Car insurance for newcomers to Canada

Newcomers to Canada who are first-time car buyers or planning to get a car lease will need insurance before hitting the open road. At BrokerLink, we understand that car insurance for newcomers to Canada can be confusing, which is why we're here to break down everything you need to know to ensure you're sufficiently protected while behind the wheel.

Is my international driving permit valid in Canada?

It depends on where your home country is and your driver's licence classification. Generally speaking, most insurance companies will accept your driving history and foreign driver's licence. However, to be safe, we suggest requesting your foreign insurance history from your insurance company before entering Canada, as you may need to provide proof upon registering your vehicle and buying your Canadian car insurance.

Can I drive a car without auto insurance in Canada?

No, auto insurance in Canada is mandatory for all drivers who wish to operate a motor vehicle on public roadways. That said, the types of insurance coverage you are required to purchase, as well as the minimum coverage requirements for these policies, will vary between provinces.

Types of car insurance for newcomers

As we said, car insurance in Canada is legally required. However, there are also optional types of auto insurance that you can purchase in order to supplement your overall car insurance plan. Ultimately, when shopping for vehicle insurance, you'll need to decide how much coverage you want and whether you want to add any optional coverage. Here's a closer look at mandated and optional car insurance policies you'll need to consider:

Mandatory car insurance coverage

In the following section, we will explore the different types of mandatory car insurance coverage, which include various essential protections for drivers and their vehicles.

Third-party liability coverage

Third-party liability car insurance is mandatory for all drivers, regardless of which province or territory they choose to reside in. The purpose of liability coverage is to protect policyholders in the event they cause property damage or bodily injuries to a third party while operating their motor vehicle.

In the event a lawsuit is filed against you for damages, your liability protection will kick into place and cover the cost of medical bills, legal fees, funeral costs, and other expenses associated with your settlement up to your policy limits. In most provinces, the minimum liability coverage requirements are $200,000. However, to ensure they are sufficiently protected, most drivers tend to opt for coverage limits up to $1 million.

Accident benefits insurance

Accident benefits are another type of mandatory car insurance policy in Canada, except for those living in Newfoundland. If you are involved in a car accident that injures you, your passengers, or any pedestrians involved, accident benefits coverage will kick into place and cover the costs of medical bills, rehabilitation expenses, and other fees associated with your recovery up to your policy limits. Note that accident benefits will provide coverage regardless of who is at fault for the collision.

Uninsured motorist coverage

Next, we have uninsured motorist insurance, which is legally required in all Canadian provinces. This auto insurance protects policyholders if they are involved in a collision with an at-fault driver who is either uninsured or underinsured by ensuring that they are fairly compensated for the damages to their vehicle. Uninsured motorist coverage also protects policyholders if they are involved in a hit-and-run accident where the other driver flees the scene before they are able to exchange information.

Direct compensation - property damage

This policy protects motorists who have been involved in an accident for which they were not at fault. If your car is damaged, you will be able to deal with your own insurance company directly rather than negotiating with the other driver's provider, resulting in a more fair and efficient claims process. This coverage may or may not be mandatory in your province, it’s best to check with your local insurance advisor to ensure you have all the necessary coverages.

Optional car insurance in Canada

Below, we will explore the various types of optional car insurance coverage available in Canada, offering different protections for drivers and their vehicles.

Collision coverage

Collision car coverage is a type of auto insurance that many Canadians opt to include in their overall insurance plan. The purpose of collision coverage is to cover repair costs if your vehicle is damaged in a collision in which you are found at fault.

Note that before collision insurance kicks into place, the policyholder is required to pay a deductible to their insurance carrier before this policy kicks in and pays for the remaining repairs.

Comprehensive coverage

Comprehensive coverage is similar to collision insurance in the sense that it will pay for repairs your vehicle requires. However, the main difference between these two policies is that comprehensive car coverage will compensate you for repairs following a non-collision incident. Common perils included in this insurance policy include theft, vandalism, falling objects, severe winds, and fire damage.

Again, if you need to file an insurance claim under your comprehensive policy, you will need to pay a deductible to your insurance provider before they will cover any remaining expenses.

Accident forgiveness

One final type of optional car insurance coverage popular among 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.

What is no-fault insurance?

All provinces and territories in Canada operate using what is known as no-fault insurance. So, what exactly does this mean? For starters, it doesn't mean that no one is at fault for the collision. Essentially, no-fault insurance requires all drivers who were involved in an accident to deal with their own insurance company, regardless of who initiated the collision. If you have to submit a claim, you will need to do so through your own insurance provider, regardless of the circumstances surrounding the incident in question. Based on the terms of your coverage, the insurance provider might reimburse you for various expenses like medical bills, lawyer fees, and repairs.

Regardless of its name, your insurance provider will still determine who is at fault for the collision. This means that if you are at fault, you could experience a higher insurance premium the next time you're up for a renewal. If you are not at fault, you won't need to worry about your insurance rates increasing.

Public insurance vs private insurance

Beyond no-fault coverage, it's important to note that Canada operates under both a public insurance system and a private insurance system, depending on which province or territory you reside in. For example, British Columbia operates under public insurance, meaning that all motorists in the province have insurance with the same provider, which, in this case, is the Insurance Corporation of British Columbia (ICBC). Because they have a public system, comparing multiple quotes from different providers and potentially getting better rates elsewhere isn't possible as it's all regulated by the provincial government.

In contrast, provinces like Nova Scotia, Ontario, and Alberta operate under a private insurance system. This means that multiple insurers operate within these provinces. These insurance providers offer different insurance rates and auto insurance, allowing motorists the opportunity to find the best car insurance for their needs and save money doing so.

What documents do newcomers to Canada need when getting car insurance?

Before purchasing any type of insurance, you'll need to make sure you have the right documents with you. Now, you may be thinking, as a newcomer, "What documents do I need for car insurance?" Here is what you need to make sure you have ready for your appointment:

• Current policy number and renewal date if you have one already in Canada.
• Years of prior insurance from your home country.
• Vehicle details, including the year, make and model of your vehicle.
• Vehicle Identification Number (VIN).
• Your driver's licence.
• Driving history from your previous insurance company, including any previous Canadian driving history you may have.
• Whether or not you will use your vehicle for business purposes.
• How far you drive on average each year.
• Any information regarding traffic tickets or any other infractions you may have on your licence.

What does car insurance cost for newcomers to Canada?

All insurance companies in Canada use a pricing structure to determine what customers will pay for their car insurance. While the factors used to generate your driving profile may vary between providers, here's a general overview of what they will look at:

Your age and gender

Young drivers with little to no experience behind the wheel, as well as males, are statistically more likely to get in a collision compared to others. Because of this, until you are around the age of 25, you can anticipate paying a higher premium than those who have more years of driving. In the event that you only get your licence after the age of 25, you may not be able to take advantage of the lower rates until you become a more experienced driver.

Claims history

The more claims and infractions you have on your record, the more of a risk you'll be to insure. As a result, you'll likely pay more for your insurance than others. To ensure you get the best car insurance rates available, maintaining a clean record, following the rules of the road, and driving safely are essential.

Where you live

Another major factor that will influence your insurance rates is what part of Canada you choose to live in, including whether you live in an urban area or a more rural one. Living in a bustling urban area with a higher population naturally brings more traffic, which increases your chances of getting into an accident. Urban areas also have higher crime rates, which can play a factor in your premiums as well compared to a quieter area with fewer people.

How often you use your vehicle

Whether you use your vehicle for work or drive long distances each day, how often you use your car can also play a role in your costs for car insurance as a newcomer to Canada.

How to save money on your auto insurance policy

While your driving profile may lead to higher insurance costs in Canada, there are ways you can lower your premiums to save money on your coverage. Here are some tips you can use when purchasing car insurance in Canada for the first time:

Work with an insurance broker

One of the best things you can do right off the bat is work with a broker rather than an insurance provider directly. Brokers work independently from insurance providers, allowing them to shop around, compare car insurance quotes, and customize your coverage depending on your unique needs free of charge. Brokers are also great sources of information and can provide you with unbiased advice when choosing certain insurance options.

Compare car insurance quotes from more than one insurance company

Whether you work with a broker or not, comparing car insurance quotes is one of the best ways to save money on your policies. By looking at different providers and policies, you can find an insurance plan that fits within your budget without sacrificing the overall level of protection you have from your plan.

Bundle your home and auto insurance

If you own a home in Canada or rent from a landlord, bundling your car and home insurance can help lower your rates. Most Canadian insurers offer discounts to customers who purchase more than one type of insurance policy from them. You can even bundle it with your tenant insurance! So, if you already have other types of coverage purchased, consider working with the same insurer for your car insurance. Not only will this help you save on your premiums, but it will also make managing your policies easier.

Ask about insurance discounts

Speaking of discounts, did you know that there are several other opportunities to save on your car insurance? Common discounts include having a good driving record, being a member of a professional organization, installing winter tires or security features like dash cams on your car, attending an accredited safe driving course (young drivers), and more.

Pay for your insurance premiums upfront

If you can afford to do so, consider paying for your auto insurance upfront rather than month-to-month. Insurers typically add a fee to those who pay monthly as it costs them money to process your payment each month. So, by paying your car insurance upfront, you can avoid these added fees and lower your premium.

Review your driving habits

Lastly, make sure to consider what your current driving needs and habits are. By doing so, you can choose what type of policies you need, your coverage limits, and your deductible amount, ensuring that you don't pay more for coverage you don't need. Additionally, by increasing your deductible amount, you can potentially lower your premium further, as you will be agreeing to pay more money at the time of a claim, which lessens the financial burden of your provider. Just keep in mind that this option should only be chosen if you can afford to do so.

Maintain a clean driving record

With the way car insurance works, one of the best ways to save on your premium is to maintain a clean record and avoid demerit points, traffic tickets, and other infractions. Many insurance companies reward safe drivers as it prevents claims from being filed, which saves them money in the long run. In the meantime, brush up on safe driving tips from BrokerLink!

How much does insurance cost per month in Ontario?

If you're a newcomer to Ontario, you may be wondering, "How much is car insurance cost per month in Ontario?" On average, residents of Ontario can anticipate paying around $150 monthly for their car insurance. That said, this number can vary significantly based on numerous factors, including your insurance history, your driving record, the status of your foreign driver's licence, the types of auto insurance you choose, where you live in Ontario, and more. For example, those living in Toronto may pay more for their Toronto car insurance compared to those living further away from the downtown core, given there is less traffic and lower crime rates. If you're searching for the cheapest car insurance available in Ontario, we recommend working with an insurance broker who can help you compare rates and find the best coverage possible that fits your needs.

Can non-residents get car insurance in Canada?

Yes, non-residents of Canada are able to purchase car insurance without having citizenship. However, you will need to provide proof of your foreign driver's licence or a Canadian driver's licence at the time of your appointment. Alternatively, if you live with a family member who has Canadian citizenship, you may want to consider being added to their car insurance policy as a secondary driver.

Is it safe to buy car insurance online?

Yes, you can purchase car insurance online. However, if you are a newcomer to Canada, you may find the process overwhelming, which is why we recommend working with an insurance broker. With different insurance requirements per province and numerous insurance providers operating in Canada, navigating the insurance world without prior knowledge of how things operate can be confusing. Luckily, by working with an insurance broker, you can get answers to any questions you may have, compare auto insurance rates, and find policies that reflect your driving habits and budget.

Does Canada recognize foreign driver's licences?

If you are visiting Canada for a short period, you may want to consider applying for an international driving permit before your stay. Doing so will allow you to get a rental car and drive across the country for a determined amount of time. However, if you are permanently moving to Canada, it is in your best interest to apply for a Canadian driver's licence as soon as possible as there are limits to how long you can use your foreign licence.

How long does it take to get car insurance in Canada?

Generally speaking, your appointment to get car insurance in Canada should only take around 30 to 60 minutes. To make sure that the process goes as smoothly as possible, have all of your required documents ready to go such as your vehicle information, previous history, licence, and other information.

Contact BrokerLink for affordable car insurance rates

Whether you're renewing car insurance or purchasing an insurance plan as a newcomer to Canada, we understand that the insurance world can be confusing, which is why the brokers from BrokerLink are here to help you navigate any uncertainties.

With years of experience and access to multiple auto insurance policies from top Canadian insurers, BrokerLink is able to help you compare rates from multiple insurance providers, access discounts that can lower your insurance premiums, and answer any questions you may have regarding auto insurance in general.

If you're interested in working with BrokerLink, don't hesitate to visit us at one of our many locations across Canada. If there's no BrokerLink in your neighbourhood, you can still contact us over the phone or by email.

And, if you're simply browsing for auto insurance, take advantage of our free online quote tool to get a competitive and tailored quote in only a few minutes.

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