In Canada, auto insurance is mandatory. Each province and territory has its own requirements. Since I live in British-Columbia, I will provide information about how it works in this province.

In British-Columbia, there are no private auto insurance providers. Auto insurance is administered by ICBC, a crown corporation run by the Provincial Government. It usually is quite a shock when newcomers to BC find out there is no such thing as “shopping for auto insurance” and “compare quotes”.

Insurance is bought and renewed through an ICBC Autoplan broker. All dealerships have a broker so you don’t leave with your new car uninsured. This is not necessarily the case in other provinces.

ICBC mandates basic coverage. It includes:

• Third-party liability up to $ 200 000: if you are found at fault in a crash, both driver and passengers of the other vehicle can sue you for their medical treatment costs, as well as lost wages and an array of other items.
• Autoplan accident benefits: If you are injured in an accident, ICBC will pay for some of your medical expenses and lost wages, even if you are at fault.
• Underinsured motorist protection, up to $1 million: if a driver involved in a crash is not insured or underinsured.
• Hit & run up to $ 200 000: this coverage is available to all residents of BC, even if you don’t have a vehicle
• Inverse liability protection: certain parts of Canada do not allow you to sue another driver in case of a crash. ICBC will cover your costs if you are involved in an accident outside of the province.

And that’s it!

Did you notice some items are missing such as collision? You are right, this is not included in the basic ICBC coverage. Got a crack on your windshield? Not included either!

Most British-Colombians elect to purchase the following extra coverage:

• Collision: repairs to your car in case of accident, even when at-fault. This also comes with a deductible. In BC, you only pay for the deductible if you are at-fault.
• Comprehensive: this covers you in case of a crack in your windshield or if you hit an animal or hail damages. There is also a deductible for this.
• Extended third-party liability: in case of a lawsuit, 200K may not be enough, depending on the nature of the injuries, the type of income and the number of people suing you. Lawsuits are pretty much the norm. You can purchase coverage for up to $ 5 millions.

You can find all the optional coverage products here.

In terms of costs, it also expensive. It is very common to pay $ 120.00/month with a very good driving record and reasonable coverage. A lot of items impact your premiums such as the usage of the vehicle and the type of vehicle. The fact that ICBC has monopoly doesn’t help either.

That being said, the driving factor – no pun intended!- behind the high cost of auto insurance is injury claims and lawsuits. These are extremely expensive.