Get Cheap Car Insurance Quotes in Canada

How car insurance quotes are calculated

Insurance companies consider many factors when calculating your insurance rate.

• Vehicle type: The type of vehicle you drive impacts the premiums you pay. Different vehicles are associated with different risks including their likelihood of being stolen, how much they cost to repair, their safety rating and features, and claims history. There is also some perceived behavioural risk associated with different vehicles. Insurers are more willing to offer low rates to drivers with “sensible” vehicles. As a result, when shopping for insurance, you might notice your dad’s 10-year old minivan suddenly seems more appealing.
• Commute distance: How much you drive will also affect your premiums, which is why you are always asked to provide your anticipated vehicle usage when obtaining a car insurance rate. The less you drive, the cheaper your car insurance premium is. The more you drive, the higher the chance that you could be involved in a motor vehicle accident, and the more you will have to pay for insurance.
• Driving history: Individuals with a clean driving can expect to pay lower premiums than those with tickets and/or accidents on their record. The number of years you have had a licence also matters.
• Demographics: Where you live makes a difference. Areas with higher occurrences of theft and collisions result in higher premiums. Your age can also come into play. Drivers who are 25 years old or older will generally pay less to insure a vehicle. This is based on data that shows that younger, less experienced drivers are more likely to be involved in traffic collisions.
• Coverage type: The larger the scope of the coverage and the higher the coverage limits you choose, the more you will pay for insurance. The deductible, which is the portion that you must pay out of pocket following a claim, is also important in the calculation of your insurance premium. If you are willing to take on more risk with a higher deductible, the insurer will offer a cheaper rate.
• Discounts: Most insurance companies will provide you with discounts if you meet certain criteria. For example, if you have winter tires, or if you have more than one vehicle, you may be eligible for discounts. When you get quotes with RATESDOTCA, we ask the same questions as the insurers do to ensure you are getting the lowest possible price.
• Age and gender: Teens and twenty-somethings pay the most for car insurance. Within that demographic, males can expect to pay significantly more than females. By age 35 and beyond, the differences between men and women mostly even out. That said, men should expect to pay a little more for their coverage. Insurance companies are allowed to set their own rates for non-binary drivers but only if it’s in line with what has been approved by provincial regulators. Insurance providers often charge the low end of the average male or female rate.
• Marital status: In most of Canada, insurance companies are allowed to ask about your marital status for the purpose of setting your auto insurance premium. The exceptions are Manitoba, Nova Scotia, and B.C. One explanation for why insurance companies care about your romantic status is that spouses will likely take turns driving the vehicle, which changes the risk profile of insuring that vehicle. Luckily for single drivers, just because a company can ask about marital status doesn’t mean they will. Insurance providers all have slightly different formulas for evaluating risk and setting premiums. That’s why it’s important to compare rates from multiple companies if you want to find the lowest price.
• FSA: This stands for Forward Sorting Area code, which is the first three characters of your postal code. Insurance providers look at these geographic markers to help set your rate, since location can play a role in the probability and size of claims. Insurers look at the following characteristics in an FSA to calculate risk: the number of vehicle thefts in the area, the amount the insurer has paid out to policyholders, and incidences of insurance fraud. Generally, drivers in commuter cities pay higher insurance rates than drivers in rural areas.
• Driving experience: The longer you’ve held a licence and car insurance, the cheaper your insurance will be. The inverse is also true: If you don’t have a lot of experience driving, insurance companies view you as riskier to insure. For example, If you’ve only obtained your driver's licence in your thirties, your rates may be comparable to a driver in their twenties.
• Claims history: An insurance claim is a request by a policyholder to the insurance provider for compensation for a covered loss. Insurers look at your history of claims and use it as an indicator of what to expect from you in the future. If you have a history of making at-fault claims, your insurance company will view you as someone who is high-risk to insure and will charge you non-standard (i.e., above average) rates for coverage. It’s important to note that this holds true even if your insurer validates a claim and provides compensation. If you are at fault for the incident, your insurance rate will go up at renewal. (You can protect your record by purchasing an accident forgiveness endorsement.)

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The types of car insurance coverage in Canada

Auto insurance is required by law in every Canadian province and territory. The type(s) or coverage and the amount of coverage required vary by location.

Mandatory car insurance requirements typically include the following coverages:

• Third-Party Liability
• Direct Compensation-Property Damage (DC-PD)
• Uninsured Automobile Insurance
• Accident Benefits

Here’s a breakdown of each of these coverages:

• Third-party liability: This coverage protects against losses incurred from third-party claims when you are found to be at-fault for an accident. This includes damage to someone else’s property, bodily injury or death. Your auto insurance quote will always include third-party auto insurance coverage, because it's mandatory across all provinces and territories in Canada.
• Direct compensation-property damage (DC-PD): This coverage means the insurer compensates you directly when your vehicle is damaged in an accident for which you are not at fault. It covers the damage to your vehicle, its contents and the loss of use of your vehicle. Property damage coverage is mandatory in Canada, except in Alberta, British Columbia, Manitoba, and Newfoundland & Labrador.
• Uninsured automobile protection: This coverage protects you if you get in an accident with someone who does not have valid insurance coverage. It can also protect you if you’re the victim of a hit-and-run.
• Accident benefits: This coverage protects you from injury in a collision, whether you are the driver, a passenger, pedestrian or cyclist. There are four main types of accident benefit coverages: income replacement, medical benefits, death/funeral benefits and miscellaneous benefits.

Optional car insurance coverages

These are the optional coverages you can add to a car insurance policy. Note that in some provinces or territories, these coverages may be mandatory.

• Collision coverage: This coverage protects your vehicle against damage that occurs from a collision with an object (like another car). With this coverage, your provider will pay to repair or replace your vehicle, up to its actual cash value, regardless of who is at fault. Collision insurance is not mandatory, except in Manitoba.
• Comprehensive coverage: Comprehensive insurance covers non-collision damage to your vehicle, such as theft, hail, vandalism, etc. Comprehensive insurance is only mandatory in Manitoba.
• Specified perils coverage: This coverage protects against damages caused by named perils, such as theft, attempted theft, explosions and natural disasters, like fire or lightning. Only perils specified by the policy are covered.
• All-perils coverage: This coverage is a combination of both collision and comprehensive insurance. All perils coverage protects your vehicle from all causes of loss except those directly mentioned as exclusions in your policy. It also provides additional protection if your car is stolen or damaged by another driver.

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