You might be on to something if you think that your insurance payments are taking up more and more of your monthly budget Rates a website that tracks prices online says that London has the second-highest cost increases in Ontario for both home and auto insurance Oshawa is the only city with higher costs.ca Jonathan Juha talks about what caused the recent price rises and what to expect in 2026.
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The average yearly cost of home and auto insurance in 2022 was $3,459 Last year it was $4,673 which is a 35% increase over the past four years.
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According to Rates.ca’s research only Oshawa had a higher rate of growth at 37% while Ottawa and London both had a rate of 35%.
Toronto residents’ insurance costs went up at a slower rate of 17 percent but they still have the highest overall annual costs at $5,693 a year.
Why are premiums going up so much?
David Mayer Rates.ca’s director of insurance and underwriting said that insurance costs have been going up across the province at a rate higher than inflation for the past few years.
He said that a number of things are going on but the main one is that the prices of cars parts and repairs are going up.
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Mayer said “Newer cars on the road today have all kinds of sensors cameras and advanced safety equipment This makes it more expensive to fix cars in general.”
Mayer said that the COVID-19 pandemic also had something to do with it.
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Advertisement 1 Article content “There were some rules that insurance companies had to follow to keep their rates stable during COVID.” But after the pandemic was over insurers basically started catching up so claims costs went up again he said “And as more people started driving back to work and getting back to their normal daily routines the costs of claims went up a lot.”
Why have prices in London gone up so much?
Mayer said that one of the main things that affects London rates is how quickly the city has grown in the last few years.
The most recent census data shows that London was the fastest-growing area in all of Ontario from 2016 to 2021 Growth has stayed high in the last few years.
Mayer said that “population growth leads to higher claims costs” while “some of the more rural areas of the province (which) just by nature of there being fewer people fewer vehicles less traffic density all that kind of thing” have lower claims costs “As London keeps growing some of the things that come with it are more thefts and car crashes which have all led to more claims.”
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Mayer said that the rise in car thefts in the city is also a factor with London reporting more than 500 stolen cars in 2023 alone.
Climate-related events have made it more expensive to insure homes on the home side For example in 2024 city hall got hundreds of calls from homeowners whose homes had flooded after a rainstorm that dropped as much as 75 millimeters of rain in two hours.
Mayer said “As climate change speeds up and these weather events happen more often home insurance premiums are starting to go up as well.”
Will this trend keep going?
Mayer said that after a few years of double-digit increases the cost of premiums has started to level off.
He said that the yearly costs seem to be on a path that could lead to increases of around five percent in 2026.
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He said “I do think we’re seeing some stabilization which is great for consumers.” “We’ve seen that in the last year and a half so I don’t think we’ll see those big double-digit increases in the near future.”
Mayer said that many people have chosen to lower their coverage to save money on insurance but he does not recommend this as a strategy Instead he tells people to look around for the best deal and other deals or ways to save money.
“We have a somewhat healthy competition environment in Ontario for car and home insurance so if your provider raises rates shop around because another provider may not have as deep an increase” he said.
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“Instead of lowering your coverage look for these discounts You never know when you might need that kind of coverage if you get into a serious accident.”
