A New Canadian's Guide to Cheap Car Insurance

Auto insurance options in Canada may have many similarities to what is available in the United States; however, there are also some very important differences between the two countries. While having at least some form of insurance is mandatory everywhere in Canada, specific laws and regulations are set by individual provinces and territories. Therefore, how you get insurance and the type of insurance that you need to carry will vary depending on which province you move to.

The Government's Role in Canadian Car Insurance

According to the InsuranceBureau of Canada, the provinces of Manitoba, Saskatchewan and British Columbia have government-run insurance agencies that provide basic coverage for bodily injury and property damage. Private insurers in these provinces sell policies that complement the mandatory government-run insurance by providing additional coverage. In the province of Quebec, private insurance companies sell liability and property damage coverage. The government-run system handles all claims for bodily injury and death in the province. The cost of this coverage is included in the price of obtaining or renewing a Quebec driver’s license.

Another thing worth knowing about insurance in Canada is that health care coverage is provided by the government of each province. Therefore, if you are eligible for Canada's public health insurance, you will not have to deal with costly medical bills and complicated claims procedures if you are injured in a car accident.

What are the Average Car Insurance Rates in My Province?

Despite the differences, there are many similarities between Canadian and US auto insurance companies. The criteria used to determine the cost of coverage is based on a variety of factors. One is the location you live in. Just like there are differences in insurance rates between various American states, auto insurance costs will be different in each Canadian province. TheFraser Institute has recently completed a study of average auto insurance rates in different provinces, concluding that British Columbia was the most expensive, and Quebec had the lowest average premium. 

How Can I Save on Car Insurance in Canada?

Other factors, such as your age, driving record, credit history and the type of vehicle that you drive will come into play as well. Most insurers will ask you about the length of time that you've held a Canadian driver’s license. If you've just recently exchanged you American license for a Canadian one, they may consider you to be a “new driver” and charge you higher premiums. If you have a good driving record in the US, you may want to consider getting a driver’s abstract from your state's Department of Motor Vehicles and present it to the insurer when you apply for a policy. This is because the majority of insurance companies in Canada will not automatically ask the DMV for your driving history, even if you tell them that you've held an American driver's license before.

When buying a new or used car in Canada, you should make your decision carefully. Powerful sports cars have a bad reputation for being involved in traffic accidents, as they are favored mainly by young men. Luxury vehicles may make a more attractive target for thieves. The Insurance Bureau of Canada publisheda report showing how different cars measure up in terms of collision, theft and other claims.