All Canadian drivers must legally have car insurance or face heavy penalties for owning and operating a car without valid insurance.
Just how heavy are those penalties?
In British Columbia you can face up to 6 months in jail and a $2,000 fine while in Ontario you might lose your license for 3 years and face a fine of up to $25,000 for a first offence.
Even worse, if you get into an accident and cause serious injury to yourself or another person and you don’t have insurance then you may be liable to pay for all expenses yourself and risk personal bankruptcy.
So, it is important for you to know both how to get car insurance in Canada and how to find the cheapest car insurance in your province to minimize this mandatory expense.
In this article from Cash Cow Canada you’ll find 7 easy steps to follow to find the right auto insurance for you.
But, before we get there – are you sure you know exactly what car insurance you are trying to buy?
What is Car Insurance in Canada?
Car insurance (auto insurance) can be divided into 2 categories: Mandatory Coverage and Enhanced coverage.
Mandatory car insurance coverage
Mandatory car insurance is the minimum insurance that a driver is legally required to have.
Mandatory car insurance policies differ from province to province but generally include coverage for Accident Benefits (injuries to yourself) and Third-Party Liability (injuries to others).
Most provinces require drivers to have a minimum third-party liability coverage of $200,000.
If you want to keep your insurance premiums as low as possible then you can purchase the minimum mandatory car insurance policy as set by your home province.
Enhanced car insurance coverage
Enhanced car insurance (comprehensive car insurance) is insurance that protects you from additional events and/or covers many costs related to a car accident or general damage to your car from. This is also called optional car insurance since it is not required by law.
Optional car insurance coverage examples:
- Theft
- Vandalism
- Damage to your vehicle from objects (trees, rocks, animals)
- Weather damage (hail, water, fire)
- Damage to your windshield
- Collision insurance (replace or repair your car)
- Renting a car while your car is being repaired
- Emergency roadside assistance
- Depreciation
Generally speaking, car insurance policies do not cover the loss or damage of personal items that are in your car. These items would be covered under your home insurance policy.
Obviously, you will pay more to the insurance company for each optional coverage item above the amount you must pay for mandatory insurance.
Now that you know that “car insurance” is actually a broad term for a number of different coverage options that are either mandatory or optional you can decide what items you are comfortable including or excluding in your auto insurance policy.
How to get car insurance in Canada
Follow these helpful tips to to get the best car insurance rate for your needs:
1. Determine your home province for insurance purposes
As you’ve already learned, each province has their own rules about mandatory car insurance.
Also, each province determines who can provide auto insurance within the province.
So, find your province below to learn about the specific requirements and options available to you.
Thanks to statista for the average annual cost of car insurance data.
Alberta
The Automobile Insurance Rate Board (AIRB) regulates car insurance in Alberta.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance Alberta.
If you live in one of the two major cities in Alberta then you can find helpful information on Car Insurance Edmonton and Car Insurance Calgary by following the links.
Here is some more information on car insurance in Alberta:
- Average annual cost: $1,251
- Mandatory coverage: Accident benefits and third party liability.
- Private companies or public (government) providers: Private companies
British Columbia
The Insurance Corporation of British Columbia (ICBC) provides car insurance in British Columbia.
Here is some more information on car insurance in British Columbia:
- Average annual cost: $1,680
- Mandatory coverage: Accident benefits, third party liability, uninsured automobile protection, hit and run and inverse liability protection.
- Private companies or public (government) providers: Public
Manitoba
Manitoba Public Insurance (MPI) provides car insurance in Manitoba.
Here is some more information on car insurance in Manitoba:
- Average annual cost: $1,080
- Mandatory coverage: Personal injury, third party liability and all perils.
- Private companies or public (government) providers: Public
New Brunswick
The New Brunswick Insurance Board (NBIB) regulates car insurance in New Brunswick.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance New Brunswick.
Here is some more information on car insurance in New Brunswick:
- Average annual cost: $819
- Mandatory coverage: Accident benefits, third party liability, uninsured automobile protection and direct compensation.
- Private companies or public (government) providers: Private
Newfoundland and Labrador
Digital Government and Service NL regulates car insurance in Newfoundland and Labrador.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance Newfoundland.
Here is some more information on car insurance in Newfoundland and Labrador:
- Average annual cost: $1,132
- Mandatory coverage: Third party liability and uninsured automobile protection
- Private companies or public (government) providers: Private
Nova Scotia
The Nova Scotia Utility and Review Board (NSUARB) regulates car insurance in Nova Scotia.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance Nova Scotia.
Here is some more information on car insurance in Nova Scotia:
- Average annual cost: $842
- Mandatory coverage: Accident benefits, third party liability, uninsured automobile protection and direct compensation.
- Private companies or public (government) providers: Private
Ontario
The Financial Services Commission of Ontario (FSCO) regulates car insurance in Ontario.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance Ontario.
If you live in one of the major cities in Ontario then you can find helpful information on Car Insurance Toronto, Car Insurance Mississauga, Car Insurance Ottawa and Car Insurance Brampton by following the links.
Here is some more information on car insurance in Ontario:
- Average annual cost: $1,445
- Mandatory coverage: Accident benefits, third party liability, direct compensation and uninsured automobile protection.
- Private companies or public (government) providers: Private
Prince Edward Island
The Island Regulatory and Appeals Commision (IRAC) regulates car insurance in PEI.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance PEI.
Here is some more information on car insurance in Prince Edward Island:
- Average annual cost: $796
- Mandatory coverage:
- Private companies or public (government) providers: Private
Quebec
The Authorite Des Marches Financiers regulates car insurance in Quebec.
There are a number of policy providers in the province. Start with this article to find the right provider for you: Best Car Insurance Quebec.
Here is some more information on car insurance in Quebec:
- Average annual cost: $642
- Mandatory coverage:
- Private companies or public (government) providers: Public and Private
Saskatchewan
Saskatchewan Government Insurance (SGI) regulates car insurance in Saskatchewan.
Here is some more information on car insurance in Saskatchewan:
- Average annual cost: $936
- Mandatory coverage: Personal injury, third party liability and property damage.
- Private companies or public (government) providers: Public
2. Prepare your personal information
There are a number of personal factors which will impact the amount you pay for car insurance
Insurance companies use historical data to set the price of auto insurance premiums that include things like your age, your gender and your home address.
Here is a list of factors that affect auto insurance premiums:
- Your age
- The type of car you drive
- Your credit history
- Your gender
- What postal code you live in
- Where you park your car
3. Review your driving history
Driving history is another important factor for insurance companies to determine your premiums.
The amount of time you spend driving, the type of car you currently drive and your accident history are all important factors that insurance companies look at.
Also, your driving record includes things accidents (fault or no-fault) and traffic violations. A history of driving problems can increase your car insurance premiums from 20% to 200%.
Finally, your driving experience (length of time you’ve had a drivers license) will impact your premiums with younger drivers paying more than older more experienced drivers.
4. Get auto insurance quotes from multiple providers or use an insurance broker
This one might seem obvious but when you go to get an insurance quote, make sure to try a number of different insurance companies.
By getting multiple quotes you’ll be able understand the range of options available to you at different prices.
Remember, insurance companies want your business! So, make them work for it by creating competition between multiple firms.
Check out our list of the top insurance companies in Canada to choose from when deciding who you want to approach for a quote.
Competition is why insurance brokers exist. An experienced broker can help you get multiple quotes quickly and help you pick the right one.
Insurance brokers do get paid for this service however and their fee will be built into the premium that you end up paying.
5. Ask about discounts
There are many different things you can do to reduce the cost of your insurance premium and finding out what auto insurance discounts are available is the first place to go.
Here is a list of the best ways to get car insurance discounts:
- Driving school
- Young drivers of Canada
- Winter tires
- Telematics (driving habits tracker)
- Seniors and retirees
- Loyalty and renewal discounts
- Anti-theft device
- Private parking
- Get a green or eco-friendly vehicle
- CAA membership
6. Bundle your insurance policies
Another easy way to reduce your car insurance premium is to bundle auto insurance with home or tenant insurance.
Most insurance companies will reduce the premiums on both policies if you purchase both types of coverage from the same insurance provider.
A good rule of thumb is that you should save 15% by bundling your insurance policies.
7. Review your policy
Reviewing your insurance policy on a regular basis is a good thing to do.
Insurance companies are often coming out with promotions to win and keep their clients so you might have the option to save by switching companies or by renewing your policy at a better rate.
Also, you’re needs will change throughout the phases of your life. If you buy a second car or get married or start a family you will want to explore different coverage plans and discounts.
How To Get Car Insurance In Canada Summary
If you’ve read all the way through this article then you are more informed than most of your peers when it comes to auto insurance in Canada.
Here are the key takeaways:
- Car insurance differs by province so you need to understand what the mandatory minimum coverage is in your province
- Some provinces offer private insurance options while others are controlled by a single government entity
- You can add different levels of coverage to your policy to protect you from additional events but you will have to pay more
- Compare auto insurance quotes from multiple insurance companies in order to find the best rate
- Auto insurance discounts are available when you take driving courses, join an organization like CAA or use tools to protect your vehicle.
- Bundling insurance policies is a great way to save on your overall cost.
Do you have any auto insurance tips or tricks you’d like to share? We’d love to hear from you!