Auto insurance is required to drive in every province, and the rules differ by province. This guide covers the general picture. In some provinces part of the cover is provided through a public insurer, so check what applies where you live.
What a policy usually includes
- Third-party liability. Pays if you are at fault for injury or property damage to others. It is required, and many people choose limits higher than the legal minimum.
- Accident benefits. Covers medical care and some income loss for you and your passengers after a collision, regardless of fault, with the details set by your province.
- Direct compensation or property damage. Pays for damage to your vehicle in many at-fault situations, depending on the province.
- Uninsured motorist cover. Protects you if you are hit by someone with no insurance.
- Optional cover. Collision pays to repair your car after a crash. Comprehensive covers theft, vandalism, fire and falling objects. Both usually have a deductible you choose.
A note on Ontario
In Ontario the law requires four coverages: third-party liability (with a legal minimum), statutory accident benefits, direct compensation – property damage and uninsured automobile coverage. Since July 1, 2026, only medical, rehabilitation and attendant care benefits remain mandatory within accident benefits. The other accident benefits are optional. See our articles on both topics.
What affects the premium
Your driving record and claims history, years of experience, the vehicle, where you live, how far and for what purpose you drive, the cover and deductibles you choose, and in many places, your age. Different insurers weigh these differently, which is why quoted prices vary for the same driver.
Questions to ask an advisor
- Which parts of this are required, and which are my choice?
- What are my liability limits, and are they enough for my situation?
- What deductibles apply, and how do they change the premium?
- Are there discounts I may qualify for, such as winter tires, bundling or usage-based programs?
- What happens to my premium after a claim?
Common mistakes
- Choosing the lowest liability limit without thinking about a serious accident.
- Not telling the insurer about a change in use, such as starting to drive for work, or a new driver in the household.
- Letting a policy lapse. A gap in coverage can raise your premium later.