Mandatory car insurance in Canada
Car insurance is required by law in Canada because in the event of a car accident, car insurance covers the owner of the vehicle, the driver of the vehicle (with the owner’s consent), passengers, pedestrians, and property! There are three kinds of mandatory coverage:
Optional insurance coverage
On top of the mandatory car insurance coverage required by provincial governments, there are also optional coverage options available to consumers across Canada. These are the most popular optional coverages:
No-fault insurance is a concept that developed over time as a way to reduce legal and administrative costs associated with having to prove fault in a collision. Before no-fault, insurance companies required individuals involved in a collision to establish which driver was at fault. The insurer of the at-fault individual would be responsible for covering damages suffered by those who were not at fault. Naturally, this ended up being a lengthy and expensive process.
In a pure no-fault system, if a person is injured or their car is damaged in a collision, they deal directly with their insurance company, regardless of who is at fault. The injured person has no right to sue the person who was at fault to recover any damages for their injury.
In most provinces, the person who did not cause the accident has the right to sue the at-fault driver for damages. In some provinces, however, the person who did not cause the collision has the right to sue the at-fault driver for injuries only if their injuries meet a certain criteria.
Car insurance coverage by province
Car insurance requirements vary greatly across the different provinces. Some simply require minimum liability insurance of $200,000 while some require additional features such as Accidents Benefits Insurance or Comprehensive and Collision Insurance.
Click your province below to see their mandatory insurance requirements:
Average car insurance rate by province
The following car insurance rates were sourced from the Insurance Bureau of Canada (IBC), the General Insurance Statistical Agency (GISA) and the Groupement des assereurs automobiles (GAA) provincial comparison report.
How do you save money on car insurance?
If you’re looking to find the best car insurance rate for you, it is crucial that you weigh all of your options.
While browsing, you might be surprised at how much the car insurance rates will vary. While shopping around for insurance may seem like a daunting task, you won’t regret taking the time to compare the different rates available to you.
When it comes to car insurance, all insurers will consider the same factors. However, when it comes to setting rates they all do it a little differently. While multiple companies may offer a driver the same coverage, the cost will vary across each of them. To find the cheapest rate and avoid paying more than you need to, it is necessary to compare car insurance rates across these companies.
Car insurance rates fluctuate regularly so it is important to keep and eye out for any changes that you might want to take advantage of. While shopping around, you may realize that you are already paying the cheapest rate with your current insurer or you might see another option that will help you save.
How to compare car insurance quotes
Whether you’re getting your quote from Kanetix.ca, InsuranceHotline.com, or otherwise, quotes should always be free. While you might need to make a down payment to kickstart your policy, you should never be charged when requesting a quote. When you’re ready to start comparing quotes, make sure you consider the following tips:
1. Prepare all relevant information
To make this process as seamless as possible, make sure you have the following information on hand before getting started:
- Personal information: When requesting a quote, you will be required to provide your address, date of birth, occupation, driver’s license and information of those you want included on your policy (spouse or children)
- Driving history: You will need to provide a detailed description of your driving history including any claims, tickets, or violations you’ve experienced in the last five years. You should also let them know if you have completed any driving courses as this should lower your rate.
- Vehicle information: Make sure to record your vehicle’s current mileage, date of purchase, and Vehicle Identification Number (VIN). You will only be asked to provide the mileage, make, and model of the vehicle if you have yet to purchase it.
- Coverage for those on your current policy or in your household: Most insurers will require your coverage history. If there is anyone living with you that you will be excluding from the policy, you will need to prove that they are covered by someone else.
2. Select the appropriate coverage
Before selecting a policy, it is necessary to review the mandatory coverage requirements under the Canadian law. The laws and insurers available in each province play a major role in your car insurance rates. Complete Car looked at quotes for the minimum required insurance in each province. Most provinces only require you to have liability insurance which covers the basics such as property damage and medical bills for others shall you cause any accidents. Selecting more than the minimum coverage would increase your cost now but potentially give you more protection in case of an accident.
Determining the right amount of car insurance can be tricky. Since there is no way of knowing the maximum price you would have to pay if you caused an accident resulting in bodily injury of property damage, it is important to think about what would happen if you caused any damages that exceed your coverage.
While you may dread spending money on car insurance, it serves a very important purpose. It only takes one accident to create a major financial burden which could result in the loss of all your savings or assets. The bills resulting from damage and injuries after an accident have the potential to be hundreds of thousands of dollars, a price that no one is ready to pay.
Luckily, should you be involved in an accident resulting in massive bills or you being sued, liability insurance is there to protect you from that burden. Selecting the appropriate liability coverage is very important when comparing car insurance quotes. We recommend having at least as much liability coverage as your net worth.
3. Decide if you want full coverage car insurance
While liability coverage is generally the most cost effective, it only provides the basics. For example, if you cause an accident, your minimum liability coverage will cover the cost of legal expenses resulting from causing bodily injury to other drivers or pedestrians, or property damage up to your policy limit. To avoid this unwanted financial burden, many drivers — specifically those who have yet to pay off their car — want “full coverage” car insurance as a safety net. Full coverage refers to any policy that includes liability coverage, as well as comprehensive and collision coverages.
What does collision insurance cover?
- Damage to your vehicle should you crash into an object such as a fence or pole.
- Damage to your vehicle as a result of an at-fault an accident with another driver
- Damage to your vehicle should another driver hit you (you could also make a claim against the other driver’s liability insurance)
What does comprehensive insurance cover?
Comprehensive insurance will pay for the value of your car should it be stolen as well as damage resulting from:
- Weather such as tornadoes or hail
- Falling objects
- Crashes with an animal, such as hitting a deer
- Civil disturbances or vandalism
Regardless of the coverage you choose, don’t forget to compare the quotes for the same type and amount of coverage in order to find the best price.
4. Collect & compare car insurance quotes
With the exception of BC, Saskatchewan, and Manitoba, to make sure you get the best deal possible, we recommend that you compare quotes from at least three insurance companies. You might want to compare rates between the big insurers and the smaller, regional insurers in your province. Make sure you’re also comparing the same quote between companies.
Each quote should include:
- The same amount of liability and uninsured/underinsured motorist coverage
- The same deductibles for collision and comprehensive coverages (if opting for them)
- The same drivers and cars
- All discounts you’re eligible for (most insurers usually list their discounts on their website, however, be sure to ask if you’re unsure.
Comparing car insurance rates
There are countless underlying factors that make up your car insurance rate. Some of these include the location where your car is registered, the type of coverage you’re opting for, your marital status, mileage, driving history and the make, year and model of your vehicle. In most provinces, insurance companies will also consider your gender and credit history when calculating rates. Since the rates offered fluctuate so much between each customer, it’s crucial that you consider all of your options.