Car insurance for new immigrants in Canada

Have you just arrived in Canada? If getting a driver’s licence is on your to-do list, here’s something you should know: no matter where you settle, having valid car insurance is a must if you plan to drive. It’s the law across the country, but the rules can vary depending on the province or territory.

Whether you’re a newcomer or a visitor, if you own a vehicle, you’ll need insurance just like everyone else. If you’re curious about how car insurance works here in Canada, here's what you need to know.

What newcomers need to know about car insurance in Canada

In Canada, car insurance isn’t just a good idea—it’s the law. The type of coverage you need and how much it costs can vary by province and insurance provider. Auto insurance protects you financially by covering repairs after a collision and liabilities like damage to someone else’s car or injuries.

Across Canada, it is a serious offence to drive without insurance. For example, in Ontario, the penalties for driving without insurance are as follows:

• Fines start at $5,000 for the first offence and can climb as high as $25,000 or even $50,000 for repeat offences.
• You can expect to lose your licence for at least 30 days, and up to a year.
• Your car could be impounded for up to three months.
• The Financial Services Regulatory Authority of Ontario (FSRAO) also adds a 25% surcharge to your fine, this may vary depending on the province.

Driving without insurance isn’t worth the risk—financially or legally. For newcomers to Canada, getting auto insurance is an essential step to driving safely and legally.

What does car insurance cover in Canada for new immigrants?

Car insurance rules in Canada vary by province and territory, including the minimum coverage you need—but don’t worry, you can’t buy less than what’s required where you live.

The differences between provinces aren’t significant, though. In British Columbia, Saskatchewan, and Manitoba, basic car insurance is sold by public insurance companies. If you want extra coverage or higher limits, private insurance companies handle those options. In other provinces and territories, private insurance companies take care of both mandatory and optional insurance. Finally, Quebec does things a bit differently: public insurance covers bodily injuries, while private insurance handles damage to cars and property.

To help you get started, we've put together a quick rundown of car insurance coverage requirements across Canada. Here's what you need to know:

Third-party liability coverage

Liability coverage is the foundation of car insurance in Canada—it’s mandatory everywhere. It covers injuries or damages you might cause to other people or their property while driving. While the minimum required coverage varies by province, it’s a smart move to go for higher limits, like $1 million or more. Why? Because accidents can lead to big financial and legal costs, and having extra coverage gives you better peace of mind.

Accident benefits coverage

Accident benefits coverage is a lifesaver, covering things like medical bills, rehab costs, and even income replacement if you’re involved in a car accident—no matter who’s at fault. Just keep in mind that the details, like benefit limits and how long the coverage lasts, can vary depending on the province. It’s always a good idea to check the rules in the province where you’re moving to.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage is like a safety net for those “what if” situations—like getting into an accident with a driver who doesn’t have enough insurance or being the victim of a hit-and-run. Whether this coverage is mandatory or optional depends on where you are in Canada. In places like Ontario and Nova Scotia, it’s included in the basic auto insurance package, while in other provinces, it’s something you can choose to add.

Direct compensation - property damage (DCPD) coverage

DCPD coverage is a unique part of car insurance in some Canadian provinces with a no-fault insurance system. It’s mandatory in provinces like Quebec, Alberta, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. While it doesn’t apply to international drivers—you’d need to be a resident of the province—it’s good to know about if you’re planning to settle in Canada.

Keep in mind that car insurance requirements can vary widely between provinces and territories. To stay on the safe side, check with your local insurance regulatory authority or talk with a local insurance broker to make sure you’re meeting all the necessary rules.

Additional coverage options for new immigrants

On top of the mandatory coverage, new immigrants can choose to add extra protection like collision and comprehensive insurance. These options are especially worth considering if you’re driving a new or high-value vehicle and want coverage for things like physical damage, theft, or other risks that aren’t related to accidents.

Collision coverage

Collision coverage might be optional, but it’s definitely worth considering. It covers the cost of repairing or replacing your vehicle if it’s damaged in an accident, whether that’s with another car, an object, or even a single-vehicle crash. It’s a great way to make sure your ride stays protected while you’re on the road. These additional coverages include:

Comprehensive coverage

Comprehensive coverage is another optional add-on that’s worth considering. It protects your vehicle from a variety of non-collision-related damages, like theft, vandalism, fire, extreme weather (think hail storms or floods), and even animal collisions. If you’ve got a new or valuable car—or you’re borrowing one—it’s a smart way to shield it from unexpected risks outside of regular accidents.

Accident forgiveness coverage

One final type of optional car insurance coverage popular among Canadian drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage varies by province

How much does car insurance cost for new immigrants?

As a new immigrant in Canada, you might notice your car insurance estimates are higher than the national average. Newcomers typically pay more than average, mainly because they lack a Canadian driving history.

Car insurance can get pricey without a driving history. Luckily, most insurance companies accept driving records from outside Canada, which can help lower your costs. Safe, experienced drivers often enjoy big discounts—sometimes 50% or more. However, some companies may not accept it, and that difference alone can significantly affect what you pay each year. Without those savings, insurance costs for someone new to driving in Canada can range from $1,500 to as much as $10,000 per year, depending on the province.

As for how your rates are calculated, for the most part, they're calculated just like anyone else’s—based on factors like your age, gender, where you live, how old your vehicle is, the make and model, and how often you drive.

How new immigrants can acquire car insurance in Canada

Getting car insurance in Canada involves a few key steps, and the process can vary a bit depending on the province you’re in. But before you begin, you'll want to make sure you bring all the paperwork you'll need with you, like proof of insurance, insurance history, driving history, and licensing documents, as they are much easier to get while you’re still in your home country. Here, we’ll explain in detail the steps newcomers should take to get car insurance in Canada:

Get a Canadian driver's licence

Before you get Canadian car insurance, you'll want to exchange your licence for a Canadian driver's licence. Some countries have agreements with Canadian provinces and territories for reciprocal licence exchanges. This means you can swap your current licence for a Canadian one without going through extra testing.

To find out if your licence qualifies, check your provincial or territorial government website. If your driver's licence isn’t eligible for an exchange, don't worry—you’ll just need to complete a written test and a road test to get your Canadian licence. Once you've received your Canadian driver's licence, you can begin your search for car insurance.

Shop around

The first thing you'll want to do is shop around with different Canadian insurance companies to get different car insurance quotes to compare prices. If you choose to work with an insurance broker, which we highly recommend, they’ll compare car insurance quotes for you. There isn’t a single provider that offers the cheapest insurance for newcomers, so it’s essential to compare quotes to find the best deal for you.

A car insurance quote is basically a price estimate for your insurance. It might be a rough number based on partial details, or it could reflect the actual price if you’ve completed a full application. Either way, getting a quote doesn’t mean you’re obligated to buy insurance from them. You can choose which quote works best for you. Just remember, quotes aren’t valid forever—most are only good for about 30 days or less.

However, if you’re in BC, Saskatchewan, or Manitoba, you don’t need to shop around for basic coverage. It’s all sold through public insurers, so the price is the same no matter which broker you use. However, if you’re looking to add optional private insurance, you can still shop around just like drivers in other provinces.

Provide your information

When you’re ready to get quotes or buy a car insurance policy, you’ll need to share some basic details so insurers can calculate your rate. Here’s what documentation you should have handy:

• Driver’s licence information for you and anyone else in your household with a licence (including family members and roommates).
• Vehicle details like the make, model, year, and vehicle identification number (VIN) for each car.
• Driving history documents to show your experience behind the wheel.
• Claim experience letters from past insurance providers, proving your claims history.

If you’ve had car insurance in Canada before, insurers can often access your driving and claim records automatically. But if all your experience is from outside Canada, you’ll need to provide those documents yourself, so be sure to gather all of that before leaving your home country.

Discuss your coverage options

Next, you'll work with the insurance provider or broker to determine the appropriate coverage options based on your needs. This will include mandatory coverages like third-party liability and accident benefits, and possibly optional coverages like collision and comprehensive insurance.

When setting up your car insurance, you’ll also need to decide on three key things: your third-party liability coverage limit, your optional coverage, and your deductibles, if you have any. Here’s what they mean:

Liability coverage limit

This is the maximum amount your insurance will pay if you’re found responsible for damage or injury in an accident. Each province has a minimum requirement—usually $200,000, but it’s $500,000 in Nova Scotia and $50,000 in Quebec. That said, it’s a good idea not to go with the bare minimum just to save money. If the damages exceed your limit, you’ll have to cover the difference out of pocket. Most Canadian insurers recommend setting your limit at $1–2 million for better protection.

Optional coverage

While some coverages are mandatory in your province, you’ve got the option to add extra protection to your car insurance policy. The most common add-ons are collision, comprehensive, and accident forgiveness (which we’ve covered earlier).

If you’re leasing or financing your car, collision and comprehensive coverage are usually required. If you own your car outright, you can skip them, but consider the trade-offs. Without collision coverage, you’ll be on the hook for repair costs if you’re at fault in an accident. Without comprehensive coverage, there’s no protection for things like theft, vandalism, fire, or other non-collision damage.

You can also consider a variety of endorsements, like accident forgiveness or roadside assistance, for even more peace of mind.

Deductible

Certain types of coverage require deductibles, including comprehensive and collision coverage. Your deductible is the amount you’ll pay out of pocket before your insurance kicks in for a claim. A higher deductible means lower premiums, but it also means you’ll pay more upfront if you need to make a claim. The most common amount for a car insurance deductible is $500.

Review, ask and purchase your new policy

Take the time to thoroughly review your insurance policy, including the coverage details, limits, deductibles, and any conditions or exclusions. Make sure you know exactly what’s covered and what isn’t. If anything is unclear, don’t hesitate to ask your insurance company or broker—they’re there to help.

Once you’ve chosen the provider and coverage that works best for you, finalize the purchase by signing the documents and paying the premium.

Afterward, you’ll receive proof of insurance, often called a pink card in many provinces. This could be a physical card or a digital version you can store on your phone, depending on your province. Either way, you must have proof of insurance with you whenever you’re driving—it’s essential for traffic stops or any situation where you need to show you’re covered.

Do temporary residents need Canadian car insurance?

If you’re planning to stay in Canada for a year or longer as a temporary resident, like an international student, you will likely need to get yourself car insurance for non-Canadian residents if you're planning on driving during your stay.

International visitors, including tourists, temporary residents and students, can benefit from choosing year-long car insurance plans. These policies often cost less overall compared to short-term or temporary options from a car rental agency, and they offer the peace of mind that comes with continuous coverage.

Speaking with an insurance professional or broker who specializes in helping international clients can make the process easier. They’ll help you find a plan that’s both cost-effective and tailored to your situation, so you can focus on enjoying your time in Canada without stressing about insurance.

It's also important to note that your international driver’s licence is only valid for a limited time in Canada, usually about three months. After that, you’ll need to apply for an International Driving Permit (IDP) from your home country or get a local driver’s licence in the province or territory where you’re staying.

Can I bring my car with me to drive in Canada?

If you're moving to Canada or are a tourist or international student who is planning to stay in Canada for an extended period, you might consider bringing your vehicle with you. Importing a car isn’t overly complicated, but there are some key steps to keep in mind to make the process as smooth as possible.

First, you’ll need to get the right import documentation from the Canada Border Services Agency (CBSA). Once your vehicle arrives, you’ll have to register it, get licence plates, and secure insurance. Don’t forget—you’ll also need a Canadian driver’s licence to officially declare your residency in Canada.

Before hitting the road, your vehicle will need to pass a safety inspection and an emissions test to ensure it meets Canadian standards. You’ll also need to provide proof of ownership, such as a bill of sale from the previous owner. Following these steps will help ensure your vehicle is fully compliant and ready to go when travelling to Canada!

How to lower your insurance rate as a new immigrant

Here are some tips to help you save on car insurance once you’re in Canada:

Bundle your insurance

As you settle into life in Canada, you’ll likely need other insurance, like home, condo, or tenant coverage. Bundling these, like home and auto insurance, through the same provider can save you up to 15%, depending on the company.

Raise your deductible

Opting for a higher deductible can lower your premiums, but make sure you have enough set aside to cover it if you need to make a claim.

Use winter tires

Not only do winter tires keep you safe in snowy and icy conditions, but they can also save you money. Insurance companies in Canada often offer a discount when you let them know your car has winter tires. You may have to provide a copy of the installation invoice, however it is worth the savings.

Work with an insurance broker

Insurance brokers help you save both time and money by shopping around for insurance on your behalf. They can gather quotes from some of the top insurance companies in your province and find you the best quote for your needs and budget. Plus, they can find you discounts, offer expert advice, and even assist with things like filing an insurance claim.

Learn more about car insurance from BrokerLink

If you’re new to Canada and need car insurance, BrokerLink is here to help make the process simple and stress-free. Just give us a call to talk about what you need, and our experienced insurance advisors will work to find you the best coverage at a great price. We can even help you figure out which cars have the lowest insurance rates.

You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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