Car insurance rules and regulations differ quite a bit in Canada, depending on which jurisdiction you are in. For example, in Saskatchewan you’ll pay any compulsory basic insurance through the government, but anything above and beyond that will be covered by private insurers. In Quebec, meanwhile, only coverage for personal injury is covered by the government – any direct compensation property damage is dealt with by the commercial market. And in British Columbia and Manitoba, vehicle insurance is entirely publicly run.
All other provinces and territories leave vehicle insurance entirely to the commercial market. As such, rates in these areas can vary the most dramatically and depend on factors such as your postal code, your age, your gender and your driving experience. Your driving record and the make and model of your vehicle will matter, too.
Beyond these key points, the nuances of which factors affect auto insurance rates also the most vary across Canada, so some may make more of a difference in your province than others. In this guide we've listed the things worth looking into or asking your insurer about to try to get yourself the lowest possible auto insurance quote.
How to Find Affordable Car Insurance in Canada
- Choose Your Vehicle Carefully
- Don’t be Afraid to Shop Around
- Opt for a Higher Deductible
- Pay Your Premium all at Once
- Keep all Your Insurance with one Provider
- Examine Exactly What Kind of Insurance You Need
- Install Winter Tires
- Look into Usage-Based Insurance
- Don’t Allow for a Gap in Your Insurance History
- Ask About Organizational Discounts
- Just be a Safe Driver
- What are the Cheapest Cars to Insure in Canada?
- FAQs
Choose Your Vehicle Carefully
Certain types of vehicles have lower safety ratings or are stolen more frequently, and these will tend to have higher rates. The types of vehicles affected by these differences may surprise you – this isn’t exclusive to flashy sports cars! Three-row family-oriented SUVs can be frequent targets for theft because they’re easier for illicit sellers to flip on the used vehicle market. If you’re considering purchasing a new car or a new-to-you vehicle, always call your insurer to ask about the rate before you commit to a purchase. This step is essential to prevent you from shouldering nasty surprises.
Don’t be Afraid to Shop Around
Play the insurance market off against itself. Even if nothing about your situation changes from one year to the next, it’s worth taking a few minutes to visit some online rate estimators and see what the various insurance providers are willing to offer. Some drivers find that their insurers post annual increases that add up over time, and simply switching to a different car insurance company that’s willing to offer a better deal can erase some of those gains.
Opt for a Higher Deductible
This is a simple gamble: if you’re confident you can afford to pay more in the event of an incident, you can pay less overall for your policy by selecting a higher deductible. Auto insurance coverage with a deductible of $1,000 will cost less than one with a deductible of $500 because you’re covering more of the insurer’s costs at the time of the incident – and so the insurance covers less. However, you’ll need to ensure that you have the money in reserve to float this extra expense should it become necessary to do so.
Pay Your Premium all at Once
Many insurers will offer a discount to drivers who pay their premium in full annually as opposed to in monthly installments. If you can afford a lump-sum payment, ask your insurance company to quote for both scenarios to see whether you’re missing out on an opportunity for savings.
Keep all Your Insurance with one Provider
If you also have home insurance or coverage on your cottage, boat, RV, or motorcycle, for example, many insurers will give you lower car insurance premiums on each of these products if you opt to keep them together with a single provider. The difference from bundling your auto insurance policy with other coverage can range from 5 to 25 percent lower rates depending on the policy.
Examine Exactly What Kind of Insurance You Need
Every jurisdiction will have a minimum amount of mandatory coverage that’s required by law, but in some cases you may be paying for supplemental coverage you don’t really need. For example, if you’re driving a beater that would be easy for you to replace if it’s totalled in a car accident, collision coverage may not be the best use of your money. If you could easily afford to replace a vehicle that's written off due to some other circumstance such as being crushed by a fallen tree, comprehensive coverage may not be a good use of your money.
Have a discussion with your insurance provider or insurance broker to discuss your needs and situation to see whether removing some types of optional coverage and thus reducing the overall amount of coverage could be right for you – it may be that going for third-party liability only rather than comprehensive insurance would be a good way to lower your car insurance cost.
Other optional elements of your coverage that you may be able to dispense with could include out-of-pocket expenses in the case of a claim, the cost of ridesharing services such as Uber, or personal protection in the case of an at-fault accident.
Install Winter Tires
Many insurance companies will reward drivers who choose to install winter tires in the colder months, and in some provinces, they’re required to do so by law. This is because winter tires make a real difference in driving safety: the rubber on all-season or summer tires hardens at temperatures below 7 degrees Celsius, which reduces its ability to grip to the road’s surface. Winter tire rubber is more pliable at lower temperatures, and the tread is designed to more effectively retain traction in snow, slush, and ice. As a result, installing winter tires makes you a safer road user when the temperatures drop, and your insurer is likely to reward you for it. Just make sure you actually do install those tires and keep the receipts for the work in case you’re asked for them.
Look into Usage-Based Insurance
If you drive a lot less than the average motorist and don’t mind using telematics to prove it, switching to a usage-based insurance plan could lower your insurance costs by as much as 25 percent. These types of plans tend to offer the most benefit to drivers with good records and driving experience who live in higher-risk areas such as cities and who drive occasionally rather than commuting daily. A device plugged into your car or an app installed on your mobile phone will track your driving habits and send data to your insurance company, which allows them to verify your usage and give you lower premiums accordingly.
Don’t Allow for a Gap in Your Insurance History
Insurers don’t look kindly on drivers who suddenly go uninsured for a period of time. Even if you need to sell your car and go without a vehicle for a while, it’s best to retain a car insurance policy of some kind, whether that be one that insures you for third-party vehicle such as car-sharing services, or having yourself added as a secondary driver to a trusted family member’s policy. Different insurers will be able to offer different solutions in this situation, so don’t be afraid to ask around.
Ask About Organizational Discounts
Your employer, alumni association, or some other group membership or professional association may offer insurance savings. Check with these organizations to see whether they have made arrangements for discounted rates with specific insurance providers.
Just be a Safe Driver
Drivers who can demonstrate to insurers that they’re lower risk by maintaining a clean driving record and not piling up on speeding tickets and accidents will always be quoted the cheapest auto insurance rates. These types of incidents stay on your driving history for years and mark you out as a high-risk customer, especially as a new driver or young driver. When you’re running late and feel tempted to speed or engage in risky driving behaviours, think of the bigger picture: the potential increase in your insurance rates in the event you’re caught or cause a crash is simply not worth it.
What are the Cheapest Cars to Insure in Canada?
Working out which cars are cheapest to insure in Canada is a bit of a challenge, because there are simply so many variables – what type of vehicle is cheapest for one driver might well not be the case for another. The factors affecting this include your expected annual mileage, where you live, where you store the vehicle and how old the car itself is, among many other factors.
In Canada, another variable to consider is the province you live in, as the way in which auto insurance is set up varies so significantly between provinces.
Overall, though, it is fair to say that cars and trucks with the best safety ratings combined with relatively low equipment levels are the least expensive to insure, and that smaller pickups, small SUVs and compact cars are the cheapest types of vehicle to insure. Examples of these include the GMC Canyon pickup, the Nissan Rogue SUV and the Mitsubishi Mirage compact car. Subaru as an overall brand also has a reputation for being relatively cheap to insure.
FAQs:
What’s the average insurance policy rate in my province?
According to the most recent data published about the whole Canadian market by the Insurance Corporation of British Columbia in 2022, residents of Alberta are paying the highest average auto insurance premium in the country with an average rate of $3,151 per year. This means even some affordable cars are attracting painful premiums.
Quebec, meanwhile, comes in at the cheapest, although its unusual part-public, part-private set-up makes it hard to compare with other provinces.
In between those two poles, Nova Scotia is next, at $2,491, then Ontario at $2,299, New Brunswick at $2,187 and Newfoundland at $2,162. British Columbia, which a few years previously had been the most expensive province, actually now comes out in the mid-pack, at $1,775 having seemingly avoided the premium hikes suffered by many other provinces.
Prince Edward Island ($1,703), Manitoba ($1,373) and Saskatchewan ($1,249) are the cheapest provinces for car insurance quotes. Average figures for the three territories of Nunavut, Northwest Territories, and Yukon are not published.
What’s been driving the increased cost of auto insurance premiums?
Many factors can affect the cost of car insurance claims, but in recent years, higher than normal rates of inflation and high interest rates have pushed up insurance premiums. Another significant factor is repair costs, which have increased due to the increasing complexity of modern cars (particularly advanced safety features) — costs which ultimately get passed to customers.
Other issues driving costs in the insurance system include insurance fraud, hit-and-run issues with uninsured drivers and vandalism of certain cars.
In Canada, however, a particular issue is vehicle theft – more than 80,000 cars were stolen across the country in 2023 alone.