How Much Is Car Insurance In Canada? (2024)

Recent industry insights reveal that Canadian drivers typically spend between $1,300 and $1,800 annually on car insurance premiums, equivalent to $120 to $150 per month. However, the actual amount you pay can vary significantly based on your province of residence.

Car insurance is handled differently in each province and territory, leading to variations in the level of protection and costs for drivers across the country.

In this blog post, we will explore and compare car insurance rates across different Canadian provinces. Additionally, we’ll provide insights on finding affordable options and guide you on how and where to secure cheaper car insurance rates in Canada.

How Much is Car Insurance in Canada?

Canadian drivers mostly spend between $1,300 and $1,800 annually on car insurance coverage. It’s not just an optional expense; driving an uninsured vehicle in Canada is illegal.

The Canadian government mandates car insurance for drivers, ensuring everyone can cover personal or third-party expenses in case of an accident.

However, the actual cost of your insurance may be higher or lower, depending on your personal factors like the driver’s age, gender, driving record, vehicle make and model, and your province of residence.

Understanding these factors and how they affect car insurance rates can help drivers make informed decisions when choosing a policy.

Average Cost of Car Insurance Per Province

The average cost of car insurance varies from province to province. This is because each province has its own unique risk factors and variables. Additionally, some provinces have government-operated car insurance programs, which can result in increased prices due to a lack of competition.

Here is a quick glance at the different car insurance rates across the different provinces and territories in Canada:

Province or Territory	Average Annual Premiums
Alberta	$1,316
British Columbia	$1,832
Manitoba	$1,140
New Brunswick	$871
Newfoundland & Labrador	$1,168
Northwest Territories	$978
Nova Scotia	$891
Nunavut	$963
Ontario	$1,528
Prince Edward Island	$861
Quebec	$857
Saskatchewan	$1,235
Yukon Territories	$812

How Much is Car Insurance In Ontario?

The average annual cost of car insurance in Ontario is approximately $1,528. In 2015, Ontario was the most expensive province, with average premiums reaching $1,281 per year. Experts attribute the rise in car insurance rates to rampant insurance fraud.

It’s important to note that privately-owned companies provide car insurance in Ontario, and there is no government-provided coverage.

In Ontario, vehicle insurance is mandatory, but unlike in British Columbia, you can shop around for the best deal through private insurers. Take the time to compare different brokers and secure a competitive rate for the required coverage.

How Much is Car Insurance In BC?

The average annual cost of car insurance in British Columbia is approximately $1,832. This represents an increase of over $700 since 2015, marking a substantial 63% rise in less than five years. The province attributes this significant increase to a surge in insurer costs, including injury claims, lawsuits, and vehicle repair liabilities.

Car insurance in British Columbia is administered by a government-operated group, limiting the range of options available to drivers. This unique structure may contribute to drivers’ challenges when seeking competitive rates and diverse coverage choices.

How Much is Car Insurance In Alberta?

The average annual cost of car insurance in Alberta is approximately $1,316, representing a $300 increase from the 2015 figure of $1,004.

Car insurance in Alberta is offered by privately owned companies, providing drivers with a variety of options to select from.

How Much is Car Insurance In Saskatchewan?

The average annual cost of car insurance in Saskatchewan is approximately $1,235. Back in 2015, drivers in the province were paying an average yearly rate of $1,049.

Like British Columbia, a government agency offers car insurance in Saskatchewan. This structure means that there is limited flexibility regarding pricing and coverage options.

All drivers in the province are mandated to have third-party liability insurance, providing coverage of up to $200,000. However, a report released in May has raised concerns, warning that a substantial number of drivers in Saskatchewan are considered “underinsured.”

How Much is Car Insurance In Manitoba?

The average annual cost of car insurance in Manitoba is approximately $1,140. In this province, car insurance is administered by a government-operated organization, leading to a limited number of coverage and pricing choices.

On a positive note, the province’s auto insurance division (MPI) proposed a 0.9% rate decrease in 2019 – marking the first overall rate reduction in eight years.

How Much is Car Insurance In Nova Scotia?

The average cost of car insurance in Nova Scotia is approximately $891 per year. To find the best rates, drivers in the province can compare quotes from various reputable private car insurance providers.

It’s crucial to consider your driving record and insurance coverage preferences when seeking the most cost-effective car insurance in Nova Scotia. Your driving history and coverage options significantly influence your car insurance rates in Nova Scotia, potentially varying by as much as 30%.

How Much is Car Insurance In Newfoundland and Labrador?

The average annual cost of car insurance in Newfoundland and Labrador is approximately $1,168. Over the past five years, rates in this province have surged by 55%. Some attribute this increase to substantial payouts for relatively minor injuries.

Drivers in Newfoundland and Labrador obtain their coverage from private car insurance companies.

New Brunswick

In New Brunswick, the average annual car insurance cost is around $876. Residents of the province benefited from below-average premiums, beginning at $728 in 2015. However, an upswing in claims, primarily attributed to distracted driving, has prompted the province to implement widespread rate increases.

Car insurance in New Brunswick is offered by various private carriers, offering drivers various choices.

Nunavut

In Nunavut, the average annual cost of car insurance is $963. As residents navigate the unique challenges of driving in this remote region, it becomes essential to understand the specific factors influencing insurance rates.

Quebec

Quebec boasts the lowest average car insurance cost among the provinces, standing at around $717 per year. The unique insurance system in Quebec involves a government-operated organization providing coverage, but drivers also have the option to supplement this with privately offered insurance.

Compared to other provinces, Quebec has relatively lenient insurance regulations. The province imposes limits on bodily injury claims, contributing to the overall affordability of car insurance for drivers. Additionally, the combination of public and private insurers in Quebec allows drivers the flexibility to explore and find the most cost-effective insurance options available.

Prince Edward Island

The average annual car insurance premium in Prince Edward Island is approximately $861, making it comparable to the rates in other Maritime provinces. Car insurance in Prince Edward Island is provided by private companies.

Northwest Territories

In the Northwest Territories, the average cost of car insurance is $978. Residents should be aware of the factors that influence insurance rates, such as driving history, coverage limits, and the type of vehicle insured.

Yukon

The average cost of car insurance in Yukon is $812. It’s crucial for individuals in this region to be informed about available coverage options and potential discounts. Factors like a clean driving record and additional safety features in a vehicle may contribute to lower premiums.

What is Car Insurance, and How Does it Work?

Car insurance is a mandatory financial protection that shields you from potential losses resulting from accidents. It is crucial to purchase this coverage to safeguard yourself when you may be held responsible for damages caused to another person or their vehicle.

Owning car insurance is required for all Canadian vehicle owners and is mandatory in every territory and province. Failure to have car insurance while operating your vehicle can lead to severe consequences. These consequences may include license suspension, vehicle confiscation, and substantial fines.

For example, in Ontario, fines for a first offence range from $5,000 to $25,000, accompanied by a 25% victim fine surcharge. A second offence can result in fines of up to $50,000.

Once you enter into a contract with your insurer, you become responsible for paying a premium to keep your car insurance policy active. This ensures that you are financially protected in the event of unforeseen circumstances involving you and/or your vehicle. Notably, car insurance follows the car and not the driver, making it a legal requirement to have insurance on your vehicle for it to be driven in Canada.

While car insurance is mandatory nationwide, its regulation is done at the provincial level rather than national. Furthermore, the Canadian car insurance landscape is divided into public insurance and private insurance options, adding another layer of complexity to the system.

Public Car Insurance vs Private Car Insurance

Public car insurance refers to the coverage provided by a government-owned corporation for your car and all other drivers in the province who purchase car insurance. In a public insurance system, you may also have the choice to enhance your coverage through a privately owned, publicly traded, or mutual insurance company.

On the other hand, private car insurance involves privately owned, publicly traded, or mutual companies offering insurance to you and all other residents in the province. For instance, TD Insurance, a wholly owned subsidiary of TD Bank, a publicly traded company, provides various car insurance coverages.

Ontario, Alberta, the Maritimes, and the territories have private insurance markets, allowing you to obtain quotes from multiple insurance companies. Ontario’s car insurance market is the largest in Canada, with numerous insurance companies competing for business.

British Columbia, Saskatchewan, and Manitoba have public insurance systems where Crown corporations provide driver coverage.

Quebec operates on a hybrid system. The Société de l’assurance automobile du Québec, a Crown corporation, provides partial accident benefits. Mandatory third-party liability coverage can only be purchased through a private insurance company. Optional car insurance coverages in Quebec are exclusively available from private insurance companies.

Types of Car Insurance Coverage in Canada

In Canada, there are mandatory car insurance coverages that differ from province to province, and there is also enhanced coverage (also referred to as optional or add-ons).

Mandatory Coverage

Every Canadian province and territory mandates drivers to have car insurance, with specific types and amounts of coverage varying by location.

Third-Party Liability: This coverage protects against losses incurred from third-party claims when you’re at fault for causing an accident. It includes damage to someone else’s property, bodily injury, or death. Third-party auto insurance coverage is mandatory across all provinces and territories in Canada.
Direct Compensation-Property Damage (DCPD): This coverage means the insurer compensates you directly when your vehicle is damaged in a non-fault accident. It covers damage to your car, its contents, and the loss of vehicle use. Property damage coverage is mandatory in most provinces.
Uninsured Automobile Protection: This coverage protects you if you’re in an accident with someone without valid insurance coverage or if you’re the victim of a hit-and-run.
Accident Benefits: This coverage protects you from injury in a collision, whether you’re the driver, a passenger, a pedestrian, or a cyclist. The four primary accident benefits include income replacement, medical, death/funeral, and miscellaneous benefits.

Optional Car Insurance Coverage

These coverages are usually optional, although they may be mandatory in some provinces or territories.

Collision Coverage: Protects your vehicle against damage from a collision with an object, regardless of fault. Mandatory only in Manitoba.
Comprehensive Coverage: Covers non-collision damage, such as theft, hail, vandalism, etc. Mandatory only in Manitoba.
Specified Perils Coverage: Protects against damages caused by named perils, such as theft, attempted theft, explosions, and natural disasters like fire or lightning. Only perils specified by the policy are covered.
All-Perils Coverage: A combination of collision and comprehensive insurance protects your vehicle from all causes of loss except those directly mentioned as exclusions. It also provides additional protection if another driver steals or damages your car.

RECOMMENDED READINGS:

How Car Insurance Rates are Calculated in Canada

Insurance companies take various factors into account when determining your insurance rate. Here’s a breakdown of the key considerations:

Vehicle Type: The type of vehicle you drive affects your premiums. Cars with higher theft rates, expensive repair costs, and lower safety ratings may lead to higher premiums.
Commute Distance: The distance you drive influences your premiums. Less driving generally results in lower premiums, as increased mileage correlates with a higher risk of accidents, leading to higher insurance costs.
Driving History: A clean driving record typically results in lower premiums. The number of years you’ve held a license is also a factor.
Age: Your age is often associated with driving experience and the risk of getting into an accident. Because of this, the younger you are, the higher your auto insurance rates will be.
Gender: Statistically, men are more likely to get involved in accidents than women. This pushes up the premiums male drivers need to pay.
Coverage Type: The extent of coverage and higher limits increase premiums. Opting for a higher deductible, the amount paid out of pocket following a claim, can lower your premium.
Marital Status: In most provinces, marital status can impact your premium. Spouses often share driving responsibilities, influencing the risk profile.
FSA (Forward Sortation Area): The first three characters of your postal code affect your rate, considering factors like theft rates, past payouts, and instances of insurance fraud.
Driving Experience: The longer you’ve held a license and insurance, the lower your premium. Novice drivers without much experience are considered riskier to insure.
Claims History: Your history of insurance claims influences your perceived risk. At-fault claims may lead to higher rates, even if validated and compensated.

How to Get Cheaper Car Insurance Rates

There are numerous strategies to reduce car insurance costs, but some have a more significant impact than others. Here are key steps you can take to lower your insurance rate:

Review Your Policy Annually: Regularly assess your policy to determine the appropriate coverage for your needs.
Explore Usage-Based Insurance or Telematics: Consider innovative insurance models like usage-based or telematics policies for potential savings.
Maintain a Strong Credit History: A good credit history can positively impact your insurance rates.
Enhance Vehicle Safety: Install safety features, such as an advanced alarm system or winter tires, to improve vehicle safety.
Keep a Clean Driving Record: Avoid traffic violations and accidents to maintain a favourable driving record and lower premiums.
Choose Safe Vehicles: Opt for vehicles with excellent crash test ratings, low theft risks, and avoid sporty models that attract attention.
Bundle Policies: Bundle multiple insurance policies with the same provider for potential discounts.
Consider a Higher Deductible: A higher deductible can lead to lower premium costs, but ensure it aligns with your financial capacity.
Shop Around and Compare Rates: Explore different insurers and compare rates to find the most cost-effective coverage.
Ensure Timely Payments: Avoid missed payments to maintain a positive payment history.
Stay Loyal for Discounts: Consider loyalty discounts offered by providers as a reward for long-term commitment.
Maintain Continuous Coverage: Even without a car, stay on a family or friend’s policy as a secondary driver to prevent gaps in your driving history.

Best Car Insurance Companies in Canada

When it comes to choosing a car insurance provider in Canada, several companies stand out for their reliability and customer satisfaction. Here are some of the best car insurance companies in the country:

1. Aviva Canada

Aviva Canada is one of the largest car insurance companies in Canada based on market share. The Markham-headquartered firm is recognized for providing quality auto coverage at competitive prices. Clients appreciate its comprehensive policies, and the insurer offers various add-ons, including ridesharing coverage, transportation replacement coverage, and accident rating waiver for the first at-fault accident. Aviva Canada is a preferred choice for Lyft drivers in Ontario due to its partnership with Lyft Canada.

2. Co-operators

Co-operators stand out for its respected name in the industry, unique discounts, and excellent customer service. Based in Guelph, the company received a five-star rating in a recent client satisfaction poll by J.D. Power. New drivers seeking affordable car insurance can benefit from Co-operators, which offer rewards for safe driving habits and premium reductions for hybrid and electric vehicle owners. The company provides various add-ons, including accident forgiveness and rental car coverage.

3. Desjardins

Desjardins ranks as one of Canada’s largest car insurance companies, headquartered in Lévis, Québec. Clients are drawn to Desjardins for its affordable premiums and a range of add-ons, such as accident forgiveness and new vehicle protection. The company offers discounts for safe parking, installing winter tires, and students with good grades. Desjardins is also one of the largest insurance companies in Canada based on total assets.

4. Economical

Economical, based in Waterloo, Ontario, is part of the Definity Financial Corporation. Specializing in property and casualty insurance, Economical provides unique coverages, including policies for ATVs, mopeds, motorcycles, snowmobiles, RVs, campers, and motorhomes. The company offers perks such as discounts for conviction-free records, first-at-fault accidents, and anti-theft device installations.

5. TD Insurance

Toronto-based TD Insurance stands out for its competitive premiums and a range of premium-reduction perks. It offers bundling and multi-vehicle discounts, and clients can conveniently request quotes or purchase insurance online through its user-friendly website. TD Insurance provides standard policies with mandatory coverages and offers add-ons such as collision, comprehensive, specified perils, and all-perils coverage.

Final Thoughts on How Much is Car Insurance in Canada

Understanding the different car insurance rates across the diverse Canadian provinces empowers you to make informed decisions about your coverage. Whether you’re a resident of British Columbia, Ontario, or any other province, recognizing the factors influencing your premiums is crucial.

As you navigate the landscape of car insurance in Canada, remember that finding the right coverage at an affordable rate is possible. Ready to take control of your car insurance costs? Start by exploring our tips and tricks to find the most competitive rates tailored to your province. Your journey to affordable car insurance in Canada begins now!