Find the Cheapest Collision Car Insurance in Canada

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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 2, 2024

What is collision car insurance? 

When your automobile collides with another or with objects like guardrails or trees, collision coverage comes in handy. This type of insurance pays for repair or replacement costs for your vehicle to a limit of its actual cash value.

Deductibles can vary widely for collision car insurance, from $500 to $5,000 (or more). Standard car insurance requirements in Canada, which cover medical expenses or loss of income following an accident, generally don’t include collision insurance. Because collision damage might be costly out of pocket, it’s worth considering if adding collision auto insurance is right for you. 

Is collision auto insurance mandatory in Canada? 

Collision coverage isn’t mandatory for most Canadian drivers, with notable exceptions. For instance, if you finance or lease your vehicle, collision coverage may be required — make sure to double-check your contract. Some basic collision coverage is included with standard insurance packages in two provinces. In Manitoba, it’s through the all-perils coverage that’s part of standard auto insurance. Saskatchewan residents get this coverage with basic auto damage insurance.

Drivers who feel they can’t afford to pay out of pocket to repair or replace their car and those who own newer vehicles are often advised to get collision insurance. It may not be necessary if you own an older model car with little resale value or one you can afford to repair or replace.

The following guide can help you determine if collision car insurance meets your needs or not. In addition to collision insurance, you may need other optional endorsements to get the coverage you want. Find your cheapest collision car insurance quotes by comparing results from 30+ providers in a single search. 

Desired coverageDoes third-party liability coverage include this?
Repair or replacement costs for a driver's vehicle following a collision with another vehicleYes.
Repair or replacement costs for a driver's vehicle following a collision with an object or propertyYes.
Natural disasters (like floods, fire, hail or lightning)No, these are covered by a separate, optional add-on known as comprehensive coverage. It will cover any of these disasters which are specifically named in the policy. (This coverage is also available on its own as part of Specified Perils coverage.)
Falling objects, theft or vandalismNo, this is covered by comprehensive coverage or Specified Perils.
Transportation replacement in case your vehicle suffers loss or damage (e.g., a rental car or taxicabs)No, requires optional coverage like Ontario’s OPCF 20: Coverage for Transportation Replacement or Alberta’s SEF 20: Loss of Use Endorsement.
Removing the right to deduct depreciation from a vehicle’s value when settling damage or loss claimsNo, requires optional coverage like Ontario’s OPCF 43: Waiver of Depreciation or Alberta’s SEF 43R: Limited Waiver of Depreciation Endorsement. (Note: This coverage is only for brand new vehicles where the driver is the first purchaser.
Damage to an automobile you operate but don't own, like one which is borrowed or rentedNo, requires optional coverage like Ontario’s OPCF 27: Liability for Damage to Non-Owned Automobile(s) or Alberta’s SEF 27: Legal Liability for Damage to Non-Owned Automobile Endorsement.
Medical expenses or loss of income after an accidentNo, this is covered in accident benefits insurance, which is mandatory coverage in all provinces except Newfoundland and Labrador.
Coverage for you or an eligible family member in case of injury or death in a not at fault automobile accident with a driver who carries no insurance or is underinsuredNo, requires optional coverage like Ontario’s OPCF 44R: Family Protection Coverage or Alberta’s SEF 44: Family Protection Endorsement.

Do you need collision car insurance coverage?

Collision car insurance coverage benefits some drivers but is unnecessary for others. Consider the following before you decide whether you need collision insurance for your vehicle.

Replacement cost: The higher your vehicle’s replacement cost, the more valuable this coverage can be — especially for current model year cars. In addition to collision insurance, choosing a waiver of depreciation endorsement on a new vehicle ensures you’ll be compensated for the original value in the event of a collision. If your car is older and only worth a few thousand dollars, comprehensive coverage may not be worth it. (In some cases, it may not be permitted.) Consider dropping collision coverage as your vehicle’s value drops.

Leased and financed vehicle needs: Many lenders require financed or leased vehicles to be covered by collision auto insurance. If you’re unsure if this applies to you, double-check your paperwork or call your lender. This coverage is optional in most cases if you fully own your car.

Ability to pay out of pocket: Some drivers who can comfortably afford to repair or replace their car out of pocket might not feel a need to purchase a collision policy. This can be for reasons like owning a low-value car or having adequate financial means. If neither applies to you, collision insurance can be a prudent option to protect you.

Driver age and experience: New and senior drivers — both of whom are statistically more likely to get in accidents — may benefit from this coverage.

How does collision insurance work?

It depends on whether you're at fault for the collision or not. Drivers in collisions they didn't cause are covered by Section A liability insurance or direct compensation for property damage (DCPD). You're covered even if you didn't buy additional collision insurance. No deductible is paid in this case, and your premiums won't increase.

If you're at fault for the collision, what happens next differs based on whether you purchased collision insurance. If you have it (or purchased All Perils coverage), you will be covered for the incident. You will pay a deductible based on the amount selected for your policy--ranging from a few hundred to a few thousand dollars. But if you haven't purchased collision insurance, you're responsible for the cost of repairing or replacing your vehicle.

To prevent your premium from going up after an at-fault accident, you may consider an accident forgiveness endorsement like Ontario's OPCF 39: Accident Waiver/Forgiveness or Alberta's SEF 39: Accident Rating Waiver. This coverage is not retroactive.

How much does collision car insurance cost?

Collision car insurance costs can vary based on several factors. Your costs for mandatory insurance typically make up the bulk of your overall premium and impact what you pay for optional coverage.  Some of the key elements that determine how much or little you pay are:

  • The age, make, and model of your vehicle
  • Whether your driving history includes at-fault accidents, tickets or violations
  • Your age and driving experience (newly licensed drivers, as well as those under 25 or over 70, are considered to be a higher collision risk.)

Your collision car insurance quotes are also impacted by the deductible you choose. The lower the deductible, the more you can expect to pay for collision coverage (and vice versa.)

In addition to these differences, premiums can vary between insurance companies. Shopping around is essential as your rates can change from one company to another, even though your information remains the same. Compare results from 30+ providers in a single search to find your cheapest collision auto insurance quotes.

Frequently asked questions about collision car insurance in Canada

How can I find the cheapest collision car insurance quote?

The best way to get the best price on collision auto insurance in Canada is to compare rates online. Several factors impact your insurance premium, but different insurers weigh them differently. Depending on the company, you may be able to earn discounts to achieve significant savings. Find your cheapest collision car insurance quotes by searching among 30+ providers and then comparing results with 

What is the difference between comprehensive and collision car insurance? 

One way to view it is that collision coverage helps with damages encountered while driving. In contrast, comprehensive coverage assists with those you get while parked. Comprehensive insurance covers a wide range of events: inclement weather like hail, falling or flying objects, vandalism and theft. Collision coverage covers the costs of repairing or replacing your automobile following a collision with another car, an object, or property. These two policies are often recommended together because they complement each other.  

How do I choose a deductible for my collision coverage?

With many insurers, you can set a low deductible like $500 or a high one like $5000. To get started, consider several factors unique to you. These include the value of your vehicle, your financial position, how frequently you drive and if you live in a high-population area where collisions are more prone to happen. You may wish to discuss what deductible is best suited for you with an agent after reviewing quotes online.

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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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