A guide to car insurance for newcomers to Canada
As a newcomer to Canada, you'll need auto insurance to drive a car. In just a few minutes, compare personalized quotes to find your best rate today.
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How car insurance works for newcomers to Canada
Matt Hands, VP, Insurance
Auto insurance is a requirement by law for everyone who wishes to drive a car in Canada. The coverage is there to protect you from all kinds of financial implications, such as vehicle repairs after a collision or liability claims after an accident. Driving an uninsured vehicle is a serious offence – you could get a heavy fine or even a license suspension. You'll also need to provide proof of an auto insurance policy before you're able to register your vehicle.
Even though auto insurance is legally mandated Canada-wide, the coverage requirements for a standard car insurance policy vary provincially (and it heavily depends on whether the province runs on a public or private insurance system).
British Columbia, Saskatchewan, and Manitoba are public insurance markets where you buy auto insurance from the government (with the option of purchasing supplemental coverage from private insurers). Alberta, Ontario, and Atlantic Canada have private auto insurance companies vying for your business which is why comparing car insurance quotes online is an effective strategy for uncovering lower rates. Quebec, on the other hand, has a hybrid system that offers the cheapest car insurance rates. There, you buy injury coverage from the government and property damage from a private insurer.
Even though each province sets a minimum standard for coverage, most people purchase a more comprehensive insurance policy. In fact, in every province, you can customize your policy's coverages and amounts to further suit your personal needs.
Regardless of the rules in your province, not having the right auto insurance policy in place will leave you financially vulnerable if you're ever involved in an incident. So read on to understand everything there is to know about car insurance in Canada as a newcomer.
Types of car insurance for Canadian newcomers
The same types of auto insurance exist for newcomers and long-term residents of the country. While some coverages are mandatory, others can be added on optionally as an enhanced protection. Here, we cover the main types of car insurance across Canada:
Third-party liability
Accident benefits
Uninsured motorist
Direct compensation for property damage
Collision
Comprehensive
Optional endorsements
What car insurance do I need as a newcomer?
The minimum mandatory auto insurance you need to carry is dependent on where you live. The table below outlines the differences from province to province:
| Canadian province | Private insurance | Public insurance | Minimum liability | Accident benefits | Uninsured motorist | DCPD | Collision & comprehensive |
|---|---|---|---|---|---|---|---|
| AB | Yes | No | $200,000 | Required | Optional | Yes | Optional |
| BC | Yes | Yes | $200,000 | Required | Included | No | Optional |
| MB | Yes | Yes | $200,000 | Required | Included | No | Required |
| NB | Yes | No | $200,000 | Required | Required | Yes | Optional |
| NF | Yes | No | $200,000 | Optional | Required | Yes | Optional |
| NS | Yes | No | $500,000 | Required | Required | Yes | Optional |
| ON | Yes | No | $200,000 | Required | Required | Optional | Optional |
| PEI | Yes | No | $200,000 | Required | Required | Yes | Optional |
| QC | Yes | Yes | $50,000 | Required | Included | Yes | Optional |
| SK | Yes | Yes | $200,000 | Required | Included | No | Required |
Again, keep in mind that most drivers in Canada go above the minimum – and it's highly recommended to do so. Drivers typically carry at least $1 million in liability coverage, along with collision and comprehensive insurance for vehicle protection.
If you aren't sure about your specific coverage needs, be sure to consult a licensed insurance broker in your province. Having the right expert to guide you throughout the purchasing process is especially important as a newcomer to Canada.
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How much does car insurance cost for newcomers?
Insurers look at your driving experience as a key factor when calculating your auto insurance quote – and unfortunately, many companies won't consider driving records from abroad, leading to much higher rates for newcomers to Canada.
For reference, below are some sample car insurance rates for newcomers to Canada who don't have a relevant driving history. All policies consist of $1 million in third-party liability coverage, as well as collision and comprehensive insurance with a $1,000 deductible. To find out how much you'll be paying (for your desired policy), be sure to compare personalized quotes for your own profile.
- $275/month
35-year-old female in Calgary, Alberta
driving a 2023 Mazda CX-30
- $392/month
50-year-old male in Markham, Ontario
driving a 2020 Toyota Camry
- $433/month
45-year-old female in Toronto, Ontario
driving a 2025 Honda Accord
There may be some exceptions to this, however. For example, if you’re a newcomer from the United States, your previous driving history may be recognized by many insurers here, since infrastructure (and rules of the road) are so similar in both countries. You’ll need to request a letter of experience from your American provider, which serves as proof of record.
Additionally, consider reaching out to different insurance companies to ask if your foreign driving history can be taken into account. Some insurers will credit newcomers for a maximum of three years worth of history. If you find one, the insurer can assess your risk more accurately, which can potentially result in lower premiums.
Factors that impact your newcomer car insurance rate
Along with your driving experience, below are a few other key factors insurers look at when determining your car insurance rate. Keep in mind that on top of this, the policy coverages you choose will also impact your rate greatly – more coverage equals higher costs.
Age
Younger drivers generally face higher insurance rates, but luckily, premiums tend to decrease with age.
Gender
Men tend to pay higher rates due to a higher involvement in accidents, compared to women.
Location
Living in busy, populated areas increases the risk of collisions and theft, leading to higher insurance costs.
Vehicle type
Cars that are costly to repair or frequently stolen will result in higher insurance premiums.
Driving history
A clean record equals low rates. A lack of relevant experience as a newcomer will also impact your rate poorly.
Driving behaviour
More time on the road increases the likelihood of claims, so driving less can lower your insurance.
License class
Graduating through the licensing system can lead to cheaper rates due to more experience.
Vehicle use
Vehicles used for business often lead to high rates, while pleasure-use cars come with lower premiums.
Tips to lower your car insurance rate as a newcomer
Because newcomers often face heightened auto insurance rates in Canada, here are a few tips you can try out to help lower your out-of-pocket costs:
Get your full license as soon as possible
Whether it's your G in Ontario or your Class 5 in Alberta, drivers who've graduated through the entire licensing system in the province will see the cheapest rates. Insurers see lower risk if you're fully licensed.
Take an accredited driving course
If you're new to driving completely, taking an accredited course to learn all the rules of the road – along with operating a vehicle – can help lower your premium in the earlier years.
Choose a cheaper vehicle to insure
The vehicle you drive makes a big difference in the price you'll pay for coverage. Highly stolen vehicles (along with cars that are generally expensive to repair or replace) result in high premiums. And if you're not sure about the price that'll come with your prospective vehicle? You can crunch numbers ahead of time with our rating tool.
Bundle your insurance products
If you're new to Canada, chances are you're also shopping for other types of insurance – home, tenant, or condo to name a few. By bundling multiple products under one insurer, you'll be eligible for extensive discounts on all of them.
Compare car insurance quotes with us
In most provinces, you have the benefit of a free marker system, where you can choose which insurer to go with based on the rate they offer. Be sure to compare personalized car insurance quotes with us to find the right one for yourself.
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