What is the insurance grace period for buying a new car in Alberta?

You're driving down a back country road, and you see that cute little sports car you've always wanted in a front yard with a for sale sign. You stop to take a look, decide this is exactly what you want, and buy it from the seller right then and there. As you get behind the wheel, for a moment, everything feels exciting, until you remember that you can't drive your new car home without valid car insurance.

In Alberta, the government gives you a 14-day grace period to transfer your old plates and vehicle registration to your newly acquired used vehicle. Handy, right? But here’s the catch: this grace period doesn’t apply to insurance the same way. Technically, you do have up to 14 days to add your new car to an existing insurance policy, but during this window, your new vehicle only has the same coverage as the car with the lowest coverage on your policy. So, if your old car only had basic liability coverage, that’s all your new one has, too.

By law, every driver must carry mandatory car insurance coverage in Alberta if they’re taking their vehicle out on public roads. Driving without proper coverage, even for a day, can lead to hefty fines, license suspensions, and massive out-of-pocket expenses if you’re in a collision. That’s why this short window matters so much. While someone who is financing or leasing a new or used vehicle is usually required to show full proof of insurance before dealerships even hand over the keys, this grace period is there to make sure everyone is still protected, even after an impulsive car-buying decision. To learn more about Alberta's grace period and what else you'll need to accomplish during that time, keep reading.

What are the auto insurance requirements in Alberta?

According to the Government of Alberta, as part of a Standard Owner's Automobile Insurance Policy, drivers in Alberta are required to carry the following three core coverages:

Third‑party liability coverage

This protects you if you're at fault in an accident, covering costs for injuries or property damage to others. The minimum required coverage limit is $200,000 in Alberta, though many experts recommend bumping that up to at least $1 million or more for added peace of mind.

Accident benefits coverage

With accident benefits, no matter who’s at fault, this covers your medical expenses, rehabilitation and lost income. Alberta’s minimum is $50,000 per person, but you can opt for higher limits

Direct compensation-property damage (DCPD) coverage

Introduced in Alberta on January 1, 2022, DCPD covers damage to your vehicle when another driver is at fault. Instead of chasing the other driver's insurance company, your own insurer handles repairs, making the claims process faster and smoother. Continuing down the policy, many drivers also choose to add the following coverages to their policy to receive more comprehensive coverage:

• Collision coverage

• Uninsured motorist coverage, known as family protection coverage or SEF44

• Comprehensive coverage

• Accident forgiveness coverage

To learn more about required and optional Alberta car insurance coverage, contact BrokerLink.

What is a grace period for car insurance in Alberta?

The term grace period in car insurance might sound simple, but it actually covers a few different scenarios, and each one works a little differently. Let's take a closer look:

Missed payment

First, there’s the grace period for a missed monthly payment. This is the most common grace period that you hear about in insurance. Most insurance companies in Canada offer you a short window, usually up to 30 days, to make a late premium payment without facing a penalty. According to the IBC, the policy remains active throughout this period.

Policy reinstatement

Then there’s the grace period for reinstating your policy. If you accidentally let your policy expire, some insurance companies offer a brief window where you can reinstate your policy without starting over completely or facing a penalty. However, unlike with a missed monthly payment grace period, your coverage does not remain active during this window. It depends on the company, but you generally have up to 30 days to try and reinstate your expired policy. This saves you from losing your loyalty discounts or facing significant penalties that could label you “high-risk.”

Out-of-province transfers

Next, you have a grace period for out-of-province transfers for when you move to Alberta from another Canadian province or territory. According to the government of Alberta, once you move here, you have 90 days to update your licence, registration, and buy Alberta car insurance. After the 90-day window ends, you must have an active Alberta-based policy, or you risk facing enforcement and fines.

Adding a new car

Finally, there’s the less commonly known grace period for adding a car to your existing policy. If you already have an existing auto insurance policy, you technically have up to 14 days to notify your insurer and add your new car. But, during that window, while you are technically insured, your new car only carries the lowest coverage level you already have on your policy.

So, for example, let's say you currently have two vehicles on your policy. One is a daily driver that has full coverage, and the other is a motorcycle that currently has comprehensive-only coverage on it while it's off the road. In this situation, comprehensive-only coverage is lower than full coverage, so your new vehicle would carry just comprehensive-only coverage until you officially add it to your policy. Here is a visualization:

Keep in mind that comprehensive-only coverage is not enough coverage to legally drive (refer to mandatory coverages above), which means you'd technically be driving uninsured for those 14 days. Also, it's important to note that this grace period generally does not count for cars that will have a different owner, such as a spouse or child. In that case, you would need to notify your insurance and add the car to the policy before you get behind the wheel.

Why do grace periods exist?

The industry rationale behind grace periods is actually very simple. Insurance providers are people, just like you, who know life can be unpredictable. Grace periods help prevent drivers from falling into sudden gaps in coverage, which can be dangerous for everyone on the road.

Can I still add a car to my policy if I've missed the grace period?

Yes, but you can’t legally drive the vehicle until you’ve added it to your existing policy or purchased a new policy for it. Starting on day 15, if the vehicle still hasn’t been added, you also won’t be able to file any insurance claims for it.

While grace periods can be a lifesaver, they’re not always guaranteed. The length and conditions vary between insurance companies, and they’re ultimately offered at the insurer’s discretion. That’s why it’s essential to read your policy carefully and to call your insurance broker or provider to confirm exactly where your policy stands. Here are two common scenarios everyone should be aware of:

Scenario A: Buying and registering within seven days

In this scenario, you were properly insured from day one, so you faced no insurance gaps, no fines, and zero complications.

Scenario B: Waiting 15+ days to update insurance and registration

In this scenario, you failed to acquire coverage on time and were caught driving uninsured. You faced several financial consequences, including fines and having to pay very expensive premiums for the next three years.

Registration details for new vehicles in Alberta

Before you register your vehicle in Alberta, you must have proof of valid insurance coverage. Without it, you cannot register your vehicle with the Alberta government. When you buy a vehicle in Alberta, you have two plate options:

In-transit permit (temporary)

In-transit permits allow you to move an unregistered vehicle for up to seven days. This can be ideal for bringing a car from another province or test-driving a new vehicle for a few days. However, it still requires valid car insurance before use.

Transfer or buy new plates

If you want to keep your existing licence plate, you have 14 days to transfer your plates and your vehicle registration to your new vehicle. After that, you must register it formally at a registry office, showing proof of insurance, ownership, and ID.

What are the legal and financial consequences of driving uninsured in Alberta?

Driving without insurance in Alberta is more than a financial gamble. It’s a legal risk with serious consequences. One unexpected stop by police or a minor fender bender could suddenly turn into a life-altering financial and legal nightmare. Under Alberta's Traffic Safety Act, driving uninsured may lead to:

Getting caught driving without insurance doesn’t just sting in the moment. It will continue to haunt you long after. If you're convicted of driving uninsured, it will show up on your insurance history and remain there for three years. Having this on your history flags you as a "high risk" driver, which generally leads to significantly higher insurance rates. And with rising vehicle and repair costs already pushing premiums higher across Canada, and even higher in Alberta, thanks to increasing auto insurance settlements, the last thing you want to do is something that will raise them even more.

Further, your current provider may decide to drop you, and they'd be within their right to do so. Then, being flagged as high risk may make it significantly more difficult to even find new coverage, let alone find affordable coverage. In fact, some insurance providers might refuse to cover you altogether, as not all providers offer high-risk coverage. However, below we outline how this differs during the 14-day grace period:

How does this work for the 14-day grace period?

As we mentioned earlier, as long as the owner of the vehicle is the same person as the policyholder, then they are given 14 days to add the new vehicle to their policy. If you’re still within that 14-day window, it’s your responsibility to add your new car to your policy as soon as possible.

If you got pulled over during that time, the officer would ask for your driver's licence, registration, and proof of insurance, and they’d see that you haven’t updated things yet. You might explain that you technically have coverage because you’re within the grace period, and if the officer decided to call your insurance company, they’d likely confirm that yes, you’re still covered under that temporary allowance.

Can you file an insurance claim during the grace period?

Yes. Despite not officially adding your new car to your policy, you can file a claim and be covered if you're in an accident during that 14‑day grace period. But it isn't all black and white. Remember, your new car will only have the lowest level of coverage you already carry, like basic liability or comprehensive-only. That means that if you cause a collision with another vehicle or a tree falls on your car during a storm, your insurer might still deny the claim. Basic liability doesn't include comprehensive coverage, which covers non-collision-related incidents like falling objects, and neither basic liability nor comprehensive-only coverage covers at-fault collision damage to your own vehicle.

Also, if your claim is approved (say you filed for accident benefits after the collision), brace yourself for extra scrutiny. Since the vehicle wasn't formally added to your policy yet, you can and should expect there to be a deeper investigation into whether you truly qualified for coverage, and when. This could delay any payouts or repairs by weeks or months as adjusters verify policy terms and timing. This is exactly why insurers strongly recommend calling them before you leave the lot or as soon as possible once you've bought it. It’s the easiest way to avoid messy paperwork, headaches, and unexpected hold-ups, and to guarantee you're fully insured. To learn more about filing an insurance claim, reach out to a BrokerLink advisor.

When does a grace period not apply for car insurance in Alberta?

While grace periods can offer a helpful cushion in some situations, they definitely don’t cover every scenario. In Alberta, there are several cases where you can’t rely on that safety net, and assuming you’re covered could land you in serious trouble. Here are a few examples:

Certain policy changes

Certain policy changes, like adding another driver mid-policy, aren’t automatically protected by a grace period. While there’s a 14-day window to report adding a new car to an existing policy, adding a new driver often requires immediate notification. Otherwise, failing to update your insurer right away may result in a claim denial.

Newcomers

If you're a new resident of Canada, your insurance coverage from your previous country won't automatically extend to Alberta. While out-of-province transfers have a 90-day grace period to switch insurance, first-time drivers who have moved to Canada must obtain car insurance before driving.

Lapsed coverage from missed payments

If your policy lapses because of non-payment, no grace period will save you. Once you've passed the initial grace period and your coverage has lapsed:

• You lose all coverage instantly

• Your risk profile takes a hit, increasing future premiums

If you continue to drive once your coverage has lapsed, you risk facing hefty fines, licence suspension, vehicle impoundment, and even potential jail time.

Alberta car insurance tips for new car owners

According to the Applied Rating Index™, in Q1 2025, car insurance premiums in Alberta increased 12.1% year-over-year. So, if you’re a new car owner in Alberta and hoping to find ways to lower your Alberta insurance costs, you’re in luck. There are plenty of ways for you to start reducing your car insurance rates today. To help you get started, BrokerLink’s insurance advisors have shared these practical tips to help Albertans trim down their auto insurance bills:

• Bundle multiple insurance policies (e.g., home insurance + car insurance) with the same insurance company for a big discount

• Purchase car insurance for multiple vehicles together for a big multi-vehicle discount

• Increase your deductible

• Enrol in driving school (for young or new drivers)

• Join a telematics program (save up to 10% just for signing up!)

• Ask about usage-based insurance if you don't drive often

• Pay auto insurance annually rather than monthly

• Put winter tires on your vehicle during colder months

• Maintain a clean driving record (e.g., no tickets, accidents, claims, etc.)

Learn more with BrokerLink

Do you still have questions about insurance grace periods in Alberta? Contact BrokerLink. We have been in business since 1991, which means we know the ins and outs of the auto insurance industry. Not only can we answer your car insurance questions, but we can also help you find a comprehensive policy at an affordable rate.

BrokerLink makes shopping for car insurance easier than ever before. Our licensed brokers are available to shop around on your behalf, compare car insurance quotes from top insurance companies throughout Canada, and unlock discounts to get you the best coverage.

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