How car insurance works for newcomers to Canada
African american man and woman couple driving car at street

Canada is proud of its diversity and welcomes newcomers from all over the globe to build our society and enrich our communities. In 2022, around 431,000 permanent residents arrived in Canada. And the IRCC has processed nearly double the number of applications in 2022.1 That means there are many new drivers on the road! 

If you’re new to Canada as an immigrant, refugee, or international student – welcome! There are a lot of things you’ll be trying to figure out as you get settled and car insurance is one of them – especially if you’re a first-time car owner in Canada. But don’t worry, we’re here to help make the process as smooth as possible. Keep reading to learn what to expect when it comes to car insurance for newcomers to Canada. 

Do newcomers have to get car insurance in Canada?

Let’s settle one fact – car insurance is mandatory in Canada if you own a vehicle. That’s right. Whether you own a little commuter car or a minivan for the whole family, you’ll need to get some basic coverage. Almost every province requires Liability and Accident Benefits (except for Newfoundland and Labrador – they only require Liability).

There are plenty of ways you can customize car insurance for your situation. Typically, you can select (or decline) certain coverages depending on your needs. Plus, you can look around for the best price and choose which company you go with! Just keep in mind that your choices could vary depending on the province you live in.

Tip: If you don’t drive a lot and have safe driving habits, usage-based insurance might be the right fit for you. Check out Sonnet Shift for more details.

Picking the right vehicle

From safety features to claims statistics, the vehicle you buy can affect the cost of your insurance. That’s why it’s important to get auto insurance quotes before you drive that new vehicle off the lot. This’ll help you know what the insurance for your car costs so you can factor that into your budget. Still in the car-buying process? We have some super handy tips for buying a car to help.

Time to shop! Finding quotes that fit your budget

Are you ready to find car insurance quotes? We’ll give you four things to look for when you shop. 

Tip: We’ll be the first to admit that insurance has a lot of confusing terms. Try using this insurance glossary to understand any unfamiliar terms. Most companies also have brokers or agents just a phone call or chat away who would be happy to explain everything.

  • Coverage. First, you’ll want to understand what’s included or not included in your policy. Some coverages are mandatory, but there are plenty of options that you can add to feel more protected. Also, keep the coverages and deductibles the same when you compare quotes.

Heads up! You might be required to add certain coverages (like physical damage coverage) to your policy if you’re leasing or financing your new ride. Double-check that you meet the contract requirements of your leasing or financing company.

  • Customer Care. You want to be with a company that cares about you for the good times and the bad times. Look at reviews on TrustPilot to learn from other customers’ experiences.
  • Claims. Understand the claims process at each company and decide what your preference is. For example, at Sonnet you can submit claims online, while other companies might need you to call.
  • Cost. Finding a budget-friendly price is important for so many people. Because who wants to pay more than they have to? But, sometimes paying a little extra for extended coverage is worth it to know you are protected. A lot of it depends on what you’re comfortable with.

Tip: There are plenty of other things to consider when you compare car insurance quotes. If you want to take a deeper dive, check out our blog on comparing auto quotes.

What information do I need to get a quote?

To get a car insurance quote, you’ll need to provide some basic information about yourself. Insurers will typically ask for your garaging address, your vehicle identification number (VIN), and driver details. Check out our guide to getting a car insurance quote.

Did you know? At Sonnet, you can easily get a quote and buy a policy online. And it only takes 5 minutes to get a precise quote!

How do companies calculate my car insurance premium?

Your car insurance price depends on many different factors. It’s completely unique to you and your situation. This means it’s vital to give correct and consistent information to ensure you receive accurate quotes. Here are some details that’ll affect your rate:

  • Your vehicle and how you use it
  • Where you live
  • Information about you (For example your age, gender, years licensed)
  • Any traffic violations or suspensions
  • Any claims or insurance policy cancellations
  • The coverage you choose

Heads up! Some insurers might not accept international driving experience. If they do accept it, you might be asked to show proof of your license and insurance from your previous country. This could help you speed up the licensing process and possibly keep your insurance costs down. 

What happens after I purchase my car insurance?

Once you’ve got a quote that you’re happy with, it’s time to buy your policy! Here are a few things that’ll happen when you get your policy set up.

  • Payments. You might be able to choose between monthly payments or one lump-sum payment each year. Be sure to check with your insurer to see what payment plans you’re eligible for.
  • Pink slips. A pink slip is proof that you’ve got insurance. You’ll receive a little card in the mail to put in your vehicle. Some insurers even have an online version that you can save to your smartphone. You must keep a copy of your pink slip in your vehicle in case you get pulled over or are in an accident.
  • Policy documents. All your car insurance policy details will be mailed or emailed to you. (Psst! At Sonnet you can download your documents directly from your account.) Definitely look everything over to make sure all your coverages are there. Store it in a safe place in case you need to check it later.

Heads up! Your insurance company will re-evaluate you every year at renewal to determine if you’re still eligible for insurance with them. If you are, your premium could change based on inflation, changes in your situation (like if you’ve had an accident), and more. Make sure all your information is up to date to get an accurate price.

Well, those are the basics of car insurance in Canada for newcomers (and other Canadians, too!). If it still feels overwhelming, we’re here to help! Contact us and we’ll be happy to guide you through the process and answer any questions you’ve got. As a newcomer to Canada, we hope you feel welcomed as you make your new home here.

Coverage your car’s always wanted at a competitive price. 1. Immigration, Refugees and Citizenship Canada