Get the Best
Third-Party Liability Coverage
for Your Vehicle

Jump straight to:

• What is third-party liability insurance?
• Why do I need third-party liability car insurance?
• What does third-party liability insurance cover?
• Third-party liability car insurance requirements across Canada
• Physical damage covered by third-party liability
• How much third-party liability insurance coverage do I need?
• Most recent third-party liability car insurance quotes
• How to get a third-party liability car insurance quote on RATESDOTCA
• How to get the cheapest third-party liability insurance
• How do third-party liability car insurance claims work?
• Frequently asked questions about third-party liability car insurance

Physical damage covered by third-party liability 

Third-party liability insurance policy offers protection against the expenses associated with damage or injury suffered by someone other than yourself. Some examples of accidents a third-party liability car insurance policy will cover are: 

• Knocking over a neighbour’s fence while reversing your vehicle. 
• Hitting a cyclist or pedestrian with your vehicle and injuring them. 
• Losing control of your car due to weather conditions and damaging someone’s property. 
• Damaging someone’s car in a collision you caused. 
• Injuring the driver of another car in a collision you caused. 

How to get the cheapest third-party liability insurance

There are a lot of tactics you can use to lower your car insurance premiums, but some make more of a difference than others. Here are the most impactful moves you can make to lower your rate.

Buy a cheaper car

The vehicle you choose has an outsized impact on how much you pay for insurance. It's almost as consequential as driver behaviour. 

First, choose a car that's less likely to be stolen. The Insurance Bureau of Canada publishes a list annually of the most frequently stolen cars. While thieves often target luxury car brands like Lexus, middle-of-the-road brands like Toyota and Ford make up a significant portion of thefts.

Also, remember that a fully optioned car will cost more to repair or replace and, therefore, to insure. On the other hand, a vehicle with a basic trim will have lower potential claims costs and will be less expensive to insure.

Lastly, avoid financing a car. Loan providers and lessors make you purchase comprehensive insurance coverage for the vehicle. It ensures the lender doesn't lose their investment if you default on your loan.

Keep a clean driving and insurance record

This tip doesn't result in immediate savings, but it's up there with buying a cheaper car to keep your premiums low.

Don't rack up traffic tickets, avoid making insurance claims, and always pay your premium on time. Suppose you can maintain a spotless continuous insurance history over the years. In that case, insurance companies will eventually offer you their preferred (lowest) rates.

To protect your reputation as a great driver, consider purchasing an endorsement that covers you from a rate increase on your first at-fault accident. A reputation for good driving behaviour takes time and effort to establish. Still, it will significantly impact your insurance rates in the long run.

Pass on optional coverages

Your car loses value over time. At some point, your car will depreciate to the point where it would be cheaper to replace rather than continue paying for collision and comprehensive insurance. Vehicles five years old or more typically don't need collision or comprehensive insurance.

Increase your deductible

The deductible is how much you agree to pay out of pocket for damages before your insurance company pays out your benefit. If you offer to shoulder more of the expense, your insurance company will lower your premium.

Try usage-based insurance

If you drive 12,000 kilometres a year or less, consider getting a usage-based insurance policy. When you apply for a car insurance policy, insurance companies ask you to predict the number of kilometres you expect to log over the coming year. This leads some people to inflate the number to stay on the safe side. A usage-based policy offers more flexibility than a traditional policy. You pay for every 1,000 kilometres you drive, usually up to 12,000 kilometres. Essentially, you err on the side of being a low-mileage driver, reap a cheaper premium, and pay the difference on the off chance you go over your allotment of kilometres.

Sign up for telematics

Telematics refers to insurance technology that monitors your driving habits. Insurance companies give you a compact sensor you install in your car and pair it with an app.

Together, the devices can monitor your speed, how hard you brake, and the distance travelled. If the device reflects cautious driving habits, you'll receive a discount at renewal — up to 20% in some cases. Some insurance companies offer an initial discount for enrolling in the program.

Telematics programs are available in Ontario, Nova Scotia, New Brunswick, Quebec, and Alberta. One word of caution: insurance companies can use the information to raise your rates in Ontario.

Compare rates

Be sure to compare rates. Car insurance companies in provinces with private insurance markets don't charge the same for coverage. The price of your car insurance depends on the insurer you choose. In 2021, RATESDOTCA drivers saved an average of $772 and $736 annually in Ontario and Alberta, respectively. Both the Auto Insurance Rate Board of Alberta and the Financial Services Regulatory Authority of Ontario recommend shopping around to find a lower rate.

However, be wary of switching insurance companies midway through your term, as this will likely result in a premium increase. Waiting until your renewal period is recommended to avoid cancellation penalties.

Other tactics worth trying:

• Pay for your annual coverage upfront.
• Reduce your dependency on your car: the more kilometres you log, the more you'll pay for insurance, so try to incorporate other modes of transportation into your lifestyle, like walking, biking and public transit.
• Take a ministry-approved driver training program. Check with your insurance provider about courses that could earn you a discount on your coverage.
• Apply for as many discounts as you can. Examples of typical insurance discounts include:
• Winter tire discount
• Alumni and employer discounts
• Savings for students who maintain a certain GPA
• Bundling discount (insure multiple cars with the same provider or combine home and auto)