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Whether you’re getting car insurance for the first time or you’re looking to renew, a lot of factors have an impact on your car insurance rates, from the type of car you have to your driving record.
Some of the factors that insurers use to determine your insurance premium includes:
Your vehicle type
Insurance companies have different rates for different car makes and models. A few things the insurance company looks at when determining your rate are 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, the vehicles attracting thieves most often are Ford pickup trucks.
Insurance companies also look at how much it would cost to repair your car if you get into an accident. Generally speaking, rates tend to be higher for newer cars and sports cars, 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.
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. As you build a safe driving record and insurance history, both may result in a cheaper car insurance premium over time.
As you get older, car insurance typically gets cheaper again when you hit 50 years old. By this age, you have an established driving record, insurance history, and are considered to be a lower risk.
But when you hit your mid-50s and older, you might see your car insurance increase. Find out how you can save some money with affordable seniors insurance.
Your gender and marital status
Insurance companies also consider your gender. 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 individuals who are single. 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 they tend to drive more responsibly.
With that said, each insurer determines their 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, more accidents and more 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.
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.
The more traffic convictions and collisions you have, the higher your insurance premium will likely be.
The length of time traffic convictions stay on your driving record varies. For example:
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.
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 the 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.
Make sure you know what you’re paying for.
Depending on what type of car you have, you may want to get different coverage. For example, on a brand new car you should consider a depreciation waiver. If your car is severely damaged in an accident, this coverage allows drivers to receive a claim in the value of their car. Of course there are caveats to this and 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):
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 from there.
It may sound counterintuitive to want to increase your deductible, but the higher deductible means the lower the 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:
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.
You know that feeling when you find out you’re getting a really good deal? Maybe it’s bold for us to say, but, we think you’ll be feeling it in about five to 10 minutes. How can we be so sure?
Get a quote that is 26% less than the average market rate.*
*Based on the difference between the average lowest auto insurance premium and overall average auto insurance premium from our site in 2019.
Yes, car insurance is mandatory in Canada. No matter which province or territory you reside in, drivers are legally required to carry car insurance on any vehicle they take out on the road. The minimum requirements vary by province.
You must also show proof of auto insurance if you are pulled over. If you’re caught driving without insurance, the penalties are steep. In Ontario, for example, fines start at $5,000 and go up to $25,000 on a first conviction. For a second conviction, fines start at $10,000 and go up to $50,000. On all convictions, a 25% victim surcharge fee is also applied to the fine. On top of this, your license can be suspended for one year and your vehicle impounded for up to three months. Plus, of course, you would not have any protection for liability or coverage in the event of an accident.
For more information, read about car insurance coverage by province.
No one company offers the cheapest rate overall, which is why it’s important to shop around and compare car insurance quotes. In Ontario, for example, car insurance operates under a public model, which means insurance companies compete for your business. Different companies charge different rates for the same coverage and to the same driver for a number of reasons. If you’re looking for the cheapest car insurance, comparing quotes is the easiest way to save.
It’s true, some makes and models are cheaper to insure than others. We looked at all car insurance quotes completed on InsuranceHotline.com and found some of the cheapest vehicles to insure include:
You’ll notice a lot of truck and vans are mentioned in this list. This may be because these are often family vehicles. Drivers of family vehicles are considered to be more mature and safer drivers on the road, choosing vehicles with higher safety ratings. The make and model of the vehicle you drive definitely plays a role in your car insurance premiums, but the most important factor is your personal driving record and insurance history.
It depends. Older vehicles, even models that are 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 newer vehicles are often safer, which can reduce rates. 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 as well. 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.
It is cheaper to pay for insurance annually. Paying in one lump sum versus month-to-month shaves off the monthly administrative costs that are baked into your monthly premium.
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/or having to file a claim. As you build your driving record and insurance history, your experience is reflected in your car insurance premiums.
After that, car insurance typically gets cheaper again when you’re in your 50s. By this age, you have an established driving record and insurance history and are considered lower-risk. Other life milestones such as getting married and purchasing a home can also impact your rates, as they place you in a lower-risk bracket.
The cost of your insurance largely depends on your personal insurance history. If you maintain a clean driving record, your car insurance rates could get cheaper at any time. However, this also depends on a number of other variables, including the type of vehicle you drive, how often you drive, and where you live.
In Canada, the majority of auto insurance operates under a no-fault insurance model, which means that regardless of who is at fault, you deal directly with your own insurance provider in the event of a claim. The exception to this rule is Saskatchewan, which defaults to a no-fault system but allows drivers the option to switch to a tort system. In a tort system, drivers can sue an at-fault driver for losses not fully covered under the accidents benefits coverage.
Depending on where you live, car insurance is offered under a private or public insurance model, or in the case of Quebec, a combination of both.
Auto insurance in your province or territory may be offered on a public system (available through your provincial government), private system (available through private insurers that compete for your business), or a combination of both.
The Quebec auto insurance model is a bit different than the rest. Some components of a Quebec driver’s coverage are rolled into their driver’s licence and vehicle registration fees.
Other components, however, must be purchased from a private insurer. These components include: the civil liability coverage (which is mandatory) and optional coverages (like collision and comprehensive).
Car insurance operates differently in each province, but insurers consider the same things when determining an individual’s car insurance premiums. This includes:
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 amounts vary by province, but most insurers recommend that drivers increase their liability insurance if they can. Most insurers provide coverage up to $2 million.
Despite its name, no-fault insurance does not mean no one is at fault. 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’s interesting to note that the police investigations and insurance companies have different methods for determining fault in an accident and are unrelated to each other. Insurance companies may find you partially at fault in an accident, for example, even in the event the police determine another driver is to blame. This is because multiple things are taken into consideration when determining fault at an insurance level. It is a common misconception that if you are not given a ticket by the police, 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 have a significant impact on your insurance rates and depending on the severity of the crime, could result in the cancellation of your policy altogether.
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. Private insurance is sold by financial institutions, insurance companies, and insurance brokers, and offers a more competitive landscape. Both types of car insurance are regulated by a provincially governing body.
All provinces and territories require drivers to have auto insurance, which includes mandatory third-party liability coverage across the country. Most provinces require $200,000 minimum in coverage, though Quebec drivers need just $50,000 and Nova Scotia drivers need $500,000.
There are three other types of coverage that 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.
|Province or Territory||Type of Car Insurance||Mandatory Third-Party Liability||Accident Benefits||Direct Compensation-Property Damage||Uninsured Automobile Insurance|
|Newfoundland & Labrador||Private||$200,000||Yes||No||Yes|
|Prince Edward Island||Private||$200,000||Yes||Yes||Yes|
|Quebec||Private and Public||$50,000||Yes||Yes||Yes|
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.
|Newfoundland and Labrador||$1,063||$1,088||$1,114||$1,132||$1,168||$1,229|
|Prince Edward Island||$759||$754||$773||$796||$816||$864|
Historical data not available for British Columbia, Manitoba and Saskatchewan for certain years.
No matter where you live in Canada, car insurance is mandatory. However, each province is different when it comes to which types of insurance are required and the minimum coverage required. There are also optional types of coverage that vary by province. Here are the most common types of auto insurance in Canada, including which ones are mandatory and where.
In addition to the minimum mandatory auto insurance coverage required by provincial governments, there are also various optional coverages that are available across Canada. These are the most common four optional auto insurance coverages that are available in all provinces and territories in Canada.
*Based on the difference between the average lowest auto insurance premium and overall average auto insurance premium from our site in 2019.