How Does Auto Insurance Differ across Canada
Canada is one of the most diverse countries in the world in both population and geography. A diverse country requires governments able to address the specific needs of these different groups of people. This is true of auto insurance coverage, which might differ from province to province.
It’s important to understand that auto insurance coverage is mandatory across Canada. No matter which province you live in, it’s the law to at least purchase liability coverage, just in case you are in an accident and cause damage to another person or property. You will need to make sure you have insurance so that you can be financially responsible for any damage you cause while behind the wheel.
Public vs private: which provinces have the better deal?
The most important difference between provinces is that some provinces use a public insurance system while others are private. The main difference between the two is that a public system only has one option for insurance while private systems allow many different companies to compete for your business.
This competition results in several advantages over public systems:
- More choice and value for the consumer
- Rates reflect the true cost of the service rather than a government subsidized mandated cost.
- The private sector employs a large number of people which results in more tax revenue and a stronger economy.
When it comes to premiums neither system has an advantage over the other. For example, Ontario may be the most expensive province to insure a vehicle, but there are plenty of reasons for it that aren’t related to its insurance sector being private. British Columbia also has relatively high insurance rates and it uses a public system. Cost of insurance has more to do with the statistics surrounding the accidents in different provinces than anything else.
Here is a breakdown of which provinces use private auto insurance and which use public auto insurance:
| PRIVATE | PUBLIC |
| Ontario | British Columbia |
| Alberta | Saskatchewan |
| New Brunswick | Manitoba |
| Nova Scotia | Quebec (bodily injuries only) |
| Newfoundland and Labrador | |
| Prince Edward Island | |
| Northwest Territories | |
| Nunavut | |
| Yukon |
Provinces have different standards for minimum coverage
Auto insurance policies usually bundle two or three different types of coverage into one package. Each component usually has a separate maximum amount of coverage associated with it that determines how much money an insurer is on the hook for should you need that coverage. Since each province handles transportation law differently each province has a different idea of exactly what the mandatory amount of coverage should be to be legally insured. The Insurance Bureau of Canada is a good resource for learning about your province’s specific insurance laws.
If you are looking for the best auto insurance rates in your province, be sure to shop around, and use the online and offline tools available to you.