How Much Does Car Insurance Cost in Canada?

Sometimes it feels like every time the wind blows, the cost of car insurance goes up, and that isn’t that far from the truth because, unfortunately, higher premiums are on the rise.

Car insurance may be a necessary evil, as every car owner in Canada must cover their liability during an accident and other potential mishaps. There’s a lot to parse when it comes to it, so let’s get started.

Of all the factors that affect the cost of car insurance, where you live is the biggest determinant. There’s no one average cost across Canada, but there is an average cost for every province.

According to the Insurance Bureau of Canada (IBC), British Columbia leads the way with the most expensive annual average at $1,832, followed by Canada’s most populous province, Ontario, at $1,528. In third comes Alberta at $1,316, followed by Saskatchewan at $1,235, Newfoundland and Labrador at $1,168, Manitoba at $1,140, Nova Scotia at $891, New Brunswick at $867, PEI at $816, and finally, the cheapest, Quebec, at $717.

Brunswick at $867, PEI at $816, and finally, the cheapest, Quebec, at $717.

There’s a wide variance there, and you can expect a similarly wide margin when it comes to monthly premiums. Canadians can expect to pay between $125 to $160 on average.

The way car insurance works for you depends largely on where you live. However, generally speaking, you, the driver, pay a monthly cost called a premium.

In exchange, you receive coverage should you be found liable during an accident for any expenses related to the other driver’s injuries or death and for any expenses damage to their car, its replacement and/or damage to other property involved in the accident. For example, if you hit someone’s mailbox or drove into their house.

Since you receive insurance coverage, the money for these expenses comes from the insurance policy amount and not your personal income.

After your insurance pays for expenses related to an accident, you can expect your insurance premiums to go up because you are considered an increased risk to the insurance company providing the policy. There’s no doubt you will pay more the next time you’re on the road.

Conversely, if you’ve never been in an accident and have a squeaky-clean driving record, you can expect to potentially pay less in premiums than other drivers who may have a spottier track record.

Many factors can influence whether your car insurance premium goes up or down, and they all have to do with risk.

The higher the risk, the more likely you are to get in an accident or have your car damaged or stolen, and the more likely the insurance company will have to pay out a claim on your behalf.

Conversely, if you do things to decrease the likelihood of getting in an accident, the insurance company is likely to offer you a discount on your rate.

The biggest factor that can influence your rates, beyond smaller factors, such as living in a rural or urban area, an area with high or low crime, or whether your car comes with an anti-theft device, is your driving history.

If you’ve been in accidents before, have a lot of recent speeding tickets, or arrests for DUI, these factors will drive up your premiums.

If you haven’t been driving long or are a brand-new driver, this can also drive up your auto insurance costs.

These aren’t the only factors, however. Some are difficult to discern, but many auto insurance providers offer online surveys where they ask about your driving habits, which eventually narrow into a car insurance calculator that can help you determine what your rate is likely to be.

You can also call any auto insurance company, and they’d be happy to ask you similar questions and provide you with an auto insurance quote.

As you’ve seen above, car insurance coverage varies significantly between provinces.

For example, Quebec includes civil liability as part of mandatory coverage. Newfoundland & Labrador is the only province where the funeral, disability, and death benefits are optional coverage.

Generally, however, most provinces cover the following as part of mandatory auto insurance:

Property damage

Expenses related to damage to property outside of and including the vehicle.

Uninsured driver protection

Coverage in case the driver you’re in an accident with is uninsured. This protection is the part of the policy that takes care of their expenses.

Third-party liability

The part of the policy that protects you if you are sued and found liable for causing injury or property damage during an accident.

Personal injury

Expenses related to a personal injury you caused during an accident, including hospital stays, rehabilitation, medication, physio, and more.

Accident benefits

These include compensation to family members if someone dies, funeral expenses, compensation for loss of income if a person cannot work due to their injuries, medical and rehab expenses not covered by another medical plan.

Insurance plans may also include an alternate caregiver if someone is no longer able to care for their family, replacement costs for things lost or damaged during the accident, compensation if a person can’t lead a normal life and can’t qualify for the caregiver benefit, or income replacement.