Can I change my car insurance anytime?

For most Canadians, life is rarely static, and neither should your car insurance be. Whether you're planning a move to a new province, buying a new vehicle, have a teen that just got their driver's licence, or even retiring, your auto insurance is meant to evolve as much as you do.

Imagine this: you've just moved into a new neighbourhood, traded your old sedan for a modern SUV, and your young adult child just moved back after a year of travelling overseas. Each of these life changes can impact your insurance premiums and your level of protection at the end of the day, which is why staying on top of your insurance is essential.

With auto insurance premiums across Canada rising by 8.7% in 2024 and even higher in provinces like Ontario (12.1%), it’s more important than ever to make sure you're not overpaying for your coverage or being underinsured.

When should you switch car insurance?

Most Canadians are unaware that numerous life circumstances can warrant switching their auto insurance coverage. Here's when you should consider reviewing your current insurance policy before making any changes:

Moving to a new province or a new neighbourhood

Even if you're moving a couple of blocks down the road, you'll need to contact your insurance provider and inform them that you've moved. Whether you're purchasing home insurance or car insurance, part of your risk profile is dependent on your location, specifically crime rates, weather patterns, and other environmental hazards, which can alter your insurance rates.

Buying a new car

Upgrading to a new vehicle with advanced safety features can simultaneously help reduce your risk of serious injuries if you're involved in a collision and increase your repair costs. For example, Statistics Canada indicates that repair costs for passenger vehicles have increased by 2.3% between 2019 and 2024. Both of these factors will impact whether you need to increase or decrease your level of coverage.

Additionally, some vehicles are more prone to auto theft than others. So, if you're buying a 2021 Toyota Highlander, 2022 Dodge Ram 1500 Series, or a 2022 Lexus RX Series, your rates may need to consider upping your comprehensive coverage limits to ensure you're sufficiently protected. According to 2024 data from Statistics Canada, auto theft claims in Canada reached $1.5 billion, contributing to the 8.7% national rise in premiums. Pair that with increased vehicle repair costs, and you can see how a new car can change your premiums.

Adding or removing someone from your current insurance policy

Adding a new driver to your current auto insurance policy, such as a newly licensed teenager who is high-risk, can significantly increase your insurance costs, given their chances of being involved in a car accident. On the other hand, removing an adult child or spouse from your policy may help lower your insurance rates.

Changes to your driving habits

Are you switching from a daily commuter to an infrequent driver due to a job change? Switching from daily commuting to using your car for pleasure or working from home can reduce your mileage and potentially your rates.

Life events: Marriage, divorce, retirement, etc.

If you're getting married, you and your spouse have the option of bundling your home insurance and car insurance together for potential savings. On the other hand, retirement often reduces commuting distances and risk levels.

Car insurance mid-policy: What you can and can't change

Before switching your car insurance policy, it's important to note that there are some things you'll be able to change and others that may cause some issues. Let's take a closer look below:

What you can update

• Address: Whether you're moving to a new city, down the street, or to a new province, remember that your postal code impacts your rate. Luckily, your insurance provider will be happy to note your new address and adjust your rates accordingly.

• Vehicle details: If you buy a new car or sell one, you'll need to inform your current insurance company, should you intend to operate a new vehicle.

• Coverage limits: You can adjust your coverage limits on policies like third-party liability coverage, accident benefits coverage, or uninsured automobile coverage to prevent coverage gaps, add optional coverages, or remove collision coverage or comprehensive coverage based on your auto insurance needs.

• Deductibles: Purchased a luxury vehicle with a high replacement rate? Raising your deductible may reduce your premium, and vice versa, if you decide to lower your deductible on an older vehicle.

• Listed drivers: You can add or remove household members who drive your car at any time.

When changes may be difficult

• Switching car insurance companies: If you decide to change auto insurance providers before your renewal date, your current provider may charge you cancellation fees for doing so.

• Making changes too frequently: If you decide to switch auto insurance companies too frequently, it may appear as a red flag to providers, which could trigger a review of your customer account.

Remember that changes you make to your current coverage can not only affect your rates but also lead to cancellation fees and internal reviews if done often. Before doing so, you may want to consider speaking with an insurance broker like BrokerLink, who can help you navigate what’s worth changing and what might cost more in the long run.

How to make changes to your insurance policy

Whether you're switching car insurance policies or want to change providers, here's how you can go about doing so:

1. Contact your insurance provider or insurance broker

First, you'll need to contact your insurance company or broker. Most insurance companies are available over the phone, by email, online, or in person. Contacting a broker before your car insurance provider can help you better understand how the changes will affect your rates, and whether switching from your current insurance provider to a new provider will help you save money by comparing car insurance quotes.

2. Provide necessary documents

Depending on the changes you want to make, you may need the following documents handy:

• Proof of your new address.

• Vehicle identification number (VIN).

• New driver’s licence information.

• A bill of sale for your new car or a lease agreement to confirm your address.

• Previous auto insurance policy information.

3. Review and confirm changes

Once you've spoken with your current insurance provider or your new car insurance company, you'll need to review the changes you've made and confirm that the details of your new insurance coverage are correct and reflect your insurance needs.

4. Understanding billing implications

Should the changes to your car insurance policy result in cost savings on your premium, your current provider will issue you a prorated refund. If the changes increase your premiums, you may need to pay an additional fee.

How changes affect your insurance rates

Remember, the changes you make to your auto insurance will determine whether your rates increase or decrease. Here are a couple of common scenarios for both:

Premium increases

If your premium increases, your monthly or annual payments will rise, often reflecting changes in your risk profile or the insurer’s pricing. Common drivers of increases include:

Adding a young driver to your policy

Drivers under the age of 25 are considered high-risk by most insurance providers. Adding a young driver to your current policy will therefore increase your premiums.

Buying a luxury or high-value car

The average new car price hit $65,219 in 2024. Purchasing a new, expensive car typically increases your insurance costs due to its high repair and replacement values.

Move to a high-theft area

Moving to an urban area with high auto theft rates and traffic congestion can increase your insurance costs, while moving to a more rural area with less traffic and lower theft rates can lead to savings.

Renewing your premium after numerous traffic violations or at-fault claims

Having numerous traffic violations and at-fault insurance claims on your record will be viewed as a red flag by insurance providers, regardless of whether you change to a new company or not. Given your high-risk profile, you'll likely pay more for your insurance policies moving forward.

Premium reductions

If your premium decreases, your monthly or annual cost will go down—typically because your risk profile improved or your insurer’s pricing changed. Common reasons include:

Retiring or becoming a remote worker

A change in your driving habits, whether it be due to retirement or becoming a hybrid/remote worker, can lower your time behind the wheel and reduce your risk profile, leading to savings on your insurance.

Moving to a safer neighbourhood

Someone moving from downtown Toronto to a small town in New Brunswick might see their premium drop by hundreds annually.

Switching auto insurance companies

Switching car insurance companies after comparing insurance quotes can help you save money on your coverage.

Will my insurance rates change immediately after updating my policy?

Yes, once you've made changes to your policy, they will be in effect immediately, and your rates will either increase or decrease accordingly.

Is there a fee to update my car insurance?

It depends. Most updates are free, unless your premium increases, but cancelling mid-term or switching insurance companies may involve a fee to cancel. Always ask your provider or review your insurance documents for clarification.

Can I cancel my insurance policy at any time?

You can, but you may face a cancellation fee depending on your insurer and policy details. It’s best to consult a broker first to determine whether any fees will be applied to your account.

What happens if I don’t update my insurance after a major change?

Failing to notify your insurance company after a major life change can lead to claim denials and the cancellation of your policy altogether.

Can I make updates online?

Most of the time, insurance companies will allow you to make changes to your current policies online. However, it may be better to speak with your insurance provider directly if you have any questions or concerns regarding your coverage.

Can I still switch car insurance companies after an accident?

As auto insurance claims are handled on a “claims occurred” principle, the insurance policy in effect on the day of the incident is liable for covering any settlement payments. Therefore, whether you stay with the insurance company you had when you submitted your claim or switch to a different provider makes no difference—the “claims occurred” rule still applies.

When should I cancel my old policy?

To avoid a lapse in coverage, a new insurance policy must be in place before cancelling the old one. Driving without insurance isn’t something to take lightly, as it is a legal requirement in Canada. A lapse in your insurance coverage may come with repercussions, including increased premiums, a suspension of your licence, fines if caught, and even the repossession of your car. Furthermore, without insurance, you’re responsible for paying all costs associated with any damages or injuries if you’re involved in a collision.

Contact BrokerLink for expert advice

Your insurance should reflect your needs and lifestyle today, not last year. Whether you're moving to a new province, looking for a better rate by switching insurance companies, or making changes to your policy, the experienced brokers at BrokerLink are here to help.

With access to numerous policies from some of Canada's top insurance companies, our brokers can help you renew your insurance and purchase:

• Third-party liability

• Accident forgiveness

• Direct compensation - property damage coverage

• Uninsured motorist insurance

• Collision coverage

• Comprehensive coverage

• Accident benefits coverage

• And more!

Need help updating your policy? Speak with a BrokerLink advisor today. You can also get a free insurance quote using our online quote tool to compare car insurance quotes from multiple providers within minutes!

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