Auto Insurance System
Is Outdated!
Millions Are Locked Out: A Crisis of Affordability and Access
A Model from the Past That Can’t Price the Present
Auto insurance in Canada still relies on flat-rate, inflexible policies designed for daily drivers in the 1980s—not the part-time, gig-based, tech-enabled driving patterns of today. Policies are priced using static demographic proxies like age, postal code, and gender, ignoring real-world behavior and usage.
Whether you drive 500 or 50,000 km per year, you pay roughly the same—regardless of risk. This punishes low-mileage and cautious drivers, overcharges entire population segments, and prices millions out entirely. Approximately 1.15 million drivers in Canada and 32 million in the US operate without proper insurance. A staggering 85% of uninsured drivers cite high costs as the primary barrier. This widespread lack of coverage costs the Canadian economy an estimated $2 billion annually due to uninsured accidents.
CA
1.15M
Uninsured in Canada
USA
32M
Uninsured in US
Cost
85%
Cite High Cost
Loss
$2B
Annual Cost to Canada
Affordability Is Collapsing
From 2014 to 2024, the cost of auto insurance in Canada rose 36.4%—more than twice the general rate of inflation (Statistics Canada, CPI Table 18-10-0004-01). Ontario remains the most expensive province, where average monthly premiums often exceed $200–$300 per driver. In 2024, insurance prices rose nearly 9% year-over-year, with no sign of slowing.
Rising Cost
From 2014 to 2024, the cost of auto insurance in Canada rose 36.4%—more than twice the general rate of inflation (Statistics Canada, CPI Table 18-10-0004-01). Ontario remains the most expensive province, where average monthly premiums often exceed $200–$300 per driver. In 2024, insurance prices rose nearly 9% year-over-year, with no sign of slowing.
Prohibitive Premium Structures
Traditional auto insurance uses generalized risk pools, causing lower-mileage drivers to subsidize higher-mileage ones. Its reliance on rigid annual premiums and long-term commitments fails to accommodate variable driving patterns. Many existing Usage-Based Insurance (UBI) programs in Canada are mere discount systems, not real-time, usage-based recalibrations. Kilometre-block products often require upfront mileage commitments, lacking true dynamic flexibility.
Millions Are Underserved or Excluded Entirely
Traditional insurance disproportionately impacts specific demographic and usage segments, creating massive underserved markets—a significant societal challenge and a multi-billion dollar missed opportunity.
Number of individuals and potential premium opportunity across underserved market segments in Canada. This highlights both the vast number of drivers not adequately served and the multi-billion dollar opportunity for tailored solutions.
Market Segment | Potential Premium (Billions CAD) | Number of Individuals (Millions) |
|---|---|---|
Occasional Drivers | $10.00 | 4.2 |
Gig Economy Workers | $2.70 | 1.8 |
Young Drivers | $8.50 | 3.5 |
Uninsured Drivers | $4.30 | 1.0+ |
Occasional Drivers (4.2M Canadians)
"I drive maybe three times a week.
My insurance is more than my car loan."
— Retired driver, Toronto
Gig Workers (1.8M Canadians)
Delivery and rideshare drivers are forced into rigid commercial policies often costing $900–$1,200/month.
Young Drivers (3.5M aged 16–25)
Heavily penalized for age, regardless of behavior. Premiums often exceed $1,000/month, causing many to delay licensing or drive uninsured.
Uninsured Drivers (Estimated 1M+)
In Ontario alone, ~5% of drivers operate without insurance. Nationwide, over 1 million likely drive illegally. They’re not criminals—they’re priced out.
WHY PREMIUMS KEEP CLIMBING?
Insurers aren’t hiking rates out of greed—they’re trapped in a system built for the last century:
30%+
Vehicle Repair Costs Surge (since 2020)
2X
Auto Theft Claims (Ontario, 4 years)
UP
Medical Liability Payouts Rising
Because traditional insurance operates on long-term, one-size-fits-all contracts,
insurers have no ability to adjust in real time—so premiums climb for everyone, even the safest drivers.
The Vicious Cycle
High premiums drive more drivers to go uninsured, leading to more unpaid claims, which in turn drives premiums even higher.
This creates a self-perpetuating cycle of unaffordability.
WHY INSURERS CAN’T FIX IT THEMSELVES
The challenges for insurers to adapt are deeply embedded
in their operational and regulatory landscape:
Legacy
Infrastructure
Most carriers rely on core systems from the 1980s–90s. Real-time data and micro-transactions are beyond their platforms.
Regulatory
Bottlenecks
Provinces allow UBI, but actuarial departments are calibrated to annual loss ratios, not per-second exposures.
Product
Development Cycles
Building compliant, secure UBI systems from scratch takes years and millions—too costly for a perceived niche.
THE RIPPLE EFFECTS ACROSS SOCIETY
The cost of this failure isn’t just financial—it’s systemic,
impacting public services and the labor market:
Public Healthcare Burden
Provincial health systems absorb rehab and emergency care costs from uninsured crashes, driving taxpayer-funded expenses.
Legal System Congestion
Uninsured collision cases clog civil courts, dragging on for years. Legal fees inflate insurer costs, cycling back into higher premiums.
Labor Market Inefficiency
When gig workers or entry-level employees can't afford insurance, they opt out of work opportunities. Canada loses productivity. Households lose income.
KeyTurn Exists to Solve This
We don’t replace insurers—we enable them.
KeyTurn provides the real-time infrastructure insurers lack
