Welcome to Canada! We’re a nation proud of our diversity, built and enriched by people who come here from all over the globe. If you’re one of the many newcomers arriving as an immigrant, refugee or international student, we’re happy you’re here.

As you get settled, you’ll have a lot of things to figure out and, if you plan on driving, car insurance is one of them. Don’t worry, we’re here to make the process as smooth as possible. Keep reading to learn everything you need to know.

Is car insurance required for newcomers in Canada?

Yes, it is. Let’s get this one settled right away: Car insurance is mandatory across all of Canada if you own a vehicle. Whether it’s a small car for your commute or a minivan for the family, you’ll need to have a basic policy. Almost every province requires Liability and Accident Benefits coverage. The only exception is Newfoundland and Labrador, which only requires Liability.

While the basic requirement is non-negotiable, you have plenty of ways to customize your car insurance. You can select or decline certain optional coverages to fit your needs and budget. It’s always a good idea to shop around to find the best price and provider for you, but remember that your options can 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.

Is a foreign driver’s license valid in Canada?

This is a common question, and the answer depends on a few factors. For a short period, you can usually drive in Canada with a valid license from your home country. If you’re a visitor, this is often all you need. However, if you’re moving here permanently, getting a Canadian driver’s license will be a requirement.

The rules for exchanging a foreign license for a Canadian one vary by province. Canada has reciprocal agreements with many countries (including the U.S. and Australia as well as many countries in Europe) that make it easy to swap your license. If your country isn’t on the list, you may need to pass a knowledge and road test to become licensed. It’s best to check with your new home province's or territory's Ministry of Transportation for specific rules.

Can newcomers to Canada purchase a vehicle?

Absolutely! Once you're ready to buy a car, it’s important to know that the vehicle you buy can affect the cost of your insurance. Factors like the car’s safety rating, repair costs and even how often that model gets stolen can influence your premium.

That’s why it’s a smart move to get auto insurance quotes before you drive that new purchase off the lot. This helps you understand the full cost of ownership so you can factor it into your budget. If you're still in the car-buying process, we have some handy tips for buying a car to help you out.

How does auto insurance work for newcomers to Canada?

If you're ready to find quotes for auto insurance, it helps to know what you’re looking for. Here are four key things to consider: 

• Coverage: First, understand what’s included in your insurance policy. Beyond the mandatory coverages, there are many options you can add for more protection. When comparing quotes, make sure you’re comparing policies with the same coverages and deductibles to get an accurate comparison.
• Customer care: You’ll want an insurer that will be there for you if and when you need them! Check reviews on sites like TrustPilot to see what other customers are saying about their experience.
• Claims: Every company handles claims differently. Some, like us here at Sonnet, let you submit claims online, while others require a phone call. It’s up to you to decide which process works best for you.
• Cost: Finding an affordable price is important. While it's tempting to go with the lowest price, sometimes paying a little extra for better coverage is worth the peace of mind. It all comes down to your personal comfort level.

Tip: Insurance has a lot of lingo. If you get stuck, use this insurance glossary to understand any unfamiliar terms.

What information is required to get a car insurance quote in Canada?

To get a quote for car insurance, you’ll need to provide some basic information. Insurers will typically ask for:

• Your garaging address (where your car will be parked)
• The Vehicle Identification Number (VIN) of the car you want to insure
• Driver details for everyone who will be driving the vehicle

Some insurers may not accept international driving experience, but others do. If they do, you might be asked to provide proof of your license and insurance history from your previous country. This can be a huge help in a few ways; for example, a strong driving record could help you speed up the Canadian licensing process and potentially lower your insurance costs. Our guide to getting a car insurance quote can walk you through it.

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

How much does car insurance cost for newcomers?

The cost of car insurance varies widely because every premium is calculated based on a unique set of factors. It’s vital to give correct and consistent information to every insurer to ensure your quotes are accurate.

Here are some of the details that affect your rate:

• Your vehicle: The make, model and year of your car
• Your location: Where you live and drive
• Driver information: Your age, gender, and years of driving experience
• Driving record: Any traffic violations or suspensions
• Insurance history: Any past claims or policy cancellations
• Coverage choices: The coverages, limits, and deductibles you select

New drivers often face higher premiums because they don't have a proven insurance history in Canada. Insurers see this as a higher risk. However, there are ways to manage this cost:

How to reduce your car insurance costs as a newcomer in Canada

While car insurance for newcomers to Canada can seem expensive, there are a few ways to find more affordable rates:

• Provide your driving history: If you can, provide a letter of experience or claims history report from your previous insurer. This can prove your good driving record to insurers in Canada.
• Choose your vehicle wisely: Cars that are cheaper to repair or are stolen less often typically have lower insurance costs. (If you need an idea of which cars are stolen most often in Canada, we’ve got you covered)
• Increase your deductible: A higher deductible (the amount you pay out-of-pocket on a claim) usually leads to a lower premium. Just make sure it’s an amount you’re comfortable paying.
• Ask about discounts: Don't be shy! Ask if you qualify for any discounts, such as being a graduate of a Canadian university or through a discount program with your employer.
• Consider usage-based insurance: If you don't drive often and practice safe driving habits, a program like Sonnet Shift could be a great fit, offering rates based on how you drive.

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 found a quote you’re happy with, it’s time to buy your policy! Here’s what happens next:

• Payments: You can often choose between paying monthly or in one lump sum for the year.
• Proof of insurance: You’ll receive a liability card, often called a pink slip, in the mail or digitally. You must keep a copy in your vehicle at all times.
• Policy documents: Your full policy details will be sent to you. At Sonnet, you can download them right from your account. Be sure to review them and store them in a safe place.

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.

Get started on your newcomer car insurance with Sonnet

Navigating Canada car insurance for new immigrants can feel overwhelming, but it doesn't have to be. Sonnet offers a simple, online process where you can get a quote and buy your policy in minutes, all from the comfort of your new home. We believe in making insurance simple to understand and even more simple to purchase.

If you have any questions, we’re here to help. Contact us, and we’ll be happy to guide you through the process. Welcome to Canada and we hope you feel right at home!