Consequences of driving without car insurance in Canada
“Why am I giving all this money away to some insurance company when I can just drive carefully and save that money for when I need it?”
Auto insurance is mandatory in Canada. If you have a driver’s licence you probably already know this. You probably also know that car insurance can be pretty pricey, especially for young or new drivers and drivers with traffic violations. It might be tempting to just not get insurance and save that money. Maybe you’re buying a car from a private seller and you don’t feel like waiting until the new car is covered before taking it home.
Whether you do the former or the latter, the crime is the same, and driving without insurance will land you in hot water. Here are the consequences of driving without car insurance in Canada:
That ticket’s no joke
It’s nice to think that you would never get caught. Just drive carefully, right? However, if you get into an accident and the other drivers involved follow correct procedure, you could find yourself trying to explain to an officer why you can’t provide proof of insurance. No big deal if you have $5,000 to $25,000 lying around. Unfortunately, that ticket for no insurance is just the first thing that’s going to punish your wallet for driving without car insurance.
You could go broke from repair costs
Cars aren’t cheap. Repairing a car can cost almost as much as buying something else, depending on how badly damaged it is. Even just having to get the damage evaluated can end up costing a pretty penny. When you are covered by insurance, they will not only assess the damage, but help you pay for a temporary replacement vehicle should you need one. Without that help, at the very least you’ll be on the hook for at least $1,000 – and that’s being optimistic.
You could go broke if you can’t work
Getting into a collision without insurance is expensive enough without injuries, but if you or the other person gets hurt, you could be looking at even greater costs. Insurance policies will include accident benefits that can help keep you from digging into your savings if you end up missing wages.
You could go broke from being sued
Liability is one of the most important aspects of an insurance policy. If you injure someone else or if they expect you to pay damages to them, the policy will make sure you’re not paying out of pocket. In a worst-case scenario, you could be facing a lawsuit from someone. If that happens you’ll need a good lawyer. Those don’t come cheap. And after all the legal fees, you’ll be on the hook for paying the settlement. Considering that people likely aren’t suing for chump change, you’d better be ready to shell out thousands more. If you lose the suit and can’t afford to pay, your financial life will be in shambles. The government could seize your assets or garnish your wages, which means you’ll basically be making less money for a significant period of time. You might have to move or make other lifestyle changes to deal with the debt.
You could lose your licence and your car
On top of all this, driving without car insurance in Canada could end with your car being impounded or your licence being suspended for up to a year.
So is driving without insurance worth it? The most expensive insurance rates in the country are less than $2,000 a year for most people. So even the minimum ticket for driving without valid insurance is going to cost you more than an insurance policy, and that’s before we get into all the other potential costs when you don’t have coverage.
So no. It’s not worth it. If you get a car, get auto insurance.