Private vs. Public Car Insurance in Canada

If you're buying a car, you'll need car insurance. In certain provinces, that means deciding between private or public car insurance. This information may come as a surprise for some people. If you already have a car, you may have shopped around to find the best premium rates, or you may have contacted your financial institution to purchase your insurance. It may have never crossed your mind to look into government funded programs. However, certain provinces in Canada do offer public car insurance.

Residents of Saskatchewan, British Columbia, Manitoba and Quebec have the option to purchase public insurance. Residents of Ontario and the Atlantic provinces must purchase car insurance through a private insurance company.

Why does Canada have both private and public car insurance?

The easiest answer to that question is because they can. Car insurance is mandatory, but the minimum required amounts vary by province. Not everyone can afford auto insurance, and therefore some provinces offer basic coverage to their residents.

If a provincial government has the financial ability to offer a public insurance plan they do so. Other provinces choose to spend their public funding in other ways, such as enhancing health care or education.

The Saskatchewan Auto Fund, the Insurance Corporation of British Columbia, Manitoba Public Insurance and the Societe de l'assurance automobile are the four government bodies offering public auto insurance.

What are the benefits of public car insurance?

As a driver, you don't have the choice whether to buy car insurance in Canada for your vehicle. However, you can choose whether to buy public or private insurance. The great thing about living in a province that offers public car insurance is that you are guaranteed to have some amount of insurance - usually at a low cost. The coverage is limited, though.

When a service or product is offered to the masses, it's most likely a one-size-fits-all solution. This means coverage, prices and services are all fixed and usually only the basic minimum amount is offered. The exception to the rule is Manitoba.

According to Manitoba Public Insurance they "offer a variety of automobile insurance options, including Basic Autopac, Optional Autopac and Special Risk Extension coverage. Basic Autopac is mandatory in Manitoba. When you purchase our Basic Autopac coverage, you're purchasing protection in the event of a personal injury, all perils collision or third party liability claim. You can choose to enhance this basic coverage with optional Autopac overages."

Why should I buy private car insurance?

The benefit of buying private auto insurance is the free market pricing. When companies compete for your business they are forced to provide a better service at a lower cost. When shopping around for car insurance don't be afraid to compare prices and tell one company the quote from another. A little bit of competition is healthy - especially if it saves you money.

With private car insurance, your premiums are based on your individual contributing factors such as your driving record, credit history, the type of car you have as well as your age and gender. If you're a good driver, you'll get lower rates, and that can be one reason to choose private over public car insurance in Canada.