Why some Ontarians pay out of pocket for minor collisions

Rising auto insurance premiums in Ontario have some vehicle owners opting to pay for minor collisions out of pocket rather than reporting them to insurers.

“With premiums where they are, many assume reporting a minor collision will automatically raise their rate. That isn’t necessarily true in Ontario,” says Steven Harris, a licensed insurance broker who provides commentary to LowestRates.ca.

“There are specific protections for qualifying minor accidents, and it’s important to understand how those rules apply before making a decision.”

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Here are some things parties to a minor accident should consider before handling it themselves: 

• Sometimes it’s illegal not to report an accident to police. This includes cases of injury or death or if there is “combined property damage exceeding $5,000 across all vehicles or property involved,” Harris notes. This threshold is separate from an insurer’s reporting requirements. 
• A driver reporting an accident does not mean they’ve filed a claim. “Notifying an insurer about an accident is different from submitting a claim for payment,” he adds. “An incident can be reported to keep the insurer informed without requesting reimbursement.” 
• Ontario has a protection rule for minor accidents, which means insurers can’t raise premiums for “one qualifying minor at-fault accident if there are no injuries, no insurer payout, and damage is under $2,000 per vehicle and paid by the at-fault driver,” says Harris. The protection applies once every three years. 
• Injuries aren’t always evident immediately following an accident. In Ontario, an injured person has two years bring a claim. If a driver reports the accident, it creates a paper trail that can be relied upon if anyone involved reports an injury after the fact. 
• Minor accidents that qualify for Ontario’s protection rule might not result in a surcharge with a client’s current insurer. At-fault incidents, however, can still appear on claims history reporting. When clients change coverage the new insurer may factor that into pricing. 

“Understanding the thresholds, the protections in place, and how an accident is recorded provides far more clarity than reacting in the moment,” says Harris. 

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What’s more, a new Rates.ca report finds auto insurance premiums make up the lion’s share of insurance costs for households in Toronto (70%) and Hamilton (65%).

“Between 2022 and 2025, the average auto premium increased from $3,453 to $3,997 in Toronto and from $2,531 to $3,096 in Hamilton,” the rate aggregator says in a press release. For Toronto, when auto and home premiums are combined, they jumped from $4,850 annually in 2022 to $5,693 in 2025. 

“Insurance prices reflect the risks insurers see in each market,” says Daniel Ivans, who provides expert commentary for Rates.ca. “In cities like Toronto and Hamilton, higher theft rates, heavier traffic, and more frequent claims all contribute to higher insurance costs for households.”

The report also finds Ontario premium growth rates vary widely. Toronto’s increase during the 2022 to 2025 study period was 17%. Meanwhile Windsor drivers saw a 34% rise, those in London and Ottawa both saw a 35% hike, and Oshawa drivers saw 37% increases.

Plus, 75% of Canadians are reporting higher premiums over the past two years. Sixty-three percent say they’ve taken steps to lower premiums – including shopping their policies around (40%), asking existing insurers for discounts (30%) and modifying their coverage (21%).

In some cases, reducing coverage to save money can raise risk levels in the event of a major claim against a driver. “Reducing coverage increases your exposure,” says Ivans.  

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Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.