Oh, Canada – a land where it can be challenging to get around without a car. With limited public transport options in many rural areas and even in some cities, Canada is a nation of vehicle owners.
But finding the right auto insurance policy can be challenging, especially for newcomers who may not be as familiar with Canada’s provincial licensing and insurance requirements. Once you also consider the differences in coverage and many factors that impact the price of your auto insurance, it can seem overwhelming. So, we’re going to walk you through the ins and outs of auto insurance in Canada to help you find a policy that goes the extra mile.
Auto Insurance By Scotia Insurance
Understanding Auto Insurance
In Canada, all drivers must be insured – it’s the law. But the minimum coverage requirements vary between provinces and territories. Generally speaking, you will need to have coverage that protects third parties. This is called liability insurance, which protects you financially if your vehicle causes injury or damage to another person or vehicle.
Penalties if you don’t have adequate auto insurance include:
- Fines.
- Vehicle impoundment.
- Suspended license.
- Premium increases. (Your premium is the amount you pay for auto insurance each year.)
In short, the risks of driving without adequate auto insurance are not worth it. You should always make sure you have at least basic coverage.
So, if you only need basic insurance to comply with the law in Canada, why would you buy a more expensive policy? Easy, it’s because increased coverage may offer greater protection from financial risk, and increased peace of mind.
These are some of the key features of auto insurance that you might consider in addition to the minimum basic policy:
Collision Damage
Basic auto insurance tends to only cover damage you cause to other people and their property, or damage to your vehicle if another (known) driver is at fault in certain jurisdictions. Your vehicle and property are not protected if you are at fault, so you will need to pay to repair the damage to your vehicle and property unless you purchase collision protection.
Purchasing this coverage can be a good idea if you cannot afford to repair or replace your vehicle in case of an accident. You will also usually have to buy a collision add-on if you are leasing or financing your vehicle under the terms of your lease or loan.
Uninsured Driver and Hit and Run Coverage
Damage done to your car by an uninsured driver or in a hit and run incident may not be covered by a basic policy. If you wish to protect your vehicle from unexpected damage caused by an uninsured or hit and run, you may need to buy additional coverage.
Comprehensive Auto Insurance
Comprehensive coverage offers protection from damage to your vehicle that is not the result of a collision, like hail, fire, theft, or vandalism.
All Perils Coverage
All perils auto insurance, which is offered by certain insurers, includes everything covered under comprehensive and collision add-ons, plus coverage in case someone who lives in your house steals your vehicle.
Rental Vehicle Coverage
You may be eligible for a rental coverage add-on for rental vehicles in Canada or the US, up to a certain limit. This may save you money by not having to purchase optional insurance coverage from the rental company when renting a car.
Roadside Assistance
Roadside Assistance is an add on service that offers help for common issues, some programs may include:
- Up to 50 km towing.
- Battery boosts, in case your battery dies.
- Tire change assistance.
- 10L of gas delivery.
- Lockout assistance.
Avoiding Auto Insurance Mistakes in Canada
Another important element of understanding your auto insurance policy is to know what is covered and what may not be covered. You should read your policy carefully, looking out for key terms such as the following:
You need to list people who regularly drive your vehicle.
The exact requirements vary from province to province but it’s common for your insurer to require you to list all regular drivers on the policy. In some cases, you may not be covered if an unlisted driver damages your car or has an accident – even if you have comprehensive coverage.
The way you use your vehicle matters.
If you plan to use your vehicle for business purposes, including driving for a ride share company or delivery service, you will need to let your insurer know and your premium may change.
Buying the ‘wrong’ car can be expensive.
The make, model, age, and value of your car impact your auto insurance premiums.
As a result, it’s a good idea to get quotes from an auto insurer while you shop for your car. This allows you to factor the cost of insurance into your overall cost of car ownership, and to compare the different costs between vehicles.
You can see more tips for buying your first car in a dedicated article by Scotia Insurance.
Using the wrong tires can cost you.
Canada has special tires that you can use for better control in winter – creatively called ‘winter tires’. These tires are designed to perform better in snowy and icy conditions, offering better traction than ‘summer tires’ or all-season tires. These tires increase the control and handling of your vehicle in winter weather conditions.
Some insurers, including Scotia Insurance, may offer a discount on your policy if you buy and use winter tires during the colder months. This discount doesn’t extend to Quebec and Alberta.
Auto Insurance By Scotia Insurance
Unlocking More Affordable Auto Insurance as a Newcomer
We won’t sugarcoat it. Your auto insurance is likely to be more expensive for your first few years in Canada than it will be later. But there are steps you can take to reduce the costs of auto insurance at any point in your driving journey:
- Consider auto claim forgiveness add-ons to your policy.
While this may increase the cost of your insurance in the short term, auto claim forgiveness means that your rates won’t jump up if you have an at-fault accident. This can be particularly helpful for newcomers who are less familiar with Canada’s roads and rules.
- Access discounts for safe driving.
Smarter Ride, available as an option with your Scotia Insurance policy, is an app-based program that tracks how you drive. If you have safe driving habits, you can save money on your insurance premium.
- Increase your deductible.
Your deductible is the amount of money you agree to pay first if you make a claim. Here’s how it works: if you choose a $1,000 deductible and you make covered repairs to your vehicle that cost $3,000, you will pay the first $1,000 and your insurer will pay $2,000 (totalling $3,000).
Generally, your insurance premium will be cheaper if you choose a higher deductible. However, it’s important to remember to choose a deductible you can afford in case something happens. It’s also worth noting that you will need to pay the deductible for every claim, not just the first claim.
- Take an accredited driving training course.
As a newcomer to Canada, your driving history may require some extra steps to be taken into account, like letters of experience from your prior country. Depending on your situation, you can also consider passing an accredited driving training course. These courses help show that you are a skilled and safe driver, which could reduce your premiums, especially if you’re a new driver.
- Bundle your insurance to save.
You may be able to bundle multiple insurance products together to save money on one or all of your policies. With Scotia Insurance, you can bundle your insurance and save when you buy multiple vehicle policies or auto and home insurance for the one household.
Auto Insurance by Scotia Insurance®
Scotia Insurance has teamed up with belairdirect and offers auto insurance coverage that’s right for your vehicle. You can choose basic to comprehensive coverage, or something in between, so you can be sure to get insurance that suits your budget.
Scotia Insurance policies also come with the following features:
- 24/7 claims support.
- Discounts for multiple vehicles.
- Loss of use coverage.
- Flexible premium payment options.
