How to Buy Car Insurance?

Buying a car? You'll need car insurance to lawfully drive on the road in Canada. Check out our guide on how to buy car insurance.

WRITTEN BY
Caitlin Wood
Updated November 20, 2020

In addition to the car payments, gasoline fill-ups, and repairs and maintenance fees associated with owning a car, there are also car insurance premiums to pay. There’s no getting around it: you need car insurance to lawfully operate a car on the road in Canada. 

We’ve broken down all the details surrounding this type of insurance to help you determine what type of car insurance policy is best for you.

How Much Coverage Do You Need? 

Car insurance offers the following types of coverage:

Liability InsuranceA basic car insurance policy offers liability insurance that will cover you for any damage you may cause to another vehicle or property. It also provides coverage against losses associated with injury and death involving your vehicle. So, if you hit another vehicle and cause damage to it, liability insurance will cover the costs of repairing the other person’s vehicle. However, it will not cover the cost to repair your vehicle.
Accident Benefits/
Bodily Harm Insurance
This coverage will compensate you for the cost of medical expenses and loss of income if you are involved in a car accident. In Quebec, you will be automatically enrolled for this type of insurance when you get your driver’s licence and keep it renewed. There is no need to purchase extra coverage.
Collision InsuranceThis type of coverage will cover the cost of repairing or replacing your car if you hit another vehicle or object. It can also provide protection if you are involved in a collision with an uninsured driver. You will need to pay a little more for this additional coverage.
Comprehensive InsuranceIf you are looking for more comprehensive coverage, then you may want to consider this policy, which is more expensive than the previous two policies mentioned. It provides coverage for theft, vandalism, natural disasters, inclement weather, fire, rental cars, accidental damage, key replacement, and emergency accommodation, as well as all the coverage provided in a basic policy. 

There are also additional types of coverage available if you are looking for protection that a standard policy does not provide, such as the following:

Car RentalIf your vehicle is currently being repaired, this insurance policy may cover you for the cost of renting a car temporarily.
Car Rental DamageIf the rental car you drive is ever damaged, this policy will cover the cost to repair the vehicle.
Road-Side AssistanceThis policy will cover the cost of emergency assistance on the road.
Collision ForgivenessThis policy will prevent your premiums from going up after your first accident that you are at fault for. 

How Much Does Car Insurance Cost?

The rate that you are charged will vary quite a bit based on a few factors, including where you live. Every province and territory in Canada has different average car insurance rates. 

Generally speaking, the higher rates tend to be charged in Ontario and British Columbia, where the average rate is $1,505 and $1,832, respectively. Quebec, on the other hand, offers some of the lower rates in Canada with an average premium of $717.

Got negative equity in your car? Consider gap insurance for your car.

Understand Your Premium

As mentioned, there are several factors that affect the cost of car insurance, in addition to the province or territory you reside in:

  • Your age. Younger drivers tend to have less experience driving and may also be more inclined to drive recklessly, which can cause premiums to be higher. 
  • Your gender. Men tend to pay slightly higher premiums than women. 
  • Your credit score. In some cases, a higher credit score may translate into lower premiums. 
  • Your vehicle. The type, condition, and age of your vehicle will impact your premiums. 
  • Your exact location. Some cities and neighbourhoods come with higher premiums than others. 
  • Driving history. If you have a clean driving record with no accidents, your premiums may be lower. 
  • Kilometres driven per year. The more mileage you put on your car, the higher your premiums may be. 
  • Past claims. If you have a history of filing many claims, your premiums will likely increase. 

Don’t plan on driving your car a lot? Check out temporary car insurance.

Where Can You Buy Car Insurance?

You can buy car insurance from the following entities: 

  • Banks and credit unions
  • Insurance companies
  • Independent insurance brokers

How To Buy Car Insurance

When you apply for a car insurance policy, you will be asked to provide certain pieces of information, including the following: 

Your personal information:

  • Full name
  • Date of birth
  • Address
  • Driver’s license number

Information about your car:

  • Make
  • Model
  • Year
  • VIN number
  • How it is used (for leisure versus work)

Your driving history:

  • When you got your license
  • Tickets 
  • At-fault accidents

You can buy an insurance policy in person, over the phone, or online once you’ve gathered all the required information that insurance providers typically need to provide you with an accurate quote. 

Once your policy is in effect, your insurance company will provide you with a certificate of car insurance that you should keep in your car. This certificate will have information about your policy number and the time period that you are covered. 

If you are ever pulled over, you will be required to supply the officer with this information, which is why it’s crucial to have this handy. Otherwise, you could be ticketed for failing to drive without your policy in possession. 

Features to Consider When Buying Car Insurance

When buying a car insurance policy, consider the following features:

Coverage. You want to know exactly what you are covered for, especially when it comes time to file a claim if required. Consider the type of coverage that your policy provides before signing on the dotted line. Compare the coverages offered by various plans, as coverages can differ a great deal depending on the plan type and the insurance provider.

Rate. The premium you are charged should also be factored into your decision. Comparing rate quotes among various insurance providers is an important step in choosing a car insurance policy to ensure your premiums fit within your budget. 

Exclusions. Read over your policy carefully to see what exactly is excluded in your car insurance policy so you can avoid unpleasant surprises when you file a claim.

How to Get The Best Deal on Car Insurance 

The less you can pay for your insurance policy, the more money you can keep in your pocket. After all, no one wants to pay any more for an insurance policy than they have to. Luckily, there are some ways that you can save on car insurance:

Increase Your Deductible

Before your policy kicks in, you’ll need to pay a deductible first when filing a claim. Generally speaking, the higher the deductible, the lower the premium, and vice versa. If you are a good driver, you may want to consider increasing your deductible so you can take advantage of lower premiums. 

Bundle Multiple Policies

 If you need life insurance and home insurance in addition to car insurance, look for an insurer that offers these types of policies so you can get everything you need in one spot. Most insurance providers offer discounts to clients who bundle their insurance products. 

Keep a Clean Driving Record

The fewer tickets and accidents you get into, the better. Insurance providers tend to reward clients with no history of accidents and tickets with lower premiums. 

Improve Your Credit Score

Your credit score may play a role in the type of premium your insurance company offers you. So, if your score is currently on the lower end of the spectrum, consider making an effort to improve it before taking out a policy.

Buy The Right Car

Certain types of vehicles are more expensive to insure. Insurance providers tend to offer lower premiums for newer, lower-ticket cars. Luxury vehicles and cars that are in poor condition are more expensive to insure. 

Ask For a Lower Mileage Policy

If you do not put too many kilometres on your car every year, inform your insurance provider and see if you would be eligible for a low mileage discount. 

Take a Driving Course

Drivers who successfully complete a defensive driver’s course may qualify for a discount on their premiums. 

Choose The Right Coverage

Perhaps you don’t need all the bells and whistles that can come with a car insurance policy. If that’s the case, ask for a more basic policy that provides you with just enough coverage but without the higher premium that more comprehensive policies command. 

Combine Policies

If you are married, consider combining policies with your spouse. While the entire total will be higher than it would be for just one person, it would collectively be lower than two individuals’ policies. 

Final Thoughts

There’s no getting around a car insurance policy. While certain types of policies — such as life insurance — may be optional, car insurance is required. There are steps you can take to find the best policy that provides you with the exact coverage you need. Moreover, there are things you can do to ensure you don’t pay more than is necessary for your policy.