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Alexandra Bosanac

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Alexandra Bosanac About Alexandra Bosanac

Alexandra Bosanac, content manager at, focuses on auto insurance. She has covered the topic since 2017. Alexandra holds a bachelor’s degree in journalism from Toronto Metropolitan University. Prior to joining in 2021, she contributed to publications such as Canadian Business, the Toronto Star, the National Post, and the CBC.


Content Manager

Updated On

May 22, 2024

How car insurance works in Canada

Car insurance is mandatory in all provinces and territories.

There are serious consequences for driving without insurance. These include having your license suspended, your car impounded, and fines. In Ontario, the fines range from $5,000 to $50,000; in Alberta, they range from $2,875 to $20,000.

Plus, your insurance premiums will increase (the larger the fine, the more significant the increase).

So why aren’t other forms of insurance, like life and home insurance, not legally required? Car accidents take a toll on society. Victims likely wouldn't be able to access crucial support without mandatory insurance. Having a clear system for resolving disputes also ensures the courts don't get tied up.

Regulation at the federal and provincial levels

Insurance is regulated at both the federal and provincial levels.

The vast majority of the property and casualty insurance industry is federally regulated. The Insurance Companies Act governs all federally incorporated or registered insurance companies in Canada.

The Financial Consumer Agency of Canada (FCAC) is responsible for administering sections of the Act that deal with consumers' rights and monitoring insurance companies' compliance with the law.

The Office of the Superintendent of Financial Institutions (OSFI) regulates the solvency and financial soundness of property and casualty insurance companies.

Then, each province and territory have their own Superintendents of Insurance. These bodies regulate the products offered by insurers and their conduct in the marketplace (underwriting, rating, marketing practices, and handling of claims). The Financial Services Regulatory Authority of Ontario (FSRA) regulates the car insurance industry in Ontario. The Alberta equivalent is the Alberta Automobile Insurance Rate Board (AIRB).

Private vs. public car insurance markets

Canada has a patchwork of insurance markets. The provinces get to decide what delivery system they want, which is why some have private insurance markets (where you buy insurance directly from a company of your choice), and others have public insurance funded by taxpayers.

In the public system, insurance is dispensed by a Crown corporation (B.C., Saskatchewan, and Manitoba). Enrolment is automatic when you register a vehicle.

Quebec’s system can be described as semi-public. The public insurer only regulates insurance for bodily injuries, while private insurers provide physical damage and liability.

Provinces with private auto insurance systems (Ontario, Alberta, all the territories and Atlantic provinces) have laws preventing drivers with less than stellar driving and insurance records from being refused insurance coverage. This is called an all-comers rule.

The all-comers rule aims to stamp out business practices that dissuade troubled drivers from getting a quote. If you have poor driving and insurance histories, your insurer might bring you on as a customer — but your premium will be much higher than the average driver's.

The differences between provinces don't stop there.

Tort vs no-fault insurance

Tort insurance was once the dominant claims resolution methodology in Canada. A tort is a legal concept that refers to civil wrongs that inflict pain and damage to another person due to negligence.

Under a tort auto insurance system, some insurance accident benefits are included in a standard policy, but they’re limited compared to the benefits in no-fault systems. If someone else’s actions injure you, you must sue to cover your expenses.

No-fault coverage means you get comprehensive benefits regardless of who's at fault for causing the accident. In exchange, your right to sue for pain and suffering is limited.

Ontario, Nova Scotia, New Brunswick, Quebec, P.E.I., and B.C. operate under a no-fault system.

In Saskatchewan, you can decide whether you want a tort or no-fault accident benefits package.

Alberta doesn't fit into either the no-fault or tort category, either. It is a primarily tort-based system with some facets of a no-fault one. In 2022, the province introduced direct compensation for property damage (DCPD), which means your insurance company will pay for repairs to your vehicle if you're not at fault for a collision (no need to get lawyers involved). This type of coverage is usually only found in provinces with no-fault frameworks.

On the other hand, you can sue the at-fault party for damages in Alberta (a hallmark feature of the tort approach).

Geography and auto insurance

To get even more granular, insurance premiums are dictated by geographical boundaries.

Most insurance companies use postal codes to determine the boundaries. However, the province can get involved and set restrictions on rating territories.

Types of car insurance coverages in Canada

Since you can't legally operate a car without insurance in Canada —driving is an inherently risky activity — auto insurance policies are tightly regulated and standardized.

However, the provinces get to determine what constitutes mandatory and optional coverage.

The maximum amount an insurer will pay to an insurance policyholder varies in each province and territory.

Liability and accident coverage is mandatory in most provinces, while insurance that covers damage to the body of the car and personal effects is optional (with some exceptions).

Insurance endorsements are a kind of optional coverage. They're policy change forms that alter standard policies in ways that optional products don't. Endorsements can enhance or reduce your existing coverage.

See the mandatory coverage for your province here.

Mandatory insurance

  • Third-party liability: This benefit covers you from claims from a third party when you have an at-fault accident. It protects you if you cause damage to someone else's property, bodily injury or death.
  • Direct compensation property damage: This covers damage to your vehicle if the other person was responsible for the accident. Your car insurance company compensates you.
  • Uninsured automobile protection: Provides extra coverage if you're in a collision with a driver that does not have third-party liability coverage.
  • Accident benefits: Protects you from injury in a collision, whether you are the driver, a passenger, a pedestrian or a cyclist.

Optional insurance

  • Collision: This coverage protects your vehicle against damage from a collision with another car. Your insurer will pay to repair or replace your vehicle if you are at fault
  • Comprehensive:  Covers damage to your vehicle that wasn't caused by a collision, like theft, hail, vandalism, and more.
  • Specified perils: This coverage protects against damages caused by named perils, such as theft, attempted theft, explosions and natural disasters like fire or lightning. Only risks specified in the policy are covered.
  • All-perils: This coverage is a combination of both collision and comprehensive insurance. All-perils coverage protects your vehicle from all causes of loss except those directly mentioned as exclusions in your policy. It also provides additional protection if another driver steals or damages your car.


  • Suspension of coverage: This allows you to suspend your insurance coverage for 30 days or more during periods when you aren't using the car.
  • Transportation replacement (Loss of use): Provides compensation to pay for other means of transportation if your car is unusable due to a covered risk.
  • Liability for damage to non-owned automobile(s): Covers damage caused to a rented or leased car.
  • Accident forgiveness: Ensures your premium will not increase after your first at-fault collision for as long as you remain with the same insurer.
  • Waiver of depreciation: Ensures your insurance company won't factor in depreciation when settling a claim; you will receive the amount you initially paid for the car.
  • Family protection coverage: Ensures your costs are covered if you and your family are involved in an accident with a driver with less liability insurance than you. This endorsement will cover the remainder.
  • Limited glass: For a lower premium, you can limit or exclude any coverage for glass damage that might've been in your policy.
  • Fire and theft deductible: Adds a deductible (an amount you must pay before your insurance company chips in funds) for a theft or fire damage claim.

What is a car insurance quote?

A car insurance quote estimates what you’ll be charged for car insurance both monthly and annually. You can get a quote from a broker, an agent, or an insurance comparison site like

Regardless of the route you take, you’ll be asked intake questions before you can see your quote. Your answers provide a general picture of your insurance needs.

Every car currently in use must have insurance – it's illegal to operate without it. Because of this, your auto insurance quote will automatically include the minimum coverage required to operate a car legally.

You’ll also have a chance to state whether you’ll need optional insurance forms; this will be factored into the quote you get.

Here’s what you can expect to be asked during the quoting process:

  • Your age
  • Your gender
  • The date you received your license
  • Your car’s make, model, and year
  • Where you park your car overnight
  • Whether your car is leased
  • The number of kilometres driven to work one-way
  • Whether you would like your insurance to include comprehensive and collision coverage

Auto insurance policies are standardized. However, there’s still a wide variance in how much one company charges for coverage versus another one. It's important to compare quotes from a variety of providers. With car insurance rates increasing (and the cost of living in general), it’s more important than ever to find savings where possible.

Factors that impact your car insurance quotes

Whether you’re getting car insurance for the first time or looking to renew your current policy, many factors shape your car insurance premium, from car type to driving record.

Below are some factors that insurers use to determine your insurance premium.

Your vehicle type

Insurance companies have different rates for different car makes and models. The insurance company looks at a few things when determining your rate: the chances of your car being stolen or damaged in an accident. Certain vehicles have a higher risk of being stolen than others. According to the Insurance Bureau of Canada, Ford pickup trucks and Toyota SUVs attract thieves most often.

Insurance companies also consider how much it might cost to repair your car if you get into an accident. Generally, rates tend to be higher for newer cars, especially sporty models, but safety and driver-assisted features may help lower your premium.

If you’re curious about how your car measures up, find out which makes and models are the cheapest to insure.

Your age

Most drivers can expect to see their car insurance rates decrease for the first time when they reach the age of 25. Up until this point, young drivers, especially young male drivers, are considered high-risk due to the increased likelihood of getting into an accident and having to file a claim. Building a safe driving record and insurance history will result in a cheaper car insurance premium over time.

As you age, car insurance typically gets cheaper again when you reach 50 years old. By this age, you have an established driving record and insurance history and are considered to be a lower risk.

But your car insurance might increase by the time you hit your 70s and onwards. Find out how you can save some money with affordable seniors’ insurance.

Your gender and marital status

Insurance companies actually would consider both of your age & gender, when they calculate your car insurance premium. That’s because males are statistically more likely to file an insurance claim, which means men pose a higher risk of getting into a car accident.

Your marital status may also factor into the equation. Married couples tend to get lower rates than single individuals. So, if you’re a young, single male, you may pay a higher rate than your married counterparts.

According to this Globe and Mail article, there are a few reasons why married couples get lower rates, including their age and driving experience. Also, many married couples have kids and tend to drive more responsibly.

With that said, each insurer determines its own rates, and some won’t factor in your marital status.

Where you live

Where you live can have a big impact on your car insurance rate. That’s because urban areas tend to have higher claims costs. Being in an area with more people means more risks, accidents, and thefts. When those things occur, claim costs rise, and so do premiums.

Along with urban areas having higher claims costs, your postal code also affects your premium. Each postal code is associated with a neighbourhood, and some neighbourhoods are at a higher risk for theft or accidents.

Driving record

The cost of your insurance largely depends on your personal driving record. Previous accidents, how long you’ve been licensed, whether or not you’ve taken a driver training course, speeding tickets, and serious convictions such as impaired and distracted driving are all part of your record.

Your insurance premium will likely be higher with more traffic convictions and collisions. The length of time traffic convictions stays on your driving record varies. For example:

  • A speeding ticket stays on your record for three years.
  • Demerit points stay on your licence for two years. The number of points added to your record depends on the offence. If you accumulate more than 15 demerit points in Ontario, your licence will be suspended for 30 days.

Car accidents are a bit trickier to determine, and the primary factor is finding out who is at fault. Your insurer will use provincial Fault Determination Rules to determine who caused the accident. If you’re found at-fault – partially or fully – your premium may increase, and the collision will stay on your driving record for six years.

Insurance company

Shopping around for the best deal can be time-consuming and overwhelming, as each insurance company offers different rates based on your profile. To simplify and expedite your search for affordable car insurance, get a free quote from a broad range of insurers.

After you’ve found a few insurance rates you’re interested in, you can start comparing the policies line by line to see what is offered and what isn’t. Keep in mind that 'cheap' doesn’t always mean 'best.'

To truly get the cheapest and best car insurance, you should shop around whether your policy is up for renewal or not because each company offers different rates.

Insurance coverage

Depending on your car type, you may want to get different coverage. For example, you should consider a depreciation waiver on a brand-new car. If your car is severely damaged in an accident, this coverage allows drivers to receive a claim on the value of their car. Of course, there are caveats: the car must be brand new (not used), the waiver can last between one and three years, and your claim will be settled in one of three ways (whichever is lower):

  • The amount you paid for the vehicle.
  • The manufacturer’s list price for the vehicle, with similar options and equipment on the original date of purchase.
  • The cost to replace the vehicle with a new one with similar options and equipment

Insurance policy deductible

The deductible is the amount of money you would pay before insurance starts to cover you in the event of an accident, theft or other damage to your vehicle. Depending on the policy, the deductible amount can vary but typically starts at a few hundred dollars and goes up.

It may sound counterintuitive to want to increase your deductible, but a higher deductible means a lower premium.

Ask about discounts

The best way to save even more is to ask your provider about discounts they offer and what you may qualify for.

Here are a few easy ways to potentially save:

  • Sign up for a usage-based insurance (UBI) program. A UBI program monitors your driving behaviour and habits. A mobile app and a telematics device installed in your vehicle track how fast you drive, how hard you brake, and the distance you drive. Consistently demonstrating safe driving behaviours can help you save money by earning a discount on your premium.
  • Get winter tires. Many insurers offer a winter tire discount of up to 5% on your premium when you install winter tires.
  • Invest in driver education. Young or new drivers can also give you a discount if they’re on your insurance policy if they enrol in an accredited driver's training school and complete the training. The money you'll save on insurance typically offsets the cost of the training within the first year.

Review your policy annually

Reviewing your policy annually ensures you’re still getting the best rate, especially if your insurance needs change throughout the year.

After careful review, you can decide to renew the same policy, make changes to your policy, or switch insurers to get the coverage you need at an affordable price.

Whatever you decide, it's good to review and shop around annually.

Tips to get a cheaper car insurance quote in Canada

Get quotes from as many insurance companies as you can.  

Car insurance is mandatory in Canada, but that doesn't mean you must stick with your current car insurance provider or the one favoured by your family and friends.

Car insurance providers will happily offer you a quote at no charge. This way, you can get a close estimate of what you can expect to pay annually.

Don't take our word for it: even the Financial Consumer Agency of Canada recommends applying for quotes as the first step when buying car insurance.

A licensed insurance broker can retrieve multiple quotes for you.

You can also use a rates comparison site like Our network includes over 50 Canadian insurance providers. We'll obtain your car insurance quotes from each of these 50 Canadian insurers. Not only you will see your cheapest quote, you will also see your car insurance quotes offered by insurance companies.

Or you can try both routes and see which one you prefer. We’re confident you’ll love's service. It's always free, and applying for a quote takes three minutes or less.

Make sure your application is accurate. 

When you apply for quotes on or through a broker, you want to ensure that the information you provided during the screening process is accurate.

That way, you know the rates offered to match what you'll be charged when signing the contract.

You can expect to be asked about the following:

  • Vehicle information (year purchased, make, model)
  • Driver information (licensing dates, claims and convictions history)
  • Discount information (interest in bundling home insurance)

Many car insurance providers and brokers offer the ability to apply online for quotes. One thing to watch out for is sites that ask too few questions.

At, we’ve engineered our form to ask the most important questions while not turning the process of getting quotes into a drawn-out task. Our service ensures you get accurate quotes in three minutes or less.

Rethink how much insurance you really need

We're not suggesting you skimp on insurance coverage to save some money in the immediate future. However, you could wind up adding optional insurance coverage to your policy that might not be worth the investment. For example, collision and comprehensive coverage on an older car: you could use the money you would pay for these extras and invest it into buying a new car out of pocket.

Third-party liability insurance is one area where many Canadians are chronically underinsured. The mandatory minimum limit in most provinces is around $200,000, whereas insurance experts recommend increasing it to at least $1 million. After all, the cost of legal expenses, decisions, and medical care have increased since the minimum limit was set.

Apply for as many discounts as possible

Insurance companies offer lots of discounts. Here are some of the most common ones:

  • Winter tires discount: In Ontario, you can save about 5% annually on your insurance if you keep winter tires between Nov. 1 to Apr. 1. The winter tire discount is applied at renewal time.
  • Dashboard camera discounts: If the time comes to make a claim, video footage from your dashcam will provide objective evidence, making it easier for insurance adjusters to determine fault.
  • Anti-theft device: Insurance companies offer discounts for drivers who make investments to make their cars harder to steal. Insurers favour the following devices:
    • Starter disablers
    • GPS trackers
    • Car alarms
    • Steering wheel locks

You might consider using a combination of devices. Faraday bags are a must-have accessory for all cars with keyless entry: these pouches will block any signal that tries to clone your key fob.

Try usage-based insurance

This product qualifies as a discount, but it gets its own section given what a game-changer it has proven itself to be for urban drivers.

Think of it like one of those retro pay-as-you-go cell phone plans.

With usage-based insurance (UBI), you pay for a baseline number of annual kilometres, usually about 10,000 km. If you exceed that, your insurance company will charge you for every extra 1,000 km or so.

In order for the insurer to keep tabs on your mileage, you must install a monitoring device in your car.

Try telematics

Telematics is similar to UBI. It adds a layer of data collection, though. With a telematics device installed, your insurance provider will monitor your driving patterns, like your average driving and braking speeds, not just your kilometres.

You must install a monitoring device or an app on your phone to participate. It can amount to discounts in the region of 20% at renewal time plus an initial discount for signing up.

One thing to note is that insurance companies are allowed to use your data against you in Ontario. If the device detects unsafe driving, your insurer could increase your premium.

Keep insurance costs in mind when you shop for a new car

The make and model of the car you choose will determine how much you pay for insurance.

Used cars that have already depreciated in value usually command lower auto insurance rates.

Despite being older, some used cars still attract thieves. If you want to keep insurance costs down, consider checking to see if the car you're eyeing has made it on the Insurance Bureau of Canada's most stolen list. Cars that make the list usually have higher than average insurance premiums.

Offer to pay for the whole year upfront

This might not be feasible if you're a young and inexperienced driver (this group tends to pay some of the highest rates). But, if you're a driver in your forties or older with a clean driving and insurance record, paying for the whole year upfront will often save you some cash.

When you pay month-to-month, administrative fees are tacked onto your bill. You're saving the car insurance provider money when you pay for the year at renewal time.

The cheapest car insurance quotes people are gettingon

Save an average of $716* on car insurance.

Car insurance quotes by age group and gender

The price of car insurance varies by age and gender. The under 30-set pays the most for car insurance, and young male drivers are penalized more harshly than female drivers of the same age. Premiums start dropping for men and women at age 25; by age 30, gender is even less of a concern with insurers.

To illustrate, we found the average premium for men and women in Alberta and Ontario who used during the first six months of 2023. Insurance rates declined each decade for drivers in both provinces, with Ontario drivers receiving higher quotes than ones in Alberta.

AgeMale - OntarioMale - AlbertaFemale - OntarioFemale - Alberta
Below 20 $4,472.40 $3,140.27$3,248.37$2,946.26
20 to 29 $6,344.54$4,598.64$4,492.13$4,724.41
30 to 39$3,907.81$3,394.46$3,555.48$3,613.40
40 to 49$2,906.67$2,574.25$2,859.61$2,561.10
50 to 59$2,169.97$2,047.48$2,123.76$1,986.65
60 and above$1,449.65$1,474.27$1,323.22$1,426.31

Car insurance coverage by province

All car insurance might seem the same, but it operates differently in each province and territory. Depending on where you live, insurance may be purchased by private, public, or a combination of both providers.

Public insurance is government-run at a provincial level. Financial institutions, insurance companies, and insurance brokers sell private insurance. A provincially governing body regulates both car insurance systems.

All provinces and territories require drivers to have auto insurance, which includes mandatory third-party liability coverage across the country. Most provinces require a $200,000 minimum in coverage, though Quebec drivers need just $50,000, and Nova Scotia drivers need $500,000.

Three other types of coverage are mandatory in some provinces, but not all. This includes accident benefits, direct compensation-property damage (DC-PD), and uninsured automobile coverage. This table shows where each type of insurance is mandatory across the country.


 AlbertaBritish ColumbiaManitobaNew BrunswickNewfoundland and LabradorNorthwest TerritoriesNova ScotiaNunavutOntarioPrince Edward IslandQuebecSaskatchewanYukon
Third-party liabilityMinimum $200,000Minimum $200,000Minimum $500,000Minimum $200,000Minimum $200,000Minimum $200,000Minimum $500,000Minimum $200,000Minimum $200,000Minimum $200,000Minimum $50,000Minimum $200,000Minimum $200,000
Direct compensation-property damage (DCPD)MandatoryMandatoryN/AMandatoryMandatoryN/AMandatoryN/AMandatoryMandatoryMandatoryN/AN/A
Accident benefitsMandatoryMandatoryMandatoryMandatoryN/AMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatory
Uninsured automobile insuranceMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatoryMandatory
Collision coverageOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptional
Comprehensive coverageOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptional
Specified perils coverageOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptional
All perils coverageOptionalOptionalMandatoryOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptionalOptional
Suspension of coverage (SEF/QEF/OPCF16)Optional       Optional Optional  
Loss of use coverage (SEF/QEF/OPCF20)Optional Mandatory Optional Optional Optional OptionalOptional 
Coverage for damage to non-owned automobiles (SEF/QEF/OPCF27)Optional OptionalOptionalOptional Optional OptionalOptionalOptional  
Accident forgiveness (SEF/QEF/OPCF39)Optional       OptionalOptionalOptional  
Remove depreciation deduction (SEF/QEF/OPCF43)Optional OptionalOptionalOptional Optional Optional Optional  
Waive the drivers's right to claim glass breakage (SEF13C)Optional          Optional 
Pay a deductible if your car catches fire or is stolen (SEF40)Optional            
Emergency roadside assistanceOptionalOptionalOptionalOptionalOptional   Optional Optional  

Average car insurance premium by province (2014-2021)

The following data is taken from the Insurance Bureau of Canada (IBC), the General Insurance Statistical Agency (GISA), and the Groupement des assureurs automobiles (GAA) provincial comparison report.

British Columbia   $1,618$1,832 $1,582$1382
Manitoba   $1,080$1,080 $1,200$1144
New Brunswick$762$762$787$819$867$942$1,014$1,096
Newfoundland and Labrador$1,063$1,088$1,114$1,132$1,168$1,229$1,251$1,294
Northwest Territories$971$969$966$975$983$1,004$1,033$1,087
Nova Scotia$771$782$811$842$891$990$1,066$1,140
Prince Edward Island$759$754$773$796$816$864$885$915
Saskatchewan   $936$1,235 $1,274$1312

Historical data not available for British Columbia, Manitoba and Saskatchewan for certain years.

British Columbia (ICBC only)- ICBC Annual Report.

Manitoba - MPI Annual Report, private insurers

IBC with data from GISA Exhibits AUTO1005-ON, AB, ATL, 2021.

Saskatchewan- IBC calculation with data from SGI, SAF, and private insurers. SK premiums are a proxy per policy for all vehicles

Frequently asked questions about car insurance

How can I get the cheapest car insurance in Canada?

There isn't one company you can go to for cheap car insurance.

Finding cheap car insurance is a set of actions.

Chief among them is comparing car insurance quotes. It’s recommended by the Financial Consumer Agency of Canada, a federal watchdog whose mandate includes protecting consumers' rights.

It’s also a tactic that many consumers forget to try.

You can compare quotes for free in a few minutes on, or you can approach a property and casualty insurance broker.

Shopping the market before making a commitment slashes hundreds of dollars from your annual expenses.

Another effective way to immediately reduce your car insurance premium is to reduce your coverage.

We recommend doing this with the help of an insurance professional, however. For example, many drivers are underinsured for third-party liability and accident benefits.

However, your vehicle might not need insurance for physical damage – it could be cheaper to purchase or repair the car out of pocket.

Reducing the number of kilometres driven annually will also help lower your insurance costs. If you know you drive more or less 10,000 km per year, usage-based insurance (UBI) might be an option.

This new product allows you to buy insurance for a set number of kilometres and lets you pay for every additional 1,000 km you log.

Another tactic that doesn't yield immediate savings but is a surefire way to reduce your expenses in the long run? Make sure you don't get any driving convictions or file an insurance claim on your car insurance policy.

All insurance companies will reward policyholders with a track record of good driving with their best rates. This usually takes a few years to build.

A medium-term solution could be to sign up for a telematics program.

Telematics allows an insurance company to monitor your driving behaviour through a device plugged into your car's onboard diagnostics port or an app. 

Is it cheaper to pay car insurance monthly or annually?

You'll spend less if you pay your annual premium upfront at renewal time. It usually amounts to a 7% discount.

Insurance companies tack on a small administrative fee on your monthly bill. By paying all at once, the company saves on expenses to process the bill, send it out, complete the transaction, and more.

The other benefit of paying upfront is eliminating the possibility of being late or missing a monthly payment.

Missing a payment may result in a late fee and cause your insurance company to cancel your coverage. Having that in your insurance history is a red flag to other insurers and will result in a higher premium.

Are older cars cheaper to insure?

It depends. Older vehicles, even models just a few years old, can be cheaper to insure because they cost less to repair and replace. New vehicles tend to be built with modern features that are expensive to replace. However, the tradeoff is that newer vehicles are often safer, reducing your rate. If you’re looking to save money, it helps to purchase an older or used vehicle as the insurance is often cheaper on these vehicles. Before purchasing a vehicle, try running a few different quotes with a few different vehicle options to determine which one would cost the least to insure.

What is third-party liability insurance?

Third-party liability insurance is a mandatory component of car insurance policies across Canada. It protects drivers in the event a claim is filed against them for injuries or death caused to another person involved in a collision, or damages to a vehicle obtained in an accident, up to the amount of the coverage, including settlement claims.

The minimum mandatory amount varies by province, but most insurers recommend that drivers increase their liability insurance if they can. Most insurers provide coverage up to at least $2 million.

What is no-fault insurance?

Despite its name, no-fault insurance does not mean no one is at fault for a car accident. Instead, it means that each driver goes through their own insurance provider regardless of who is at fault. Ontario is an example of a province that operates under a no-fault insurance system.

It is a common misconception that if the police do not give you a ticket, then you are not at fault for the accident. Your insurer may find otherwise, and you can be found at fault, partially at fault, or not at fault for a collision.

Police will investigate collisions and charge drivers under their provincial highway acts as well as the Criminal Code of Canada. If found guilty, this can significantly impact your insurance rates and, depending on the severity of the crime, could result in the cancellation of your policy altogether.

Alexandra Bosanac, Content Manager

Alexandra Bosanac, content manager at, focuses on auto insurance. She has covered the topic since 2017. Alexandra holds a bachelor’s degree in journalism from Toronto Metropolitan University. Prior to joining in 2021, she contributed to publications such as Canadian Business, the Toronto Star, the National Post, and the CBC.


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