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With more than 100 car insurance companies across Canada, and auto insurance rates increasing on average 5% per year, it pays to shop around.
Luckily, we’ve got you covered. We reviewed all of the top insurance companies to figure out which personal car insurance policy is right for you.
Read this guide because it's your resource for identifying the most reliable and cost-effective car insurance companies in Canada, while sharing tips to save you money.
Is Auto Insurance Mandatory in Canada?
Car insurance is mandatory for all drivers in Canada, which means every province including Quebec, Alberta, Nova Scotia, and Saskatchewan. Every Canadian province requires car owners to at least carry liability and accident benefits/bodily injury coverage. Some provinces may require you to have additional coverage. Unlike car insurance, life insurance is not mandatory. There are some popular insurance companies that you may hear when researching for car insurance, such as Belairdirect, TD Insurance, and Desjardins. These insurance companies may be popular, however, these companies may not always be the best choice for you.
What Factors Determine Car Insurance Premiums?
An insurance company use various factors to set your insurance premium rate. These include:
- The current age and value of your car
The type of car you drive has a big impact on your rates. This includes:
The value of your car: Cars that more expensive to replace or repair, like sports cars or luxury vehicles (e.g. BMW, Mercedes), generally costs more to insure.
The current age of your car: Brand new cars usually cost more to insure in comparison to old cars. However, keep in mind that insurance premiums may increase after a car passes a certain age, generally 10 years.
How popular your car is with thieves: In 2021, the most stolen cars in Canada were Ford F-150 Series/F-250 Series, Honda CR-V Series, Lexus RX350 Series/RX450 Series, Honda Civic Series, and Toyota Highlander Series. If you drive one of these makes and models, expect to pay more for auto insurance.
- Your driving habits
An insurance company also takes into account why and when you travel with your car. If you use your vehicle mostly for personal use, you will pay a lower rate than someone who drives all around Manitoba for business five days a week. Similarly, driving frequently during peak hours raises the cost of insurance. When there are more vehicles on the road, your odds of getting involved in an accident increase, statistically speaking.
An insurance company is also concerned with your annual mileage. The more kilometres you drive in a year, the higher your insurance rate. The likelihood of car accidents is proportional to the amount of time spent driving.
- Driving history
Car insurance providers analyze a driver's past driving history to predict future driving habits. If you have been convicted of driving while intoxicated or have several driving tickets or driving offenses, expect your vehicle protection premiums to increase.
- Age
Age matters when it comes to car insurance. Drivers under the age of 25 tend to receive higher premiums because insurance carriers view them as high-risk. Once you turn 25, your premium rates can start to decline.
- Gender
Statistically speaking, men present more of a risk to insure than women. Men are more likely to receive DUIs and engage in dangerous driving behaviors, like speeding. As a result, men pay on average 5% more for car insurance cover compared to females.
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Find the best rates
- Location
Where you live can have a large impact on the amount you pay for car insurance premiums. For example, the average premium for car insurance in British Columbia is $1,680 per year whereas the average premium for car insurance in Quebec is $735 per year. Although your postal code has an impact on your insurance prices, it can be a bit of a lottery. If you reside in a location with a higher crime and vandalism rate than the national average, your auto insurance premiums will cost more. The same is true if you routinely drive on a dangerous road. Even though this has nothing to do with your driving practices, it may increase your chances of being involved in a car accident or theft.
- Coverage level
A car insurance policy is required for all drivers in Canada. You must carry, at minimum, liability and accident benefits/bodily injury coverage. Of course, you can buy additional coverage. However, keep in mind that the more coverage you get, the greater the annual price.
The amount of auto insurance deductible you select will also affect your insurance premiums. A deductible is the amount of money you pay out of pocket in the case of a claim before your policy covers the balance. Your rates will be less expensive if you have a larger deductible.
What Are the Best Car Insurance Companies in Canada?
CAA
Rating: 4.7 / 5
Canadian Automobile Association (CAA) is a not-for-profit organization with 6.5 million members nationwide. CAA is made up of several clubs, which blanket the country from Prince Edward Island and Newfoundland to British Columbia. CAA offers customizable car insurance plans at competitive rates. You can choose the levels of coverage or deductible you prefer and specify whether you want certain features (such as rental car insurance coverage).
The insurer offers a wide array of discounts to help you cut down the cost of coverage, including a bundle discount, multi-vehicle discount, and winter tire discount. Getting a CAA membership will reduce your premiums by up to 20% and allow you to enjoy several benefits for free. These include free roadside assistance, towing, membership discounts, and access to its rewards program.
CAA is an excellent option for car insurance.
Co-operators Insurance
Rating: 4.5 / 5
The Co-operators is one of the top car insurance providers in Canada. The insurer performs flawlessly in most crucial departments and boasts an impressive customer service record. Thanks to its strong financial health, drivers can count on it to cover their claim expenses without any delays.
The Co-operators provide personal car insurance policies at reasonable prices and offer all mandatory and popular types of coverages. These include: uninsured automobile coverage, third-party liability coverage, accidents benefits coverage, collision or upset coverage, direct compensation property damage (DCPD) coverage, all perils coverage, specified perils coverage, and comprehensive coverage.
In addition to these, the insurer offers a slew of add-ons for extra protection, such as loss of use coverage, accident forgiveness, limited waiver of depreciation, family protection endorsement, transportation replacement and additional equipment coverage.
Co-operators offer several discount programs to help you save money on car insurance. These include a driver-training discount, multi-policy discount, multi-vehicle discount, winter tire discount, and telematics discount.
All in all, excellent services for customers, robust financial health, and affordable rates make Co-operators a strong choice to be your selected car insurance company.
Aviva Canada Insurance
Rating: 4.4 / 5
Financially strong and available throughout Canada, Aviva is a great insurance company, and another excellent option for car insurance. Aviva has reasonably affordable rates and offers some unique features, including specialized insurance coverage for Uber and Lyft drivers in Ontario. But it offers fewer discounts than some other providers and does not provide online quotes.
Aviva offers all the standard types of car insurance coverage: direct-compensation property damage coverage (DCPD), accident benefits, third-party liability coverage, accident insurance coverage, and uninsured motorist coverage. Apart from these, you can buy various add-ons to customize your policy to meet your needs. Optional features available include collision protection, transportation replacement, conviction protection, accident forgiveness, disappearing deductible, and comprehensive coverage.
Aviva offers vehicle owners four ways to reduce the cost of vehicle protection coverage:
- Bundle discount (Combining Aviva auto and home insurance will allow you to save on both)
- Multiple-vehicle discount (Insure two or more automobiles with Aviva and the provider will reduce your premiums)
- Retiree discount (Aviva makes car insurance more affordable for retirees)
- Clean driving discount (Drivers with a clean driving record earn a handsome discount)
Intact Insurance
Rating: 4 / 5
Intact is one of the biggest names in the Canadian car insurance industry, while also being a very well respected insurance provider. Its car insurance products are reasonably priced and available throughout Canada. Plus, they are backed by a 30-minute claims handling guarantee. Intact promises to act on your claim request within 30 minutes or refund the annual premium. However, Intact offers fewer discounts than some of its competitors, and its customer service is not the best in the business.
Like all the major car insurers, Intact offers several add-ons on top of standard coverage options. These include collision or upset, all perils other than collision or upset, specific perils, roadside assistance, accident forgiveness, and minor conviction protection.
With Intact, you can save up to 30% by driving safely, up to 15% by bundling auto and home insurance/property insurance, and up to 20% by driving an all-electric or a hybrid car.
Economical Mutual
Rating: 4.5 / 5
Economical Mutual is a top car insurance provider in Canada. The company goes all the way back to 1871 and is financially very strong. While Economical Mutual is a good option for all drivers, in recent years it has built a reputation for providing high risk auto insurance. If you are a high-risk driver, Economical Mutual is likely to offer you the best deal through its Perth Insurance subsidiary.
Like other big players, Economical Mutual offers a range of add-ons to help you customize the policy according to your needs. It also rewards its policyholders with a number of discounts, including a multi-vehicle discount, safe driver discount, security discount (you must have an anti-theft device installed in your car to be eligible), bundling discount, and conviction free discount.
On the downside, Economical Mutual does not yet have a mobile app.
Pembridge
Rating: 4.4 / 5
Established in 1999, Pembridge is the youngest car insurance company in our list. But when it comes to providing relatively cheap auto insurance coverage, Pembridge packs a punch. The provider also promises that all policyholders will receive personal attention from its claim agents. However, you cannot get an online insurance quote, since Pembridge sells insurance only through insurance brokers.
Aside from the three mandatory coverage types — liability, accident benefits, and direct compensation property — Pembridge offers a wide range of add-ons. These include collision, comprehensive, specified perils, all perils, loss of use, waiver of depreciation, and damage to a non-owned vehicle.
Pembridge offers seven discount programs: multi line, mature driver, multi vehicle, renewal, education, grad license, and retiree.
Best Ways to Save Money on Auto Insurance
Auto insurance does not have to be expensive. Here are seven ways to save money on car insurance in Canada:
- Shop around
Even though car insurance providers look at similar factors to decide your premium rates, such as driving history, driving behaviour, and age, each assesses risk differently. That is why it is important to obtain quotes from multiple suppliers.
- Take advantage of discounts
An insurance provider usually offer different ways to lower the cost of car insurance, so make sure you are getting all the eligible discounts.
Some of the most common discounts include:
- Multiple policy discounts: Car insurance companies typically sell other insurance products and many offer a discount if you buy two or more types of insurance from them. For example, purchasing both home and auto insurance with the same provider may earn you a discount on one or both policies.
- Low mileage discount: A lot of auto insurance providers offer a discount if you drive less than a certain number of kilometres per year.
- Safe driving discount: A clean driving record has its perks, including lower car insurance premiums.
- Telematics insurance discount: Some insurers reduce your monthly premium if you agree to install a telematics device in your car or use an app that tracks your driving habits.
- Safety feature discount: Some car insurance companies offer discounts if your vehicle has certain safety features. Each provider has different requirements for safety features that are eligible for discounts, so discuss these with your insurer or agent before signing up.
- Winter-tire discount: Equipping your car with winter tires not only reduces the risk of accidents but can also save you money on car insurance premiums.
- Choose the right amount of deductible
One of the simplest ways to lower your car insurance premium is to choose a higher deductible. For instance, choosing a $1,500 deductible instead of a $500 deductible will bring down your car insurance cost of coverage.
- Pay annually
Paying your car insurance premiums annually instead of monthly can easily save you about 10% per year.
It is smart to contact many companies for a quote before purchasing insurance.
Conclusion
Car insurance is mandatory for all drivers in Canada. CAA, Co-operators, Aviva, Intact, Economical Mutual, and Pembridge are among the best car insurance providers in the country. All of them offer customizable car insurance coverage at affordable rates. Feel free to contact a Dundas Life advisor for more information on auto insurance companies.
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