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7 minute read Published on Aug 25, 2026 by BrokerLink Communications
Car insurance isn’t something that you set up once and then never look at again. It should always reflect your current situation, including where you live, who drives your vehicle and how the vehicle is used. If those details change but your policy doesn’t, it could cause you problems later during a claim or at renewal.
Fortunately, most auto insurance mistakes are not intentional. They’re usually because of outdated information or decisions that were made without knowing how coverage actually works. This guide explains the most common car insurance mistakes made by drivers in Canada, why they matter and how you can avoid making them.
Car insurance pricing often varies quite a bit between insurance companies, even when the coverage looks similar. Things like rating models, claims experience and level of risk can all differ by insurer and even where you live.
When you stay with the same provider without comparing other options, it may result in higher premiums over time. That’s why it’s always best to shop around for new quotes, especially at renewal time or after major changes, like moving, buying a new vehicle, or adding a driver, to see if you can find a better offer. You could even try negotiating with your current provider by using a competing offer.
Beyond simply comparing multiple car insurance policies before deciding which to purchase, you need to make sure that you are comparing insurance products correctly. You can’t properly compare two quotes if the coverage details between them don’t match.
The right way is to make an apples-to-apples comparison. That means you’ll want to confirm that each quote includes the same:
Drivers and vehicles
Liability limits
Optional coverages and endorsements
Deductible amounts
Vehicle usage and annual mileage
If you see a quote with a much lower price, it may include different limits, deductibles or optional coverage than the other quote(s).
Car insurance policies are priced based on the risk details an insurer has on file about the car and the driver(s). For insurers to give you an accurate quote, they need the right information from you to see the full picture.
If your insurer doesn’t have the correct details about your address, listed drivers, vehicle, or usage, a claim may be delayed, reduced or even outright denied. Most insurers will ask for:
A valid driver’s licence
Your home address
Your vehicle’s details, including its VIN
How many kilometres you drive in a year
Your driving and claims history
If your car is leased or financed
Providing incomplete or incorrect information can affect whether your car insurance coverage applies when you need it. Some common examples include:
Not listing drivers who regularly use the vehicle
Providing an incorrect home or garaging address
Failing to disclose past claims or driving incidents
Even if the omission is unintentional, your insurance company may still treat it as misrepresentation. If they discover that the information they have doesn’t match your current situation, your insurer may adjust your premium, deny a claim or cancel your policy.
A cancelled policy can stay on your insurance record for years and will likely lead to higher car insurance premiums down the road. It can even make it difficult for you to obtain a new insurance policy. By keeping your policy details accurate and up to date, it helps make sure your coverage will respond the way you expect it to after a loss.
Each province and territory sets its own minimum car insurance requirements. For example, Ontario and Alberta both require third-party liability and accident benefits, but Ontario also requires uninsured automobile coverage, while Alberta requires direct compensation-property damage coverage. Some provinces also operate under public or hybrid systems that have their own rules.
Minimum coverage and limits are what will legally allow you to drive your vehicle on public roads. You should always confirm the current provincial minimums where you live and make sure to understand what they do and do not cover.
Many serious insurance mistakes happen not because coverage was missing, but because changes were disclosed too late. This is more likely to happen after events like moving, upgrading or modifying your car or when you start using a personal vehicle for work.
When the information they have on file is outdated, you may be paying more than necessary or less than required. If your insurer discovers any underreported information during a claim, they may reassess your insurance rates, deny your claim or decide that it invalidates your coverage altogether.
Generally, you must inform your insurer of everyone in your household who holds a valid driver’s licence, and they must be either listed on your policy or formally excluded, like with an OPCF 28A form in Ontario, but it depends on your province’s rules and insurer guidelines. This is because insurers assume that anyone living in the home may have access to the vehicle, even if they only drive it occasionally or claim they don’t use it regularly.
But when listing drivers on your policy, they should generally be assigned to the vehicle they use most often. If you own multiple vehicles, and you add every household member to each one, it could increase your premiums unnecessarily, especially if they have a poor driving record.
Anytime you purchase an auto policy in Canada, it is up to you to ensure that you buy enough coverage. This means carrying coverage that meets the minimum legal requirements in your province, while also accounting for your personal situation and any additional obligations, such as lease or financing requirements.
If your policy doesn’t meet the minimum required amount of coverage in your province or territory, your policy is not valid. Further, financed or leased vehicles are usually required to carry and maintain even more coverage for the entire term, such as collision and comprehensive. If you don’t, it can breach your loan or lease agreement and you may even find yourself facing legal action.
Although it can be tempting to purchase the bare minimum, especially when budgets are tight, it may not offer enough protection, leaving you exposed to serious out-of-pocket costs.
For example, in most of Canada, you’re required to have a minimum of $200,000 in liability coverage. However, that’s often not enough if you end up in a severe multi-vehicle accident. That’s why many drivers often choose to increase their limits to at least $1 million or $2 million. Coverage should be selected based on the risks you face, not only the minimum limits set by law.
Just as not purchasing enough car insurance coverage is a mistake, so too is buying more car insurance coverage than you need. For instance, if your older vehicle has a low actual cash value, carrying both collision coverage and comprehensive coverage may no longer be cost-effective if your deductible costs more than 10% of what the car is actually worth. A local insurance broker can help you decide whether it’s best to keep or drop optional coverages.
A deductible is the portion you must pay when you make an insurance claim before the insurance provider covers the remaining eligible costs. Some people will choose higher deductibles because they usually lower their premiums, but it also increases how much they would pay out of pocket after a loss.
That’s why it’s important to choose a deductible that you could realistically afford to pay if you had to file a claim tomorrow. If you’re unsure what car insurance deductible amount would be best for you, a broker can help you review your options.
Insurance bundling is one of the easiest ways to save money on car insurance, which is why not asking about bundling your policies together could be a big mistake. By purchasing more than one insurance product from the same provider, your insurer may give you a discount on each policy. Learn more about insurance bundling and what conditions must be met to qualify by contacting BrokerLink.
There are all types of car insurance discounts out there. So many, in fact, that not taking advantage of at least one could be another grave mistake. Many insurance providers offer discounts for things like:
Using winter tires
Opting into usage-based insurance
Driving a hybrid or electric vehicle
Installing an anti-theft device in your car
Parking in a private garage
There are even student, employment and alumni-based discounts you can ask about. To take advantage, all you have to do is ask.
While high-end or specialty vehicles can be appealing, they typically cost more to insure. In general, the higher the value of the vehicle, the higher the insurance premium. Even things like trim levels, engine options and performance features can also affect pricing, since vehicles that are more expensive or harder to repair usually cost more to fix or replace after a collision or act of theft. As a result, the insurance company will likely charge you more to protect your vehicle. That’s why it’s always a good idea to obtain a quote before purchasing a vehicle, so there are no unexpected surprises afterward.
Finding the right car insurance plan can be easier than you think, especially if you have the help of a professional broker. BrokerLink’s team of licensed car insurance advisors can help you find everything from standard auto insurance to motorcycle insurance and more.
Get started with BrokerLink by contacting us today. You can reach us by phone, email or in person at any one of our locations throughout Canada. You can also try out our free online quote tool that can provide you with a competitive insurance quote in minutes!
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