Car Insurance Tips for Newcomers to Canada
You’re a newcomer to Canada and you’re ready to get behind the wheel and drive.
You need to know that car insurance is mandatory in Canada. You can’t legally drive without it.
After getting set up, all drivers in Canada should always carry proof of car insurance while driving to avoid any charges or fees. You can keep proof of insurance as either a paper copy in your car or an electronic file on your phone.
What is covered in basic auto insurance?
The basic coverage required in all provinces is third-party liability insurance. Third-party liability is your standard, essential auto insurance which covers you for injuries or damages to others if you're at fault in an accident. The minimum limit required varies by province.
Optional Coverages: There are optional additional coverages you may want to consider when building out your insurance plan, such as collision coverage (for damage to your vehicle), comprehensive coverage (for non-collision incidents like theft or vandalism - link here to other article), and accident benefits (for medical expenses and lost wages).
If you choose optional coverage like collision or comprehensive, you'll probably have to pay a deductible if you file a claim. The deductible is simply the portion of the repair costs you're responsible for before the insurance kicks in. A Western Financial Group car insurance expert will be able to help you understand how much of a deductible to expect and will explore the best options for your needs.
Ask about No-Fault Insurance: Some provinces have a no-fault insurance system, meaning your insurance company covers your losses in an accident, regardless of who is at fault.
British Columbia (BC):
○ BC has a government-run auto insurance system known as the Insurance Corporation of British Columbia (ICBC). Private insurance options are limited.
○ Basic coverage includes third-party liability, accident benefits, and underinsured motorist protection.
○ Optional coverages include collision and comprehensive, but you must purchase these from private insurance companies.
○ ICBC premiums are determined based on your driving record, years of driving experience, and the number of at-fault accidents you've had. See our note on driving experience at the bottom of this section.
Alberta:
○ Auto insurance in Alberta is privatized, allowing you to choose from various insurance providers.
○ Basic coverage includes third-party liability and accident benefits.
○ Optional coverages include collision, comprehensive, and other add-ons like loss of use and rental car coverage.
○ Premiums are influenced by factors such as your driving record, vehicle type, and location.
Ontario:
○ Ontario has a mixed public-private auto insurance system.
○ Basic coverage includes third-party liability, accident benefits, direct compensation-property damage (DCPD), and uninsured automobile coverage.
○ Optional coverages include collision, comprehensive, and endorsements for increased coverage limits.
○ Insurance rates in Ontario tend to be higher due to a higher population density and increased accident frequency.
Quebec:
○ Quebec has a unique auto insurance system operated by the government agency Société de l'assurance automobile du Québec (SAAQ).
○ Basic coverage is provided by the SAAQ and includes third-party liability and personal injury benefits.
○ Quebec does not have private insurance for personal injury, but you can purchase additional coverage from private insurers for property damage liability and more.
Manitoba:
○ Manitoba operates under a public auto insurance system called Manitoba Public Insurance (MPI).
○ Basic coverage includes third-party liability and basic personal injury protection.
○ Optional coverages are available for increased liability limits, collision, and comprehensive coverage.
Saskatchewan:
○ Saskatchewan has a government-run auto insurance system provided by the Saskatchewan Government Insurance (SGI).
○ Basic coverage includes third-party liability and injury benefits.
○ Optional coverages include increased liability limits, collision, and comprehensive coverage.
Atlantic Provinces (Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador):
○ These provinces have private auto insurance systems.
○ Basic coverage typically includes third-party liability and accident benefits.
○ Optional coverages like collision, comprehensive, and endorsements may vary between insurers and provinces.
Hot tip: Graduated Licensing
If you're an immigrant and new driver to Canada, you may need to work with graduated licensing programs in most provinces, including the popular destinations of Ontario, B.C., and Alberta. These programs have specific restrictions and requirements for new drivers, which we’ve linked to below. Keep in mind, this is not a comprehensive list. Check your province of choice for the most up-to-date knowledge.
See graduated licensing for British Columbia
See graduated licensing for Ontario
See graduated licensing for Alberta
Does my driving experience outside of Canada count towards a better insurance premium?
If you’re an experienced driver already, and are specifically immigrating from the U.S., get ahead of the curve and be sure to have a copy of your driving record on hand before immigrating to Canada. This simple step will help you get the best possible premium for your experience level. The fewer incidents you have on record, the better your rate may be.
Drivers from outside of the U.S. may or may not be able to apply their past driving experience within Canada, as Canadian insurance companies take into account your experience with Canadian driving rules, traffic conditions, and unique weather conditions. Ultimately, it’s going to come down to the individual insurance provider. It’s still worth having an official copy of your driving experience on hand, but we can’t guarantee that it will count towards a lower auto insurance premium.
How much should I expect to pay for auto insurance as an immigrant to Canada?
There’s no way for us to provide an average number without knowing more about your individual background, driving experience, and new home province. Insurance premiums can vary widely based on specific factors such as your driving record, age, gender, location, the type of car you drive, and more.
Need to know more? You’re in the right place already. At Western, we help customers access auto insurance across Canada. Reach out today to chat with one of our insurance experts.
