How much auto insurance do you need in Canada?

You can’t drive a car in Canada without auto insurance.  While insurance providers and minimum coverage differs from coast to coast, the law requires minimal protection for personal injury and property damage. 

In Alberta, Ontario, New Brunswick, Northwest Territories, Nunavut, Newfoundland, Prince Edward Island and the Yukon all auto insurance can be purchased through private insurance companies.

The same is not true for Manitoba, Saskatchewan, and British Columbia, where mandatory insurance is purchased from provincially run insurers. However, additional coverage can be acquired from private companies.

Finally, in Quebec property damage insurance can be purchased through private insurance companies but personal injury coverage must be acquired from the provincial insurer.

How does car insurance work in each province?

Each province in Canada regulates auto insurance in slightly different ways. Here’s a look at each provincial system.

Alberta

Like Ontario and other private insurance jurisdictions, Alberta requires certain minimum requirements that include third-party liability, accident benefits and DCPD.

Those are the minimums but, of course, you are free to add more comprehensive coverage or collision coverage as needed.

After Alberta added the DCPD model to its regulations, the province became a no-fault insurance system.

Also, the Automobile Insurance Rate Board regulates insurance rates in the province and has established a maximum amount that can be charged for basic coverage.  

British Columbia

British Columbians purchase their insurance from the provincially regulated Insurance Corporation of British Columbia (ICBC). The ICBC’s Autoplan coverage includes:

• Third-party liability (of $200,000)
• Enhanced accident benefits
• Underinsured automobile protection (up to $1 million per insured person)
• Inverse liability protection (where local laws can affect your claim if you are out of province)
• Basic vehicle damage coverage

ICBC allows drivers to purchase further protection for coverages such as collision, comprehensive, and other options.

Drivers who are injured are no longer able to sue the other driver, making it a no-fault system. This applies even in serious cases. Accident benefit claims can be made through ICBC. However, the one exception of that rule appears to be if the at-fault driver is convicted of certain criminal offenses.

Manitoba

Manitoba’s insurance is provided through Manitoba Public Insurance (MPI), which takes care of not just insurance but also licensing, registration, claims and even road safety programs. Their insurance coverage is known as Autopac.

Like other public insurance companies in Canada, MPI provides third-party liability, personal injury protection and an all-perils coverage. Drivers in Manitoba also have the option to buy more coverage.

In Manitoba, deductibles are paid as part of an Autopac claim and insurance covers the rest. Also, in Manitoba you and another driver involved in a crash can sue each other for the deductible and liability.

New Brunswick, Prince Edward Island & Nova Scotia

These three eastern provinces are pretty similar when it comes to auto insurance.

They each have a private system in which mandatory coverage includes:

• Third party liability
• Accident benefits
• Uninsured automobile protection
• DCPD

In both Prince Edward Island and New Brunswick, the mandatory auto insurance minimum is $200,000, whereas in Nova Scotia it is $500,000. In all three provinces there is a two-year limitation period to sue a person who has caused injury.

Newfoundland and Labrador

Newfoundland and Labrador run on the private model. There are minimum requirements for third-party liability, DCPD and uninsured or unidentified automobile coverage.

Drivers can opt to buy further coverage for higher liability claims, accident benefits, physical damage for newer vehicles and endorsements. This is the only province with private insurance where medical, funeral, disability and death benefits coverages are optional for drivers – although they are highly recommended.

Ontario

Insurance is regulated by the Financial Services Regulatory Authority of Ontario (FSRA). At a minimum you are required to have $200,000 in third-party liability coverage, as well as accident benefits and uninsured automobile coverage.

Ontarians also have the choice to opt out of Direct Compensation Property Damage (DCPD), which was previously mandatory.

Ontario has a no-fault auto insurance system. Therefore, minor injuries and loss of property claims will not necessarily end up in court, as much of this would be compensated by the insurance company.

However, tort claims can play a role in car accidents when more serious (permanent) injuries, or loss of life, have occurred and they are the fault of the other driver.

Quebec

Quebec has a mix of both public and private auto insurance. The public Société de l’assurance automobile du Québec (SAAQ) covers personal injury or death for drivers.

Within that, you may be able to claim private health care expenses, adaption expenses (if your injury causes disability), education, clothing, medical supplies, medication, personal home assistance, labour costs, death and funeral expenses, and hit-and-run expenses.

Public insurance also includes a mandatory minimum requirement for civil liability insurance of $50,000. This type of insurance covers damage to other people’s property or damage to your car if you are not at fault.

However, the SAAQ does not cover certain types of damage (including damage involving an off-road vehicle, or a motorized mobility vehicle, or e-bike or e-scooter). That’s where private insurance comes in. A private insurance company will also provide collision insurance for at-fault accidents.

Saskatchewan

Saskatchewan is a public system and all cars in the province are covered by Saskatchewan Government Insurance (SGI). When you register a car in the province, you pay a flat fee and receive a basic package of insurance that includes:

• Coverage for damage to your vehicle, minus a deductible (usually $700).
• Personal injury insurance from collision.
• Liability insurance for damage your vehicle causes to another person’s vehicle or property, or injury to others.

Extra coverage can be bought with an auto extension policy through an insurance broker.

In Saskatchewan you can opt-out of the no-fault option and choose a tort policy. You may receive a reduction in the number of expenses you can cover, but switching to a tort policy will allow you to sue another person involved in an accident.

Yukon, Northwest Territories & Nunavut

All three territories require mandatory auto insurance for third party liabilities and accident benefits. The amount must be for $200,000. Additional coverage can be purchased through an insurance company. The territories are no-fault insurance areas but you can bring claims against someone who has caused pain and suffering or financial loss.

What happens if you get into an accident out of province?

If you take to the open roads in Canada and find yourself in an accident outside of your province, what can you expect?

Since car insurance is regulated provincially, your claim would fall under the rules of where the accident occurred.

If you’re unsure of whether your auto policy is adequate when travelling out of province, you can always buy extra coverage when you travel and avoid unpredictable expenses.

That’s why it’s important to know how much you are covered for before you hit the road.