Owning a car in Canada is no small expense. In fact, the average Canadian driver now spends $1,387 a month, or $16,644 a year, on car payments, gas, parking, maintenance, and insurance. With expenses this substantial, it’s natural to look for ways to cut your spending. Car insurance, however, is not the area where you want to make sacrifices. While there are ways to save money on car insurance, entirely eliminating it is not an option, and here’s why.
Car insurance is not just a recommendation in Canada – it’s a legal requirement. Without a policy that meets at least the minimum requirements of your province or territory, you not only risk fines, license suspension, and vehicle impoundment, but you’re also fully financially responsible and legally liable for any damages or injuries you cause in an accident.
In this article, you’ll learn more about why car insurance is mandatory in Canada, as well as find a list of the insurance requirements for each province and territory.
Do you need insurance to drive in Canada?
Yes, car insurance is legally mandatory across Canada. At the very least, you will need a policy that includes third-party liability and accident benefits coverage. Third-party liability coverage covers damage to other people’s property and injuries to others in an accident you are responsible for, while accident benefits coverage covers medical expenses, rehabilitation costs, and income replacement for you and your passengers regardless of who is at fault.
Additional coverages may be mandatory though, depending on which province or territory you live in. To find out what the car insurance requirements are in your home province or territory, reference the list below. However, you should always check your province or territory’s government website for the most current information on mandatory car insurance rules.
Ontario: It is mandatory to have car insurance in Ontario. At a minimum, third-party liability, statutory accident benefits, direct compensation for property damage, and uninsured motorist coverage must be included in your policy.
Quebec: It is mandatory to have car insurance in Quebec. Although the province has a public no-fault car insurance plan, you must also have a civil liability insurance policy with at least $50,000 in coverage.
Alberta: It is mandatory to have car insurance in Alberta. At a minimum, accident benefits and third-party liability coverage must be included in your policy.
British Columbia: It is mandatory to have car insurance in British Columbia. At a minimum, you must purchase an ICBC Basic Autoplan from the Insurance Corporation of British Columbia.
Manitoba: It is mandatory to have car insurance in Manitoba. At a minimum, you must purchase an Autopac Basic policy from Manitoba Public Insurance (MPI).
New Brunswick: It is mandatory to have car insurance in New Brunswick. At a minimum, third-party liability, accident benefits, direct compensation for property damage, and uninsured motorist coverage must be included in your policy.
Newfoundland and Labrador: It is mandatory to have car insurance in Newfoundland and Labrador. At a minimum, third-party liability and uninsured motorist coverage must be included in your policy.
Northwest Territories: It is mandatory to have car insurance in Northwest Territories. At a minimum, third-party liability, accident benefits, and uninsured motorist coverage must be included in your policy.
Nova Scotia: It is mandatory to have car insurance in Nova Scotia. At a minimum, third-party liability and accident benefits must be included in your policy.
Nunavut: It is mandatory to have car insurance in Nunavut. At a minimum, third-party liability and accident benefits must be included in your policy.
Prince Edward Island: It is mandatory to have car insurance in Prince Edward Island. At a minimum, third-party liability, statutory accident benefits, and uninsured motorist coverage must be included in your policy.
Saskatchewan: It is mandatory to have car insurance in Saskatchewan. At a minimum, you must purchase a basic insurance policy from the Saskatchewan Auto Fund.
Yukon: It is mandatory to have car insurance in Yukon. At a minimum, third-party liability and accident benefits must be included in your policy.
Why is car insurance mandatory?
Accidents happen, even to the most cautious drivers, and they often have consequences that extend beyond the confines of your vehicle. The toll is not merely personal; it can affect the lives of other motorists and pedestrians, too. On top of that, the financial and legal ramifications can be staggering, casting a shadow over your financial security and legal standing for months, if not years.
It is for this reason that car insurance is mandatory in Canada. It provides financial and legal protection for you against damages or injuries you cause to others in an accident. For other drivers and pedestrians, it ensures they have access to resources for any resulting damages or medical expenses. It even distributes the burden of car accidents across society, thus alleviating the economic impact collisions can have.