How to Buy Car Insurance in Canada

Car insurance is required by law in Canada, whether you own or rent a vehicle. Before you can even register or attach plates to your vehicle, you’ll need to ensure that you have adequate insurance coverage.

Here’s what you need to know if you’re buying insurance in Canada.

Meet the Minimum Requirements

All drivers must carry a minimum amount of coverage. This includes:

  • Third-party liability: Minimum of $200,000; Quebec has a minimum of $50,000.
  • Coverage for medical expenses: Up to $3,500 for minor injury; up to $65,000 for combined medial and attendant care for non-minor and non-catastrophic injuries; up to $1 million for combined medical and attendant are for catastrophic injuries.
  • Coverage for loss of income if an accident results in injury.

While $200,000 is the required minimum in most provinces, it may not realistically be enough to coverage in some areas.

In Ontario, an accident involving four injured people could easily result in millions of dollars in losses. In this case, an auto insurance policy with $200,000 in third-party liability would not cover the entire cost of losses.

Nova Scotia’s Consumer’s Auto Insurance Guide lists a mandatory minimum of $500,000 for third-party liability.

It’s better to buy more coverage than to have too-little coverage.

Some requirements will vary from one province to the next. In Ontario, for example, you must also carry:

  • Funeral expense benefits: $6,000
  • Death benefits: $25,000 to the spouse; $10,000 to each surviving dependent; $10,000 ot parents/guardians

In many provinces, car insurance is provided by private companies. Government-run insurance companies provide statutory insurance coverage in British Columbia, Manitoba and Saskatchewan.

Provide the Right Information

When purchasing an insurance policy, you will need to provide personal information and documents, including:

  • Name
  • Address
  • Canadian driving license and driving record
  • Details about your past and current insurance providers
  • Information about the vehicle (make, model, registration number and mileage)

Car insurance is expensive in Canada, and many insurance companies won’t provide coverage to drivers without a full (G) Canadian driving license.

How Premiums are Calculated

The cost of insurance will depend on several factors, including:

  • Age: Older drivers typically pay lower insurance rates.
  • Gender: Women generally pay lower premiums.
  • Driving Experience: The amount of time you’ve been driving in Canada.
  • Driving History: Your driving record, including accidents and speeding tickets.
  • Location: Busy cities, like Toronto, have higher accident rates, which could raise your premium.
  • Vehicle Usage: The more often you drive your vehicle, the greater the risk of an accident (i.e. you’ll pay a higher premium).
  • Vehicle: Cheaper cars and cars with higher safety ratings are generally cheaper to insure.
  • Winter Tires: Drivers in some areas, like Ontario, will receive an insurance discount for using winter tires in the winter months.

Young drivers who are still working toward their full (G) license will generally pay higher insurance rates because they are at a much higher risk of getting into an accident. Each time young drivers upgrade to a higher license level, their rates will be lowered.

New drivers can also avoid higher rates by driving their parents’ cars instead of owning their own vehicle and purchasing their own policy.