Canadian Car Insurance vs. US Car Insurance
Canadian car insurance vs. US car insurance — there are a few critical differences. The Canadian government will sometimes pay injury claims. US insurance companies always pay injury claims. Canadian car insurance vs. US car insurance rate differences are just the tip of the iceberg.
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UPDATED: May 19, 2022
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- Canada and the United States have many similar requirements for car insurance
- Both countries require proof of car insurance as well as require a minimum amount of liability coverage
- Canada and the U.S. also have many differences for car insurance
- In some Canadian provinces, the government, not the insurance company, pays injury claims
- The search process for insurance remains the same in both countries
When you move from one country to another, you will find that the laws for car insurance will vary just like the laws for life insurance in Canada VS USA. For example, laws concerning Canadian car insurance and U.S. car insurance are different, even though these two countries are right next to each other.
Canada has some differing requirements by province. But the differences in US states are much wider. In addition, if you’re driving to a different province in Canada and their liability requirements are higher, your insurance coverage would adjust to meet those requirements during your stay. Car insurance needs for driving in Canada are different from U.S. car insurance needs.
Read on to learn the similarities, the differences, and how to save money on car insurance in Canada vs. USA.
What are the similarities between Canadian and U.S. car insurance?
Do you need car insurance in Canada? Absolutely. Despite the fact that there are many differences between these two countries, they both have some things in common when it comes to insurance. Let’s compare Canadian car insurance requirements to those of the U.S.
- It is required for any driver to have car insurance or at least proof of ability to pay for damages, or it is illegal for them to drive. Also, in both countries, you receive an insurance card when you purchase your car insurance.
- In most states, you are required to show your insurance card on demand, which is also a requirement in Canada. Much like in the U.S., it is rare for the Canadian police to pull someone over simply to check their insurance coverage.
- Also, in the U.S. there are no-fault states that don’t allow drivers to sue if an accident occurs due to negligence. In Canada, there are several provinces with this same policy. What is a no-fault insurance state? Insurance pays for repairs and injury costs, regardless of who caused the accident.
- Both countries have liability limits. In the U.S., the state sets the liability requirements. You can always get more than the minimum coverage, but the minimums are largely based on liability limits.
- If you cause an accident in the U.S. or Canada, your insurance is required to cover the cost of paying the damages. Also, if you don’t purchase comprehensive coverage, your vehicle will not be repaired.
- You will also find that both the U.S. and Canada have heavy competition regarding selling insurance. There are different options for coverage types, price differences between companies, and more.
- Both Canadian and U.S. citizens will find that they can save money on their insurance by choosing a larger deductible for their insurance policy. What is a car insurance deductible? It is the amount you agree to pay after an accident before your insurer will cover the rest of the bill. Also, there are discounts for good drivers, experienced drivers, and so on in each of these countries.
- Insurance companies are required to be licensed to sell insurance by Canadian province just like insurance companies in the U.S. Naturally, someone in either country looking for insurance has to determine whether or not a company is licensed to sell to them.
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What are the differences between Canadian and U.S. car insurance?
One major difference between Canadian auto insurance and U.S. coverage is that in some provinces in Canada, like Quebec, your insurance company does not pay your injury claim. The Quebec government does. Notice the stipulation to that is a claim for an injury. The idea is to minimize the burden on the system by treating injuries before they bloom into bigger emergencies.
The private insurer continues to pay any claims for the damage made to the vehicle in the course of a car accident.
This type of injury claim varies between provinces. If you’re driving in a foreign province, your Canadian insurance will temporarily increase to meet their coverage standards if they’re higher.
Car Insurance in Canada Explained
There are other significant differences between the provinces and the states:
- The name of an insurance card in Canada is a bit different. It is called a Canadian Interprovincial Motor Vehicle Liability Insurance Card or pink card for short.
- Another interesting difference is that, in Canada, if a car is registered then it is considered to be insured. According to JamesArner (a Canadian immigration resource), if a Canadian driver stops paying his insurance, his vehicle automatically becomes unregistered. The driver is then driving illegally. This applies in a wide range of situations. Your driving record is tracked and applied in both countries, but when you drive without insurance, you’re breaking more laws in Canada.
- An impressive difference between these two countries is that some Canadian provinces require more than liability coverage for any vehicles on the road. In the U.S., liability is the only required coverage unless you have a lender that requires more coverage as part of your loan contract. There is also one US state that does not require insurance or personal injury protection. Instead, they typically ask for “proof of financial responsibility” which can be fulfilled by liability insurance or something else like a bond.
How can you save on Canadian or U.S. car insurance?
The good news is that saving money on an auto policy in either country is the same. You can get free car insurance quotes from multiple car insurance companies by using a free quote tool online. You can see who offers the lowest auto insurance premium while comparing like policies. The type of vehicle you drive, any safety features, and your coverage options also play a role in determining your premium.
In addition, you can visit individual car insurance company websites to get a quote, although that method is more time consuming.
In many cases, you will find out the best car insurance companies that sell insurance in both the U.S. and Canada. Some sell insurance in many countries across the world. So if you are making a move to a new country, you may be able to stay with the company you are both familiar and comfortable with. You would still need to call them to make sure you have the right plan, and your insurance premiums could change. Make sure that you also take advantage of discounts, as discounts in both Canada and the U.S will save you money. Take a look a the table below for examples of discount groups and savings.
|Average Car Insurance Discounts||Discounts that Fit in This Category||Average Percentage Saved on Common Discounts|
|Vehicle Discounts||Any discount for safety features on your car||Anti-Lock Brakes: 5.3%
Passive Restraint: 18.1%
|Safe Driver Discounts||Any discount for safe driving habits||Claim Free: 19.1%
Defensive Driver: 7.3%
Driving Device/App: 26.2%
|Young Driver Discounts ||Any discount for teenagers and college students||Driver’s Ed: 8%
Distant Student: 12.5%
Good Student: 12.7%
|Policy Holder Discounts||Any policy usage discount for customers||Early Signing: 10.3%
Multiple Policies: 14.4%
Multiple Vehicles: 13.6%
|Personal Status Discounts ||Any discount for personal status, such as homeownership||Homeowner: 6.2%
Senior Driver: 7.5%
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Most insurers offer an average of 28 discounts. So you can save a significant amount of money on your car insurance policy. These discounts will be universal, no matter if you are in Canada or the U.S. So make sure that your insurer is applying all the discounts you qualify for.
Frequently Asked Questions: Canadian Car Insurance vs. U.S. Car Insurance
Whether you are looking for car insurance for Canadian snowbirds or car insurance for a Canadian student in US, this list of frequently asked questions will help clear up any questions you have about Canadian versus U.S. car insurance.
Is US car insurance valid in Canada?
If you are traveling to Canada or are a Canadian snowbird, you probably want to know “does my US insurance work in Canada?” As long as you are in Canada on a tourist status and don’t go past the visiting time limit, your US car insurance will cover you. There is no special insurance for cars in Canada for visitors — all you need is your US insurance.
Does my Canadian car insurance cover me in Europe?
Canadian car insurance in Europe will not be valid. However, Canadian car insurance in the USA will be valid since it only extends to the US (and vice versa). Outside of the US, you will likely need European rental car insurance to drive around.
Does Geico cover me in Canada?
Yes, Geico will still cover you if you take a trip to Canada. Any U.S. car insurance company will extend coverage to Canada if you are visiting. You will be able to use your Canadian auto insurance in the USA.
Is there Canadian car insurance for international drivers?
If you are an international driver in Canada, you will have to get a temporary Canadian license and short-term Canadian car insurance in order to legally drive.
How much does it cost to insure a car in Canada?
Some people ask, “why is car insurance so expensive in Canada?” The truth is that the cost to insure a car in Canada will be similar to U.S. insurance costs. If your Canadian car insurance costs are expensive, then shopping around and comparing rates will help you save on car insurance.
If you are ready to start getting online car insurance quotes for USA car insurance that may apply to Canadian car insurance, you can start comparison shopping.