One item that always finds its way into our monthly budget is our car insurance premium!. How much is car insurance per month across Canada depends largely on the value of the car and of course the year.
Heck, whether you used the car a few times or not at all, you still have to send in your monthly insurance premium checks.
What’s more, if you don’t pay your insurance premiums and you’re cut from it, you will be unable to use your car because it is illegal to drive an uninsured car.
The good news is that there are cheaper, yet effective ways to have your car insured depending on the province you stay in Canada.
This article will be exploring car insurance rates across Canada.
What is Car Insurance?
Progressive.com defines Car insurance (also known as auto insurance in some countries) as an insurance policy that covers damages to your car and protects you financially if you are liable for someone’s injuries or damages.
They can also cover your medical bills if you or your passengers are injured in an auto crash, or you are hit by an uninsured or underinsured driver.
The level of coverage your car insurance policy has is determined by the insurance package you subscribed for. This is usually clearly stated before you subscribe to a package.
Car insurance may also offer full protection against theft, if it is clearly stated in the insurance package, at the point of subscription.
How does car insurance work in Canada?
The process of insuring your car is quite straightforward.
All you need do is contact any of the available car insurance providers in your Province, have them review your car, and present you the insurance options available for your car and the cost of each.
You can then select the option you are most comfortable with in terms of insurance coverage and monthly premiums.
Car insurance policy terms are usually 6 to 12 months terms and are renewable if the owner of the policy owner wishes to.
The money paid for insurance coverage is known as “Premiums”.
An insurance holder can choose to pay the full premium upfront, or monthly, as the insurance runs its course.
Whether you choose to pay the full premium upfront or monthly, the insurance company usually reminds the insurance holder ahead of time to make premium payments, before the expiration of their previous payments.
The Premium charged by a car insurance company is influenced by the following factors:
- The type of car you drive and the anti-theft features it has.
- Your driving habits/history.
- The level of coverage you selected, etc.
The premium a car insurance holder pays is also influenced by the province they live in.
Car Insurance coverages in Canada
There are several types of car insurance coverage available to car owners in Canada. We will be reviewing them in this section.
This is the most basic insurance coverage all drivers in Canada must have.
Although the damages covered by this package vary slightly from province to province, we will be considering the areas they share in common.
They are as follows:
- Third-Party Liability (TPL).
- Uninsured Automobile.
- Accident Benefits.
Third-Party Liability (TPL)
If your mistake results in a car wreck that injured someone, kill someone or damages their car/property, TPL covers the cost of lawsuits against you up to the coverage amount offered by that insurance.
Most car insurance companies offer a mandatory coverage of $200,000. However, some drivers opt for a higher coverage amount of $1,000,000. Of course, this higher coverage comes at a higher premium.
In Nova Scotia, Ontario, New Brunswick, Prince Edward Island, and Quebec, TPL contains a component called “Direct Compensation Property Damage (DCPD).”
What does it mean?
It simply means that if you are involved in an accident where you are considered not to be at fault, DCPD coverage means your insurer will pay for repairs, without having to recover damages from the other driver.
This protects you financially in a situation where an uninsured driver/car kills or injures a person, or as a result of a hit and run by some uninsured driver.
It also covers the cost of fixing damages to your car by an uninsured driver. This type of insurance is compulsory in all the provinces in Canada.
This coverage covers the cost of medical bills if you are hurt in a car accident. It also covers income replacement, if you are unable to resume work because of the injury suffered in the accident, and funeral costs if the insurance holder passes on.
The holder of this insurance is entitled to its full coverage, regardless of who was at fault in the accident.
Unlike the Third-Party Liability, Uninsured Automobile, and Accident Benefits insurance coverage that is mandatory for all cars across Canada, the optional coverage insurance is not mandatory.
As the name suggests, this type of insurance is optional. You could choose to pay for them if you can afford it, or need the extent of coverage they offer.
They are as follows:
- Collision Coverage.
- Comprehensive Coverage.
- Specific Perils Coverage.
- All Perils.
This insurance covers you financially if you collide with an object or car, even if you were at fault or a friend was driving your car.
If your car was damaged beyond repair by this collision or accident, the collision coverage will pay for a replacement of the car.
In provinces like Manitoba and Saskatchewan, this type of insurance is listed under mandatory insurance. Even financial institutions require it before lending money to finance a car.
This insurance covers the cost of fixing damages caused by vandalism, theft, fire, natural disasters, and other hazards that may occur when a car is in use or parked and unattended.
Specific Perils Coverage
This insurance covers you financially from a specific list of perils listed out by your insurance provider in your insurance policy.
As the name suggests, this insurance protects you financially from all kinds of perils that may happen to a car, whether in use or not.
They refer to extra coverage that a car owner can add to whichever insurance package they opt for. They as follow:
Accident Forgiveness – If you have this endorsement, your car insurance provider will not count your first at-fault accident against you.
Damage to Non-Owned car – This protects you financially if you cause damage to a car that you rented.
Depreciation Waiver – This is recommended for brand-new car owners. With it, you will be paid the full value of your car following a write-off.
Family Protection – This endorsement is used when you are involved in an accident with an uninsured driver, or his insurance coverage will not sufficiently cover your claim.
Loss of car Use – This endorsement covers your transportation costs for the duration of time you are unable to use your car, because it is being fixed, after sustaining damages.
Car Insurance Cost Across Canada
Having discussed how car insurance works in Canada, we will be reviewing the cost of car insurance across Canada.
Although drivers in Alberta have a variety of insurance providers to choose from, the average monthly cost of car insurance in Alberta seems to be quite high, as it stands at approximately $140.
Mandatory car insurance in Alberta includes $200,000 in third-party liability coverage and $50,000 in accident benefits.
All drivers in British Columbia must have the ICBC’s Basic Autoplan insurance.
However, drivers in this province can also purchase additional coverage from private insurance companies. The monthly average cost for car insurance in British Columbia is $153.
Car insurance in Manitoba is provided by Manitoba Public Insurance, a special provincial agency.
Manitoba Public Insurance has an online insurance calculator that can be easily used to obtain your insurance quote. The average monthly cost of auto insurance in Manitoba is $147.
Manitoba operates a no-fault insurance system, which is a system where regardless of who is at fault, every person under the insurance claim gets covered to the full extent of their claim.
The Sole provider of car insurance in Manitoba is Autopac, a region-owned insurance company. Although, Autopac is the sole car insurance provider, there are over 300 car insurance brokers licensed to sell Autopac car insurance.
Newfoundland and Labrador
The drivers in this province pay the highest car insurance premium in the Maritimes and Atlantic Canada. The average monthly car insurance cost in this province is $100.
A key factor that contributes to the higher insurance cost in this province than in other provinces in the Maritimes and Atlantic Canada, is the fact that claims for body injuries are higher here.
In addition, the number of lawsuits associated with car accidents is also higher. These factors contribute to the higher cost of car insurance in this province.
The average monthly cost of car insurance in this Province is $112.
Mandatory third-party liability coverage is higher in Nova Scotia than in all other Provinces in Canada. It stands at $500,000, while other regions offer only $200,000.
Like Manitoba, Nova Scotia also follows a no-fault insurance program.
The average monthly car insurance cost in this Province is $95. This province has one of the lowest car insurance rates in the whole of Canada.
There is also a plethora of car insurance providers in New Brunswick, for drivers to select from.
Car insurance in this province is provided by private insurance companies and brokers. The average monthly car insurance cost in this province is approximately $98. No public car insurance is available in this Province.
The average monthly car insurance cost in this province is $112. There are a plethora of car insurance providers for drivers in this province to choose from since the car insurance providers in this province are all Private insurance companies.
It is on record that drivers in Ontario province pay the highest car insurance rates in the whole of Canada. On average, drivers in Ontario pay a monthly premium that ranges between $120 – $245, depending on the part of the province they live.
A couple of reasons are responsible for the high car insurance rates in Ontario. One of them is the fact that Ontario has the highest rate of insurance claims in the whole country.
In addition, car insurance rates are higher in Ontario because of a higher number of insurance frauds committed in the province. These factors contribute to the higher rates in Ontario.
Like Manitoba, Ontario also operates a no-fault insurance system that allows drivers to get their full claims regardless of who is at fault in an accident.
Prince Edwards Island
There is no Public Insurance in this province as private companies are the sole insurance providers. Like Ontario and Manitoba, Prince Edwards Island follows a no-fault insurance program. The average monthly cost of car insurance in this province is $78!
Quebec is the only province in Canada that uses both public and private car insurance simultaneously. Private car insurance covers property damage, while public car insurance covers personal injury. So, a driver would need to use both of them simultaneously.
The average monthly car insurance premium in Quebec is $75. Public car insurance fee is included in the driving license fees, and it covers bodily injury, or death suffered in an auto crash in Quebec or anywhere else.
This insurance is provided by the Societe de l’assurance automobile du Québec (Quebec Automobile Insurance Society).
The government of Saskatchewan is the sole provider of car insurance in this province. The monthly Car insurance premium in this province is at an average of $118.
Saskatchewan drivers must pay whatever the provincial government state as their car insurance premium since it is the sole car insurance provider in this Province.
Car insurance in this province is provided by private insurance companies. This region has one of the cheapest car insurance rates in Canada. It stands at $88!
Guidelines for obtaining car insurance in Yukon Territory can be obtained at the Yukon Highways and Public Works, Motor Vehicles Division.
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These are the various car insurance rates available in the various provinces across Canada.
Hope you found the information useful?
Thanks for reading through!