Public vs private car insurance differs across Canada

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No matter where you live in Canada, you’ll need car insurance if you plan to drive because this coverage is required by law. But that one detail is the only thing that’s consistent across the country. Each provincial and territorial government regulates its automobile insurance industry. This can result in some surprising differences, including where you buy your insurance. In some cases you’ll buy it from a government organization, and in others, private companies will compete for your business.

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Whether you’re a new arrival to Canada, arranging car insurance for the first time, or just unsure of your options, it’s helpful to understand how car insurance works in your province or territory. Here’s a look at public versus private auto insurance and how it works across Canada.

What is the difference between public and private car insurance?

Public car insurance is a product that’s supplied by an agency that is government owned and operated. The benefit of a public system is that the cost to buy the minimum mandatory coverage tends to be lower. The downside is there’s no competition, which means you may not be able to shop around for better rates or seek a discount if you’re a good driver.

Private car insurance is sold by companies that operate for profit. An advantage of a private insurance system is that there are multiple insurers competing for your business, which means you can shop around for rates and ask for discounts if you have a good driving record. However, because for-profit companies will try to avoid risk, motorists with a bad driving record—or those with no record at all in Canada—are likely to pay more to be insured.

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What provinces have public car insurance?

In Canada, British Columbia, Saskatchewan, Manitoba, and Quebec operate either fully or partially under a public car insurance system.

In Manitoba, all insurance is delivered through the public system. In B.C. and Saskatchewan, basic coverage must be purchased from the public insurer, but optional coverage is available either from the provincial public insurer or from private insurers. In Quebec, some mandatory coverage is provided under the public system while additional mandatory coverage must be purchased from a private company. More details on each of these jurisdictions is provided below.

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At-fault vs no-fault insurance

When it comes to insurance, the terms at-fault and no-fault are often mistakenly considered to mean whether you can be held financially responsible for damages in a motor vehicle incident. In fact, these terms define how damages are paid out following a claim. Under an at-fault insurance system, the insurer for the person deemed to have caused the incident pays out for all of the related damages. In a no-fault system, each party is paid out by their own insurer no matter who is deemed responsible.

Under this definition, every Canadian province and territory is considered to operate under a no-fault system. However, being in a province with a no-fault system does not mean you won’t have the finger pointed at you if you cause damages. In some provinces, being at fault might mean you need to pay a deductible that would otherwise be waived, or it might mean other motorists can sue you for additional damages beyond what the insurance companies will pay. Additionally, a no-fault insurance system will not absolve you of blame or legal recourse if you do something illegal such as driving while intoxicated or without a driver’s licence—or mandatory insurance.

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Which provinces use public insurance in Canada?

Below, you’ll find a list of the provinces and territories in Canada explaining whether they use public or private insurance systems and what mandatory coverages are required in each jurisdiction.

Here are some of the terms you’ll find below and what they mean:

• A premium is the payment you’ll make for your insurance coverage. Your premium may be payable monthly or annually, depending on your agreement with your insurance provider.
• Comprehensive coverage is for non-collision damage such as theft and vandalism, natural disasters, animal impacts, adverse weather, and other similar situations.
• Third-party coverage insures you against claims others make against you.
• The deductible is a one-time payment you’ll make to your insurance company when you submit a claim. Deductibles are a standard practice across the auto insurance industry.

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Remember, the precise coverage offered by each type of insurance changes by the individual province/territory and insurance provider. Be sure to compare the coverage being offered when shopping between private insurance companies, and make sure you know exactly what you’ll be covered for before you sign on the dotted line.

Does British Columbia use public car insurance?

The province of British Columbia operates under a public car insurance system. Basic insurance is mandatory and must be purchased through the Insurance Corporation of British Columbia, or ICBC. Insurance provided by ICBC is known as Autoplan. Basic Autoplan coverage includes no-limit medical treatment, limited income replacement benefits, basic no-fault vehicle damage coverage, underinsured motorist protection, and third-party liability coverage. Optional coverage available through Autoplan includes at-fault collision coverage, comprehensive coverage, and more. You are required to buy the mandatory insurance coverage through ICBC, but you can purchase additional coverage either through ICBC or a private insurer.

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B.C. car insurance is a no-fault system. This means all parties can make claims to be paid out through Autoplan.

Does Alberta use private car insurance?

All automobile insurance in the province of Alberta is administered by private companies. Basic automobile insurance, including direct compensation for property damage, accident benefits and third-party liability, is required by law. The province establishes a maximum amount that can be charged by insurers for basic coverage. Additional coverage such as collision and comprehensive is available through private insurers but is not required by law.

Alberta is considered a no-fault jurisdiction for auto insurance. Drivers submit insurance claims and receive payouts through their own insurer.

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Does Saskatchewan use public car insurance?

In Saskatchewan, the legally required insurance is provided by Saskatchewan Government Insurance (SGI), a public entity. Upon registering a vehicle, you’ll pay a flat fee and receive a basic insurance package, which includes coverage for vehicle damage, personal injury insurance, and liability insurance that covers injury to others or damage your vehicle causes to property or another vehicle. Additional coverage such as loss-of-use, coverage for vehicles you don’t own, accident forgiveness, higher liability limits, and more can be purchased through SGI or via private companies, which are permitted to offer extended coverage in Saskatchewan.

Saskatchewan is a no-fault jurisdiction. However, you’ll be required to pay a deductible if you’re found to be responsible for a crash, while those not responsible are not required to do so.

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Does Manitoba use public car insurance?

Manitoba Public Insurance (MPI) is the public car insurance provider and the sole source of auto insurance in Manitoba. There are no private car insurance providers that operate in Manitoba. The insurance product provided by MPI is called Autopac. The basic all perils coverage—which includes personal injury, collision and loss-of-use—and basic third-party liability insurance are mandatory. Additional insurance coverage is available exclusively through Autopac and includes rental vehicle insurance, additional third-party liability coverage, and other products.

In Manitoba, auto insurance is delivered under a no-fault system.

Does Ontario use private car insurance?

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Ontario’s auto insurance system is private, meaning insurance is supplied exclusively by for-profit companies. By law, a motorist in Ontario is required to have active coverage for third party liability, accident benefits, and damage by uninsured automobiles. Additional coverage such as collision and comprehensive can be purchased from insurance providers. Note that beginning in 2024, direct compensation for property damage will become optional for motorists in Ontario. This is being touted as a money-saving option for drivers who own low-value vehicles that may cost more to insure than they’re worth.

Insurance in Ontario is provided under a no-fault system, meaning you’ll deal with your own insurer when making claims.

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Does Quebec use public car insurance?

In Quebec, the mandatory minimum insurance coverage for bodily injury is provided through a public car insurance system, administered by the Société de l’assurance automobile du Québec (SAAQ). This coverage includes certain occupational and medical costs, income replacement, and more. The cost for this insurance is included in the fee for renewing your driver’s licence in the province.

However, the SAAQ does not offer civil liability insurance, which is also mandatory and covers your responsibility for injuries to someone else, and damage to vehicles whether someone else’s or your own. Quebec residents are therefore required to hold private automobile insurance to retain this mandatory coverage. Additional property damage coverage for situations such as natural disasters, theft, vandalism, and more is also offered by private companies.

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Quebec operates under a no-fault system for automobile insurance, meaning this coverage is equally available regardless of who caused the incident.

Does New Brunswick use private car insurance?

In New Brunswick, car insurance is sold through for-profit private companies. You’re required by law to hold third-party liability insurance, accident benefits coverage (which includes medical expenses, funeral and death benefits, and loss of income coverage), direct compensation-property damage coverage so that you’ll be paid for damages by your own insurer, and coverage that insures you in the event you’re in an incident with an uncovered or unidentifiable driver or automobile. Collision, comprehensive, and other additional coverage is optionally available from private insurers.

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Because accident benefits coverage in New Brunswick will cover you regardless of who causes damage in a crash, the province is considered a no-fault jurisdiction.

Does Nova Scotia use private car insurance?

Nova Scotia’s car insurance operates under a private system, meaning multiple for-profit companies offer competing services. Coverage for third party liability, direct compensation for property damage, accident benefits, and incidents caused by uninsured and unidentified motorists are mandatory by law in the province. Other coverage, such as insurance covering loss of or damage to your vehicle, is optional.

Nova Scotia’s auto insurance is a no-fault system, meaning your insurer pays claims out to you directly regardless of who caused the incident.

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Does Prince Edward Island use private car insurance?

Drivers in Prince Edward Island are required to hold car insurance they’ve purchased through a private insurer. Mandatory coverage in the province includes third-party liability, direct compensation for property damage, accident benefits, and uninsured automobile coverage. Additional coverage is also optionally available.

PEI is considered a no-fault jurisdiction, meaning you’ll deal with your own insurer when making claims and recovering damages.

Does Newfoundland and Labrador use private car insurance?

Automobile insurance in Newfoundland and Labrador is sold through private insurance companies. Third party liability, direct compensation for property damage, and uninsured automobile coverage are mandatory, while accident benefits coverage, physical vehicle damage, and higher liability limits are optional but recommended.

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Drivers making claims in Newfoundland and Labrador deal directly with their own insurance companies, making Newfoundland and Labrador a no-fault jurisdiction for automobile insurance.

Does the Northwest Territories use private car insurance?

In the Northwest Territories, auto insurance coverage is provided by private companies. Third party liability, uninsured and unidentified automobile coverage, and accident benefits are required coverage in the territory, while higher limits and additional coverage are optional. The Northwest Territories operate under no-fault insurance.

Does Yukon use private car insurance?

Auto insurance is provided by for-profit private companies in Yukon. Third-party liability and accident benefits are mandatory coverage in the territory, while other insurance products are available but optional. Yukon is a no-fault jurisdiction, meaning you only need to deal with your own insurer when making claims or collecting payouts.

Does Nunavut use private car insurance?

In Nunavut, private insurers supply automobile insurance within the territory. Third party liability, accident benefits, and coverage for damage by uninsured or unidentified automobiles is required, while additional coverage is available but optional. Vehicle insurance is offered on a no-fault basis in Nunavut.