Auto insurance isn’t one-size-fits-all. With so many drivers on the road - none of whom are the same - it only makes sense that there are many different types of auto insurance.
From classic car insurance to electric car insurance, seniors auto insurance to young driver’s auto insurance, and high-risk auto insurance to occasional driver insurance, the options are endless.
Below, we break down the various types of car insurance available to Canadian drivers. No matter what province or territory you live in, what kind of car you drive, or the type of driver you identify as, there is an auto insurance policy for you.
Types of auto insurance coverage
To understand the types of auto insurance policies available to Canadian drivers, we must first explain the various coverage options. Auto insurance is mandatory in Canada, which means you must purchase a valid, up-to-date car insurance policy in order to drive.
Mandatory policies look different depending on where you live. Each province and territory sets its own rules and regulations on car insurance. Therefore, the minimum requirements in Alberta are not the same as those in Ontario and Nova Scotia, though they do share similarities.
We’re going to use the provincial auto insurance requirements in Ontario as an example. In Ontario, all drivers must hold four types of coverage: uninsured automobile coverage, direct compensation - property damage coverage, accident benefits coverage, and at least $200,000 in third-party liability coverage.
Beyond these mandatory coverage requirements, there are several optional coverages drivers can also choose to take advantage of. We describe each type of mandatory and optional auto insurance coverage below.
Third-party liability insurance
Third-party liability coverage is the most important coverage type in Canada. It provides legal protection if you injure someone else or cause property damage to another person’s property on the road.
For example, if you accidentally crash into your neighbour’s garage, rear-end another car at an intersection, or cause a collision that injures another driver, liability coverage will come in handy. This type of coverage can help pay for medical expenses associated with bodily injuries, repairs of damaged vehicles or property, and any applicable legal expenses such as court fees or settlements up to the policy limit.
All drivers in Canada, including those in Ontario, are required to purchase third-party liability coverage with their policies, though the minimum requirement varies.
In Ontario, $200,000 in third-party liability coverage is mandated, however, many drivers choose to purchase in excess of this requirement, often buying $1,000,000 or more in liability coverage.
Direct compensation - property damage coverage
Direct compensation - property damage coverage protects an insured vehicle and its contents against property damage, as long as the policyholder is not found to be liable for the accident that caused the damage.
Under this type of coverage, the insurer often pays for the repair or replacement of your vehicle directly. Note that to be eligible for direct compensation coverage, the collision must meet a certain set of criteria.
In the province of Ontario, the criteria are as follows: the accident occurred in Ontario, it involved more than one vehicle, and it involved at least one car that participates in the provincial auto insurance program.
Uninsured automobile coverage
Uninsured automobile coverage protects you and any passengers in your vehicle if you get into an accident with an at-fault driver who is either uninsured or underinsured. This type of coverage can also protect the policyholder in the event of a hit-and-run.
Uninsured automobile coverage may help pay for medical expenses, property damage, and more.
Accident benefits coverage
If you, a passenger, or a pedestrian requires medical attention following a collision, accident benefits coverage can help.
You can claim this coverage no matter who is liable for the accident. It can help pay for loss of income or medical expenses that may not be covered by health insurance, like prescription medications, physical therapy, or rehabilitation.
Collision coverage is an optional type of coverage that can be added to your auto insurance policy. If you get into an accident with another car or object on the road, no matter who is at fault for the accident, collision coverage can help cover the costs.
Under the collision coverage portion of your policy, you can be reimbursed for the costs of property damage that resulted from an accident, such as a vehicle repair. Another benefit of collision coverage is that you do not need to wait for an insurance payout from the other driver’s insurance provider, which allows you to take care of your vehicle repair quickly.
Comprehensive coverage, also known as parked car insurance, is another type of optional coverage available to Canadian drivers. This coverage provides peace of mind because it protects against a wide range of unforeseen incidents, aside from collisions.
Comprehensive coverage will pay to repair damage caused by any insured peril. You can choose which perils to include in your policy. Options typically include theft or attempted theft, lightning, vandalism, rising water, earthquakes, hurricanes, fires, a riot, explosion, or other civil disturbance, falling objects, hail, windstorm, falling or forced landing of an aircraft, and more.
You may choose to include some of these perils, known as specified perils coverage, or all of these perils, known as all perils coverage, with your comprehensive car insurance policy.
Accident forgiveness coverage
Accident forgiveness is an optional add-on that can be purchased with any type of car insurance policy in Canada. This type of coverage is often recommended for new drivers or high risk drivers as it prevents the insurance company from raising your rate after your first at-fault accident.
Please note that accident forgiveness coverage will only stop the insurance company from increasing your premium after the first collision, not any collisions thereafter.
Waiver of depreciation
A waiver of depreciation is another optional add-on designed for leased and financed vehicles. Waivers of depreciation cover the entire replacement value of the car with no depreciation for two years.
Loss of vehicle use
One final type of auto insurance coverage available to motorists in Canada, which is also optional, is loss of vehicle use coverage. This can help pay for vehicle accommodation expenses in the event your car is out of commission due to an insured risk or peril.
To learn more about car insurance coverage in Canada, contact BrokerLink. We are car insurance experts who know the ins and outs of the industry and can help you find the best coverage for your needs, lifestyle, and budget.
Types of car insurance by vehicle type
Now that you know what types of car insurance coverage are available to Canadian drivers, let’s delve into the next category of auto insurance: auto insurance by vehicle type. Some motorists might find it easier to shop for car insurance based on the type of car they drive.
If you drive a specialty vehicle, such as an electric car, a classic car, or a convertible, you may require a unique type of auto insurance. We outline the basics of these policies below.
Electric car insurance
Electric car insurance is designed with the needs of electric vehicles (EVs) in mind. As the popularity of hybrid and electric vehicles skyrockets, more and more Canadians are purchasing eco-friendly vehicles. But no matter what type of vehicle you buy, you need car insurance, which is why electric car insurance was born.
Whether you drive a Hyundai KONA Electric, Chevrolet Bolt EV, Hyundai Ioniq 5, Nissan LEAF, or Tesla Model X, BrokerLink can help you find the right policy to protect your beloved EV.
Plus, we can help you take advantage of the discounts some insurance companies offer to drivers of electric and hybrid vehicles.
Classic car insurance
Classic car insurance is designed to protect drivers of collector, classic, and vintage vehicles from financial losses. Whether your vintage vehicle is driven for pleasure or investment purposes, it is an asset that must be protected.
Too many drivers make the mistake of insuring their classic car with a standard auto insurance policy. However, standard auto insurance is usually inadequate for classic cars, not to mention the fact that you may be paying more than you need to.
Since classic cars appreciate in value and are driven far less than everyday cars, they have unique insurance needs.
Thankfully, insurance brokerages like BrokerLink offer a wide range of flexible and customized auto insurance policies for collector cars.
Convertible car insurance
Many Canadians dream of owning a convertible. If you finally made that dream a reality and purchased a convertible vehicle, you’ll need the right type of auto insurance to go with it. No matter what kind of car you drive, you will need to purchase a policy that meets the mandatory auto insurance requirements in your province or territory.
However, since convertibles are unlike other vehicles, there are a few other factors that will need to be considered. For example, whether you own a soft top or hard top convertible and whether your convertible is classified as a “high performance vehicle” or a “sports car” can both impact your convertible car insurance.
When you partner with BrokerLink, we will make sure to find the right policy for you and your convertible.
Types of auto insurance by driver
The type of auto insurance available to Canadians can also be broken down by the category of driver. As mentioned, no two drivers are the same, which is why there are so many different policies out there.
Whether you’re a senior driver, a driver under 25, an occasional driver, or a high risk driver, you can find an auto insurance policy that meets your needs.
Young driver insurance
Young driver insurance is a type of auto insurance designed for drivers under the age of 25. For those that don’t know, age is a major factor used to determine insurance premiums in Canada, with young drivers typically paying the most for car insurance.
Insurance companies see a direct correlation between age and risk level. From their point of view, new drivers have little to no driving experience, which means their odds of getting into accidents are greater. Since young drivers are considered bigger liabilities, insurance companies raise their rates.
That said, there are ways that young drivers can save money on auto insurance, such as by enrolling in and graduating from an approved driving program. BrokerLink is dedicated to helping drivers under 25 find quality car insurance policies that don’t break the bank.
Occasional driver car insurance
Occasional driver car insurance is designed for those who do not drive frequently. Occasional drivers can be added to an existing car insurance policy and can be anyone from a family member or spouse to a friend, neighbour, or roommate.
Please note the difference between a primary driver and an occasional driver: The primary driver of a vehicle is typically the person who purchases the vehicle, buys the auto insurance policy, and primarily operates the vehicle. In contrast, the occasional driver (also referred to as the secondary driver) also drives the vehicle, but this person only does so on an occasional basis.
The rule of thumb is that the occasional driver must operate the vehicle less than 50 percent of the time. For example, if you use the car to drive to church once a week or to pick up your children from school three times a week, you will likely be considered an occasional driver.
It’s worth noting that adding an occasional driver to your car insurance policy may not significantly increase the cost, especially if this driver has a stellar record.
Seniors' car insurance
Seniors' car insurance is designed with drivers over the age of 60 in mind. These drivers often have unique auto insurance coverage owing to their decades of driving experience and risk level. BrokerLink’s insurance advisors have helped thousands of seniors aged 60 and above find quality car insurance plans in Canada.
We will find a policy that best suits your age and driving experience.
Facility/high-risk car insurance
If you’re a Canadian driver with a poor driving record, then you might benefit from a type of auto insurance known as facility car insurance. This is designed for drivers who are deemed too high risk for an insurance company to underwrite them for a standard auto insurance policy.
For example, if you have been involved in several accidents, received multiple speeding tickets, or been charged with impaired or careless driving, you may have a poor driving record. As such, finding car insurance can be difficult but not impossible.
You may also have a record of insurance coverage cancellations due to missed payments. The good news is that many insurance providers in Canada offer facility insurance to high-risk drivers.
Though they are typically more expensive, they provide an opportunity to get back on track and out on the road again.
Food delivery driver car insurance
Food delivery driver car insurance is another type of auto insurance policy in Canada. These are designed for Uber Eats drivers, Skip the Dishes drivers, and the like. Food delivery driver car insurance ensures you are protected at all times on the road, not just when you are doing your job.
Though some companies like Uber have car insurance coverage built into each driver’s contract, this fleet insurance coverage only protects the driver when they’re online using the delivery service’s app.
Specifically, this means that a food delivery driver is only insured when they are actively waiting for a request, driving to the restaurant for pick-up, or driving to the customer’s house for drop-off. Therefore, they require personal auto insurance to protect them anytime they are on the road for reasons other than their food delivery job.
To find the best coverage, enlist the help of a trusted insurance broker from BrokerLink and let them know that you use your vehicle for both personal and commercial purposes. When Uber Eats drivers purchase their own car insurance policy on top of the insurance coverage provided by Uber, they will benefit from twice as much property damage or third party liability protection.
How do I know which type of auto insurance I need?
The type of auto insurance you need, as well as your policy limit, ultimately depends on your unique circumstances. Where in Canada you live, how old you are, what type of car you drive, and your past driving record can all help you determine the best auto insurance coverage for your needs.
At the very least, you are required to purchase enough car insurance coverage to meet the minimum requirements set by your province. However, provincial minimums are often inadequate, failing to provide the necessary financial protection in a wide range of scenarios.
Therefore, if you want better coverage, you may need to consider additional coverage types suited to your specific needs, as well as coverage limits in excess of the minimum requirements.
Contact BrokerLink today to receive a professional, unbiased opinion on the right type of auto insurance for you. BrokerLinks works independently of insurance companies, which means we take a customer-first approach to car insurance.
We will take the time to understand your lifestyle and from there, can offer objective advice on the best type of car insurance coverage for you and your family.
How do insurance companies calculate premiums?
When purchasing any type of car insurance in Canada, your insurance provider will calculate your premium using a variety of factors. Some of these factors are within your control while others are not.
Below is a list of the most common factors that impact the cost of car insurance in Canada.
- Where you live (and work - if you drive to work)
- Make and model of vehicle
- Driving record
- Driving experience
- Past claims
- Annual mileage
- Prior insurance coverage
- Marital status
- Your deductible
- Local laws
- How you use your vehicle
Purchase any type of auto insurance through an insurance broker
If you’re ready to purchase auto insurance in Canada, partner with a local broker. Reputable insurance brokerages like BrokerLink employ teams of licensed insurance brokers who can help you find the best coverage at the most affordable price.
Here at BrokerLink, we are experts in all types of car insurance. Whether you’re looking for seniors car insurance, occasional driver car insurance, collector car insurance, or facility car insurance, we can help. Check out a few of the top reasons to purchase auto insurance through an insurance broker in Canada.
Brokers work independently
Brokers do not work for insurance companies. They work independently, which allows us to put our customers’ needs first.
Brokers do the work for you
Another reason to work with an insurance broker is that they do the work for you. From the moment you contact BrokerLink, you will be assigned a dedicated insurance advisor who will work behind the scenes to obtain quotes, compare coverage, and unlock discounts on your behalf.
BrokerLink advisors are auto insurance experts
With over 30 years of experience in the insurance industry, BrokerLink is made up of auto insurance experts. Our resources and expertise have helped thousands of Canadians find quality auto insurance policies.
How to buy auto insurance in Canada
Follow these three steps to find the right auto insurance policy for you.
1. Contact an insurance broker
The first step to finding the right auto insurance policy for you is contacting an insurance broker. When you contact BrokerLink, we will learn about your unique needs, lifestyle, and budget so that we can find the best type of auto insurance for you.
2. We shop around for you
BrokerLink will spend as long as it takes shopping around for the right coverage on your behalf. We contact Canada’s top insurance companies to obtain quotes and determine which one has the best coverage at the lowest rate.
3. You get a great rate
The third and final step to buying car insurance is getting a great rate. Since BrokerLink’s insurance advisors are licensed insurance experts, we know where to look for the best deals. Once we’re done comparing quotes and unlocking discounts, we will present you with multiple policy options to choose from and you can pick the one that’s right for you.
Contact BrokerLink to learn more about the types of auto insurance available to drivers in Canada
For more information on the different types of auto insurance or to request a free car insurance quote, contact BrokerLink today. Any one of our insurance advisors would be happy to explain the various auto insurance policies available to Canadian drivers or provide you with an accurate estimate.
Simply give us a call, send us an email, or visit us in person at one of many locations throughout Canada. No matter how you contact us, an expert will be ready to assist you.
You can also get started right now by using BrokerLink’s online quote tool to request a free auto insurance quote. Within minutes, you will receive an accurate, competitive, and obligation-free quote on any type of auto insurance you wish.
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