer can save $75 a year by opting out of income replacement benefits and $12 yearly by opting out of non-earning benefits. Other optional benefits, such as death and dependant care benefits, amount to cents a year, IBAOcon attendees heard.

Auto insurance premiums in Ontario rose 14.7% year-over-year in the first quarter of 2025, according to Applied Systems’ quarterly Applied Rating Index. That jumped to 18.5% in Ontario in 2025 Q2, the highest increase in Canada.

LowestRates.ca’s survey finds 34% of 691 Ontario car owners report auto insurance to be ‘somewhat affordable,’ while 21% say it’s ‘not very affordable’ and 12% say it’s ‘not affordable’ at all.

Younger drivers are particularly hard-hit. A recent report from Rates.ca finds a 20-year-old new driver in Ontario could end up paying about $4,000 more annually for car insurance than a 35-year-old new driver with a similar profile.

Fourteen percent of drivers surveyed by LowestRates.ca said they joined usage-based insurance or telematics programs. Eighteen percent report completing a transportation ministry-approved driving course to qualify for a discount (only beneficial for brand-new drivers newly licensed through the graduated licensing program). Five percent list themselves as a secondary driver on someone else’s policy.

More than one-third (37%) are taking other measures to save money, which may include strategies such as bundling policies, installing anti-theft devices, using winter tires, or shopping around for better rates.

That said, more than four in 10 drivers are missing opportunities for cheaper auto insurance.

“While many Ontarians are taking proactive steps to reduce their premiums, 19% considered options but took no action, while 23% have not explored cost-saving options at all,” LowestRates.ca says. “Many drivers may not realize that simply asking their insurer about discounts — such as those for low mileage, good grades (for students), or loyalty — could lead to immediate financial rewards.”