Market conditions

Market conditions are factors that continually change and influence the cost of auto insurance and the price you pay. FSRA is observing that several factors are driving up costs such as rising inflation and the impact it is having on items like auto parts. Another factor is that people are driving more and there are more cars on the road. FSRA will continue to actively monitor these conditions and the potential impacts they will have on auto insurance rates.

The impact of these factors may be widespread or specific to your local area. Examples of current market conditions affecting auto insurance premiums in Ontario include:



Your premium is affected by the increase in the price of goods and services over time. Insurers adjust premiums based on the expected cost of covering future auto insurance claims.

Based on Statistics Canada data, consumer prices increased by 8.1% year-over-year in June 2022. Furthermore, March 2022 saw significant year-over-year price increases for automotive parts, new vehicles and used vehicles.


Physical Damage

Physical damage costs

New technology has increased the cost of fixing vehicles. For example, most cars now have rear view cameras and sensors in their back bumper. This means the repair includes not just the bumper, but the technology in the bumper as well.

In the past 5 years, physical damage costs per claim increased by 22.5% and continues to increase at the speed of 7.4% per year. These increases can be explained by the rising price of automobile parts and escalating labour cost. 

Increased vehicle theft activities are also a driver of higher physical damage claims. Over the past 5 years, the amount of theft claims increased by 40%*. 

*Source: General Insurance Statistical Agency (GISA) exhibit AUTO7001/7011.


Drivers on the road

Drivers on the road

A change in how much we drive has an impact on premiums. For example, more cars on the road results in more collisions and higher claims costs.

There is a growing cost pressure in the auto insurance market as more vehicles are on the roads. Data shows that 2021 saw a 2% increase in the number of cars insured compared to 2020.

Furthermore, the latest cell phone mobility data shows that Ontarians’ driving behaviour is now trending towards pre-pandemic levels, meaning more drivers are on the road.


During the recent COVID pandemic, there were unprecedented changes in market conditions.  There was a significant drop in the number of collisions and claims because people were staying home and driving less. To address this, FSRA created pathways to enable insurers to quickly adjust their rates.

Through these pathways, auto insurance rates were reduced for many drivers in the province as insurers voluntarily gave back over $1.8B to policyholders. FSRA approved 108 emergency rate reductions and 45 emergency premium rebates as of April 2022. View private passenger automobile emergency relief for a list of all emergency rate reductions and rebates.

Other factors that impact your auto insurance premiums

By far, the largest percentage of auto insurance costs relate to the likelihood of being in a collision and paying out claims. Drivers with recent driving convictions, a history of at-fault claims or limited experience generally represent a higher risk than drivers with “clean” driving records and many years of driving experience. As a result, those drivers deemed to be a higher risk typically pay more.

Premium Breakdown