New to Canada? You may be looking into acquiring a driver’s licence soon after you arrive. One thing that is true, no matter where you decide to relocate to in Canada, is all drivers must have a valid insurance policy to drive. It’s a legal obligation. You are also required to have at least the minimum coverage as defined by the province you reside. But how much do you need? We have compiled a guide to auto insurance for immigrants new to Canada. Let’s look at how to qualify, whether your previous driving history is valid, and how to save money on your car insurance.
New to Canada: Why you’ll need car insurance to drive legally
Car insurance is mandatory in Canada, but coverage and rates can vary among provinces and insurance companies. Auto insurance protects you from having to pay for car repairs in case of a collision or liability claim, such as damage to another person’s vehicle or bodily damage. Although it is not a criminal offence, section 2(1) of Ontario’s Compulsory Automobile Insurance Act states, “subject to the regulations, no owner or lessee of a motor vehicle shall operate [it] or cause or permit the motor vehicle to be operated on a highway unless the motor vehicle is insured under a contract of automobile insurance.” Therefore, it’s a serious offence to operate a vehicle without insurance.
While you are not committing a criminal offence and no demerit points are involved, you’ll face some serious penalties:
- Your fine for driving without a licence starts at $5,000.
- The Ontario car insurance regulator, FSRAO, will charge an additional 25% surcharge to your fine.
- Your licence suspension lasts for a minimum of 30 days and up to a year.
- Possible impoundment of your vehicle for three months.
If caught driving without a licence in Ontario, it can result in fines ranging from $5,000 to $25,000 for the first offence. If you are caught a second time, fines can reach $50,000. As a result, you can have your licence suspended and your vehicle impounded. This is why auto insurance for immigrants is crucial to drive successfully (and legally) in Ontario.
Did you know? More than 100,000 immigrants arrive in Ontario each year, especially in Toronto and the surrounding suburbs. That is almost half of the total number of new Canadians per year, making Ontario the most diverse province in the country!
Auto insurance for immigrants to Canada: A breakdown
In order to acquire car insurance in Canada, there are a number of progressive steps you’ll need to follow to secure insurance once you move here. Steps can vary somewhat based on the province you live in:
1. Check your qualifications
It’s always best to check to see what paperwork you will require before you move. For example, proof of insurance, licensing, and other documents are much easier to obtain while you are still in your home country rather than trying to acquire them after moving.
2. Licensing
Apply to exchange your current driver’s licence for a Canadian one. Check your province’s website to see if you qualify, and what level of licence you’ll receive. Take the proper written and driving tests, if necessary. Some global insurance companies might honour the driving experience of customers who held a policy in their country of origin. You would receive a Canadian-equivalent driving record of a maximum three years, provided you obtain an Ontario G class licence and you have had a licence in your originating country for three years or more.
When moving to Ontario, you can use your foreign driver’s licence for 60 days. After that, you need to exchange it for an Ontario driver’s licence if you want to continue driving. While you may be given credit for previous years of driving experience, from an insurance perspective, your driving record begins the day you get your Canadian driver’s licence. In Ontario, the Ministry of Transportation (MTO) currently allows those from the following countries to switch to an Ontario driver’s licence:
- United States
- Australia
- Austria
- Belgium
- France
- Germany
- Great Britain
- the Isle of Man
- Japan
- South Korea
- New Zealand
- Northern Ireland
- Republic of Ireland
- Switzerland
- Taiwan
To learn more about what you need to apply for an Ontario driver’s licence, please click here.
3. Shop for insurance
Is my insurance history valid in Canada?
Yes. In most situations, your previous insurance history will be valid. Before moving, speak with your insurance company and get a copy of your insurance history. Most Canadian insurers will recognize your experience and classify you accordingly if you provide them with proof. While this may seem like an extra step, it will prove you’re a safe driver and help you save money on your policy.
How much can I expect to pay for insurance as an immigrant to Canada?
Newcomers will often pay higher insurance rates by virtue of being unfamiliar with Canadian roads and traffic, and have a higher likelihood of getting into an accident or receiving a traffic violation. Some insurers do take your experience from other countries, which will help to lower your premiums. This is why having proof of your insurance history from your previous country is important. Not only for procuring a licence, but also lowering your premiums.
“Newcomers see higher premiums because they don’t have experience with driving on Canadian roads, and aren’t used to the traffic, rules, and winter driving conditions,” explains Henry Lof, an insurance expert with RATESDOTCA. Remember, just as new drivers gain experience on the road and their rate goes down as they get older, newcomers gain Canada-specific driving experience and will see their rate go down over time, as well.
Important: A person relocating from a country that has a reciprocal agreement with Ontario can obtain a driver’s licence for Ontario without having to go through the regular process, which can take more than two years.
4. Get insured
Once you have the proper licensing in place, along with any supporting driving and insurance history, you are ready to get insured! Choosing an insurance plan takes time and consideration. You’ll want to ensure a policy that best meets your budget, as well as your driving needs. Buying insurance varies across Canada. In some provinces, like British Columbia, you can get insurance through the government. However, in most provinces, you can get insured through private insurance companies. Your isure broker can help you to compare quotes from multiple insurers all at once in the province of Ontario. Some of the insurers we work with include:
- Gore Mutual
- Intact Insurance
- Aviva Canada
- Economical Insurance
- Travelers Canada
- SGI Canada
- And many more isure-approved insurers!
How to save money on your car insurance if you’re new to Canada
As a new driver in Canada, you have many policy options to choose from. All Ontario auto plans include:
- Third party liability
- Accident benefits
- Direct compensation property damage and
- Liability protection for uninsured drivers
You can choose to increase your coverage limits, and add collision, comprehensive, and other forms of protection to customize your policy. Our isure representatives can help you customize coverage that best suits your individual needs.
Here are some things you can do to lower your auto insurance premium once you get to Canada:
- Graduate to a G licence as soon as possible: Make sure you don’t sit on your G2 for long. Get your G licence as soon as possible! By graduating as quickly as possible to your full licence, you can lower your insurance rate.
- Consider being added as a secondary driver to someone’s policy: If there is another car in your household, see if you can be added to the policy as a secondary driver. This is another way to build-up driving experience. However, if your car is leased or owned in your name, you are considered the primary driver.
- Choose your car carefully: Choose a vehicle that is considered insurance-friendly. These are vehicles with good safety ratings, have lower repair costs and are not commonly targets for thieves.
When giving a quote, insurers mainly look at a driver’s age, history, credit score and other details, like occupation and homeownership. As a secondary motorist, it can influence the costs on the premium. However, the additional cost will be much less than if you are the primary driver on your own policy.
- Increase your deductible: The higher your deductible, the lower your premium will be. But a higher deductible also means having enough money set aside in case of a claim.
- Invest in winter tires: In Canada, not only do they protect you against wintry terrain and climate conditions, winter tires can earn you a discount on your car insurance. By law, insurance companies are required to offer you a 2-5% discount once informing them that you have winter tires.
- Bundle your home and auto insurance: As you settle into your new life in Canada, there are multiple insurance products you will need. One way to save money on insurance is to bundle your home, condo, or tenant insurance with your auto insurance by purchasing both from the same insurance provider. Depending on the company, you can save up to 15%!
We all want to save money, right? In this country, it’s advantageous to compare auto insurance quotes, especially if you’re an immigrant to Canada. By consulting with an isure broker, you can compare coverage and pricing options from top insurance providers. This allows you to find the best policy based on your unique driving needs. Our guide to auto insurance for immigrants new Canadians can help you make the transition to driving in a new country as smooth as possible.
