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Car Insurance across Canada – what’s the difference?

At Canada Drives, we understand the importance of being able to afford a vehicle and that not all people have good credit when doing so. This is why we help link drivers who have all types of credit levels to lenders who can help them

While securing a car loan is typically an important part of buying a car, it is also necessary to ensure that your vehicle is roadworthy. While this will certainly include proper vehicle maintenance and servicing, this also involves being sure you have purchased the necessary car insurance. While you may think that all car insurance across Canada will be similar, in terms of cost – you may be surprised to hear that these insurance rates actually vary quite significantly across each province.

There are a range of factors that impact these differences- beginning with the variations between private and publicly run insurance programs in various provinces. While Manitoba and British Columbia, for example offer provincially run coverage, the remaining provinces are comprised of various private and independently operated insurance groups – offering a range of interest rates.

Let’s take a look at the variation between the average car insurance rates across Canada, as well as the pros and cons and differences affecting these individual provincial insurance rates. Please note: the quoted car insurance rates represent 2015 insurance premiums for an established driver with a clean driving record and only cover the minimum liability insurance required by each province.

Ontario – $ 1,281

Ontario drivers are currently expected to pay the highest amount of insurance in the country with an average premium of $1,281 per year. Within this province, there are a high volume of injuries, auto claims, and vehicle-related lawsuits that drive up this rate. On top of this there are the organized crime rings associated with fraud and private auto insurance in the province. Compared to other provinces, car insurance expenses account for 4.5% of personal disposable income – and the annual cost is almost twice as high as the lowest provincial rate.

British Columbia – $1,112

British Columbia has the second highest annual car insurance rates in the nation, currently sitting at $1,112 per year. BC is also one of the the most expensive of the rates in all of the provincially-funded car insurance categories in Canada. Insurance is provided by the Insurance Corporation of British Columbia (ICBC), offering a lower amount of competition. Reasons for high insurance rates in this province are linked to higher frequencies of vehicle accidents – despite being provincially ran – these policies still remain very high.

Saskatchewan – $ 1,049

Ranking in at number 3 is car insurance rates in Saskatchewan. These annual premiums also fall slightly above the $1,000 mark at $1,049. These rates have tended to move up or down, each year and since this policy is set by the Saskatchewan Government Insurance (SGI), residents of this province must purchase their insurance through this agency and can’t shop around for alternative rates.

Manitoba – $ 1,027

Over the last 5 years, Manitoba drivers have seen insurance rates fluctuating quite a bit – and at some point, rates were even as high as $ 1,468. As well as in British Columbia and Saskatchewan, Manitoba operates under a province-run insurance program. Under this program, insurance rates have remained near the $1,027 annual price range for some time.

Alberta – $ 1,004

The province of Alberta ranks in the middle of the pack with an annual car insurance premium of $1,004. The expense of insurance in this region also only accounts for a 2.7% of disposable income. Ultimately, in relationship to this percentage, Alberta’s auto insurance affordability rate actually makes it the second best in all of Canada.

Newfoundland & Labrador – $749

While some other provinces have seen a drop in price, Newfoundland and Labrador insurance rates appear to be on the rise. Compared to rates seen in 2007, in the last few years the average yearly auto insurance rate has increased from $700 up to $749. In the last 5 years, there has been an increase in the occurrence of auto claims and vehicle-related lawsuits in the province, which appear to account for this increase.

Nova Scotia – $735

In Nova Scotia, vehicle insurance rates also appear to be maintaining their affordability, and in fact a decrease has rather consistently been seen in these rates each year. Again, as compared to other provinces, the lower level of accident claims each year appear to be a major factor in the lower rate in this province.

New Brunswick – $728

Annual premiums for New Brunswick average $728, and auto insurance reflects 2.8% of after-tax disposable income rates – one of the least expensive percentages across the nation, following Alberta.

Prince Edward Island (PEI) – $695

For PEI, the average cost per year for vehicle insurance is approximately $695. This province offers rates through a private insurance program and has been recognized as one of the most efficient of the privately ran insurance programs in Canada. Rates have also been experiencing a decrease, with factors such as competition levels and a decline in existing auto insurance claims occurring.

Quebec – $642

Overall, Quebec offers the least costly car insurance coverage of all provinces. An annual premium cost of about $642 can provide drivers with a basic package. Basic insurance includes no fault for accidents – and this can limit liability and reduces the overall costs of insurance for drivers. Quebec also offers a combination or private and publicly run insurance groups.

What to Consider:

Also differing across each province – there are varying degrees of what is considered a mandatory insurance coverage package. As a result, this also affects the cost of how much you will except to pay in each part of Canada. With that being said, making sure you are aware of the specifics associated with your province is important – and may or may not be considered a pro or con, depending on the situation – and the cost, of course.

What can YOU do to influence your Insurance Rate?

In most provinces, there are certain criteria that will be taken into account when you are obtaining car insurance. The following factors will likely be assessed when your insurance policy is being considered.

  • Your driving experience
  • Your driving record
  • Where you live
  • The type of vehicle you drive
  • Your age and gender

Since premiums vary across the nation, and certain provinces require that vehicle owners obtain certain insurance packages, comprised of mandatory coverage – you can see just how different the car insurance climates remain throughout Canada. Ultimately, you will need to be aware of the specifications for your region, as well as knowing what you can do to help reduce your own costs.

Now that you know a little more of what to expect in your own province, hopefully you can move forward with your car ownership plans. Just like obtaining a loan, it’s important to gather this knowledge before you buy so you can budget accordingly. In addition to understanding the differences in car insurance across Canada, you can also look to acquire the vehicle financing you need and Canada Drives is here to help connect you with a lender to do that.


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