Automotive: Everything You Need to Know About Car Insurance in Canada

Driving a car is essential for many Canadians. However, no matter if you need it to go to work, go on a holiday, or simply run personal errands, there is always the possibility of something going wrong while behind the wheel. This is because you share the road with other vehicles and pedestrians so it is important that you are being careful and prepared in case something unexpected happens.

One way of doing so is to obtain car insurance. The main purpose of car insurance is to provide you with financial protection against damages and accidents that may occur when you are on the road.

In order to make the most out of it, keep reading to learn how car insurance works in Canada.

Types of auto insurance and how to choose one

Generally speaking, the minimum level of insurance required in Canada varies depending on which province you live in. That’s why it is important that you familiarize yourself with your province’s territory and requirements so you can get the best deal.

For example, liability coverage is the most basic type of insurance which is also mandatory in the country and protects you against paying for damage you may cause to someone’s property. It also provides coverage in case someone else is injured or killed as a result of an at-fault accident committed by you.

Another common type of insurance is collision coverage. This type also protects you from third-party liabilities as well as in case you hit something other than a vehicle such as a guardrail or an embankment.

Comprehensive coverage is another type of insurance that provides optimal protection. It covers accident-related medical bills and disasters such as theft or water damage.

Because there are several types of car insurance plans available, you might want to consider looking for a brokerage such as BrokerLink to help you get the best possible coverage type for your vehicle. For instance, if you reside in Ontario, which is the country’s most populous province, you can rely on this company to calculate car insurance in Ontario, and get the perfect policy at a great price.

Factors that affect the selection of auto insurance


Although car insurance is mandatory in all Canadian provinces, you should know that where you live can affect your insurance rate. This means that the rate you will have to pay for the level of coverage can vary from province to province.

For example, there are certain fees you can expect to pay for your car insurance if you live in Toronto rather than Hamilton. These fees depend on the city’s crime rate and level of infrastructure.

Vehicle make and model

Another factor that can affect your car insurance is the make and model of your vehicle. Most insurance companies usually use CLEAR (Canadian Loss Experience Automobile Rating) to evaluate data for every year, make, and model of vehicles. They use this information to predict which vehicles are more likely to contribute a claim.

Usually, rates are higher for newer and sports cars. Don’t forget that your car’s safety features can help lower the premium.

Age and gender

Age, gender, marital status, and occupation are other common factors that may affect your insurance rates. For example, if you’re under 25 and don’t have much driving experience, you’re more likely to have a higher premium because the chances of you getting into an accident may be higher.

Additionally, your gender can also influence the cost of your car insurance coverage. Usually, in Canada, males pay higher premiums than females.

Driving record

Your driving history can also affect your insurance rates. Things like the number of years you’ve been driving, how safe you’ve been driving and the number of years you’ve had insurance are some factors that are taken into consideration when getting your car insurance.

If you have any convictions, or you’re considered a high-risk driver, that could also increase your car insurance premium. On the other hand, if you’re a safe driver who’s never received even a speeding ticket, then your car insurance might be more affordable.

Photo by Colin Lloyd from Unsplash

Final thoughts

Being familiar with the various factors involved in getting the right auto insurance premium in Canada is very important. Things like your location, driving record, and even your demerit points can have a great impact on your insurance rate.

That’s why it is very important that you do your research and shop around to find the best deals on insurance in the country. You can even consult with an expert to guide you through the process and help you get the right coverage plan for your vehicle.