New to Canada? Here's How to Get Car Insurance

If you’re a new to Canada, welcome home! As the mayor of Dawson City, Yukon, once said, “Canadians are born all over the world, it just sometimes takes them a bit of time to get here.” I emigrated to Canada when I was very young and received my citizenship in 1974. My citizenship card is one of my prized possessions, and not just because I still had hair in the photograph.

Canada has always been a “net immigration” country — simply put, we are growing our population and economy with newcomers. In 2020, Canada welcomed 184,000 new arrivals. It was the lowest level since 1998 as a result of the COVID-19 pandemic.

For newcomers to Canada, getting a car insurance policy is a legal requirement if you wish to own and drive a vehicle anywhere in the country.

Car insurance varies by province

Car insurance regimens not only vary from country to country, but also from province to province.

In British Columbia, Saskatchewan, and Manitoba, there is a single issuer for automobile insurance — the respective provincial governments. Quebec combines public and private insurance coverage. The remaining provinces and territories allow private insurance companies to provide drivers with the auto insurance coverage they need.

It may seem complicated to negotiate the auto insurance landscape in Canada. But there are two rules that apply across the board:

1) It is mandatory to have at least basic insurance coverage.

2) You’ll need a valid Canadian driver’s licence. If you intend to use a foreign driver’s licence to drive in Canada, you can for a short time but check with the province or territory you are living in to find out how long you are permitted to do so. For example, in Ontario, the licence from the country you emigrated from is valid for up to 60 days. If you wish to use a foreign driver’s licence, the Canadian government recommends you get an international driving permit in your home country.

Getting a Canadian driver’s licence

Exchanging a foreign driver’s licence for a Canadian one depends on your eligibility. Your driving experience is considered, but each province and territory has its own criteria you must meet. In general, you may need to take an eye test and write an exam on the rules of the road as well as taking up to two driving tests.

Most provinces have adopted a form of a graduated licensing program. For example, to get a full G licence in Ontario, you must advance through different stages first. Ontario’s program involves passing a written test to receive a G1 licence (the first step), which requires that you are accompanied by a fully licensed driver whenever you drive with at least four years of experience.

The next step is getting a G2 licence. It requires passing a road test, and while G2 drivers can drive alone, there are restrictions. For example, if you’re 20 years-old or older, the number of passengers in the vehicle you’re driving cannot exceed the number of working seatbelts, and there’s absolutely zero tolerance for alcohol or drug consumption. If you’re 19 years-old or under, you may only have one passenger aged 19 and under when driving between midnight and 5 a.m. for the first six months of getting a G2. After six months, you are permitted to have up to three passengers aged 19 or under. After driving for 12 months with a G2 licence, you may take a road test to qualify for a full licence.

Other provinces and territories have their own rules for obtaining a driver’s licence:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Nunavut
• Prince Edward Island
• Quebec
• Saskatchewan
• Yukon

Finding the best car insurance premium

A lot of factors go into the calculation of your car insurance premium. Some of these factors include age, driving record, and experience — the longer you’ve been driving, the lower your rate. A letter of experience from your previous insurance company may help, but insurers aren’t obligated to consider it. Ask potential providers if they will factor it into your rates.

There are other things you can do to reduce the cost of your policy, including:

• Bundle home and auto policies. If you’re getting car insurance, chances are you’re also looking into buying home insurance or condo insurance. If you purchase both policies from the same provider, you qualify for what’s known as a multiline discount, which will reduce your overall insurance bill by about 15%.
• Sign up for usage-based insurance (UBI). Some insurers offer UBI programs which tracks driving behaviour, distance travelled, and other factors. Enrolling in a UBI program usually triggers a 5% to 10% discount off the bat. By demonstrating safe driving behaviour consistently, you can earn up to a 25% discount on your premium.
• Shop around. There are plenty of options in provinces like Alberta and Ontario which don’t have a publicly mandated system. Get a free insurance quote for driving in those provinces and compare policies and premiums to find the most affordable price for the coverage you need.