Auto Insurance Is Compulsory In Canada

Published: February 26, 2018

Updated: September 20, 2018



In every Canadian territory and province, whether you are a senior driver or a first time driver, the law says you must have car insurance when you drive. If a driver is stopped by a police or gets involved in an accident and he does not have auto insurance, the outcome can be grave. The driver’s license may be canceled or suspended, demerit points will be written in the driver’s record, severe fines may apply, and the vehicle may be impounded and a fine may be paid before the vehicle can be reclaimed.

If a driver is involved in an auto crash and he does not have auto insurance, he will be involved in a severe financial problem. For example, if another driver is severely hurt and their vehicle is seriously damaged, you will likely be responsible for their vehicle repairs, medical cost, vehicle replacement or a punitive damage may be award to the driver. This could lead to financial losses of up hundreds of thousands of dollars. You may also be liable for your legal costs as well as that of the other driver.

If you do not have an insurance cover, you may not have the money to hire a lawyer to represent you if the other driver is found to be at fault. In some provinces, there is a maximum amount for compensation which any one can get. For instance the capped amount for pain and suffering in Nova Scotia is $2,500. These claims are not part of the claims for medical expenses, loss of income, and property damage. Owning auto insurance will protect you from financial turmoil.

Two vital kinds of auto insurance coverage are Collision and Liability coverage. Liability is mandatory in every province and territory. This kind of insurance protects you if another person’s property, another driver, or another driver’s car is damaged when an accident occurs. Collision coverage will protect you if your vehicle is damaged due to an accident arising from a collision. Though collision is not compulsory in Canada, it is recommended for drivers of expensive vehicles.

There are certain factors which insurance firms consider when calculating an insurance premium for a driver. A driver that has a clean record will pay less for insurance because they are seen as low risk compared to drivers who have a history of speeding and other traffic offenses.

Teenage drivers are seen as high risk because they have little or no experience. Many insurance companies however, will give discounts to teenage drivers who maintain a particular grade average in school or have undertaken a driver training program.

There are other discounts as well which any driver can enjoy such as discount for anti-theft device, discount for members of an auto club, green vehicle discount, multi vehicle discount, discount for observing low mileage etc. It is imperative to ask your insurer for the discounts which they have on offer. The year, make, and model of the car will affect the cost of insurance premiums.

You will be running the risk of a severe financial loss if you do not have car insurance as a driver in Canada. It helps a lot when you obey the laws governing car insurance as the premium you will pay will be far less than what you will have to pay when you are caught driving without an insurance.