How Much Does Car Insurance Cost in Canada?
Car insurance is mandatory and varies widely by province, driving record, and vehicle. Here's what Canadians can expect to pay and how to lower your premiums.
Car insurance is legally required everywhere in Canada, and it's one of the biggest ongoing costs of vehicle ownership. The average Canadian spends between $1,300 and $3,200 per year on auto insurance, depending on where they live, what they drive, and their driving record.
How Much Does Car Insurance Cost by Province?
Insurance rates vary dramatically across Canada:
- Ontario: $1,500–$2,500/year (highest in Canada)
- British Columbia: $1,600–$2,200/year (public system, ICBC)
- Alberta: $1,200–$2,000/year
- Quebec: $700–$1,200/year (lowest in Canada)
- Manitoba/Saskatchewan: $1,000–$1,400/year (public system)
Ontario drivers typically pay the most, while Quebec drivers pay the least. The difference comes down to population density, fraud rates, and whether the province runs a public or private insurance system.
What Affects Your Car Insurance Rate
Several factors determine what you'll pay:
- Driving record — A clean record keeps your rate low. Tickets and at-fault accidents can raise your premium by 25–100%.
- Location — Urban areas with more traffic and theft cost more than rural areas.
- Vehicle type — Luxury vehicles, sports cars, and frequently stolen models cost more to insure.
- Age and experience — Drivers under 25 and those with less than 6 years of experience pay more.
- Coverage level — Minimum liability is cheapest; comprehensive and collision add cost but protect your vehicle.
Required vs Optional Coverage
Every province requires a minimum level of liability coverage. But most financed vehicles also require:
- Collision coverage — Pays for damage to your vehicle in an accident
- Comprehensive coverage — Covers theft, vandalism, and weather damage
- Specified perils — Covers fire, theft, and certain risks
If you're financing a car, your lender will almost always require collision and comprehensive coverage until the loan is paid off.
How to Lower Your Car Insurance Premium
- Bundle policies — Combine home and auto insurance for a 10–15% discount
- Increase your deductible — A higher deductible lowers your monthly premium
- Take a defensive driving course — Some insurers offer a 5–10% discount
- Use winter tires — Many provinces offer 5% off for using winter tires
- Compare quotes annually — Rates change yearly; shopping around can save hundreds
Insurance and Your Car Loan
If you're financing a vehicle, your lender may also require gap insurance. Gap insurance covers the difference between what you owe on your loan and what the car is worth if it's totalled — which can be critical in the first few years when depreciation outpaces your loan paydown.
Budgeting for Insurance
When figuring out how much car you can afford, don't forget to include insurance in your monthly budget. A good rule of thumb: your total transportation costs (payment + insurance + fuel + maintenance) should stay under 15–20% of your monthly take-home pay.
Use our Total Cost of Ownership calculator to see how insurance fits into the full picture of vehicle ownership costs.
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Affordrive does not guarantee financing approval. Financing decisions, rates, terms and vehicle availability are determined by the applicable lender and dealership.
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