Auto Insurance in Canada: How Is It Different From the US?

Canada, our great neighbor to the North, is visited millions of times by Americans every year. Many of them drive into Canada with their cars… but don’t think much about their auto insurance as they cross the border. And maybe they should, because insurance requirements can be very different in Canada, depending on the situation.

Here’s the most basic difference: under Canadian law, you have to have car insurance. You might be wondering how that’s different from America: the short answer is that not every state actually requires car insurance. New Hampshire, for example, will allow you to get on the road by posting a cash bond with the state. But there are other differences as well, including…

Minimum Requirements
Each state in the U.S. has different minimums to cover bodily injury and property damage. This never comes up when you’re driving from state to state due to what’s called the Comity Clause in the U.S. Constitution: states aren’t allowed to discriminate against residents of other states. Canada, obviously, has an entirely different set of laws. And, just like the US, each province has different requirements.

The basic rule, though, is that any motorist on the road needs to have $200,000 minimum in insurance coverage, which can be a pretty sharp contrast to U.S. coverage. Quebec, in theory, only requires $50,000 but that minimum doesn’t include bodily injury. States rarely require more than $100,000 in total minimum coverage, although many drivers choose to be covered for more, so you may have to bump up your coverage or buy a special policy during your time in Canada.

Out-of-Country Coverage
Of course, all this may be a moot point. Your insurance may not apply to you once you leave the country, depending on your policy. How do you know? You’ll be required to apply for a yellow non-resident proof of insurance card. Without this card, you cannot drive in Canada… and it won’t be issued if your policy doesn’t meet the minimums of Canadian law.

Fault or No Fault?
Other insurance issues will kick in if you get into an accident in Canada, and you might, since Canadians drive very differently from Americans. First of all, in the province of Ontario, if you get in an accident and you’re not at fault, you can sue the other driver involved for costs relating to injury or economic distress stemming from the accident. But in Manitoba, Saskatchewan, and Quebec, they have “no-fault” systems… meaning you might not be able to sue. Fortunately, if you have international coverage on your policy, you won’t have to worry about it not paying out.

The Rules of the Road
The most important thing to understand, though, is that you’re in another country. The rules of the road and accepted etiquette are just different enough that you need to take a little time to familiarize yourself with them. For example, it’s recommended that you be extra careful at green lights in Canada because people blowing through red lights is a bit more common than it is in the US. There are quirks in the local laws, too: while you’re on the island of Montreal, for example, you can’t hang a right on a red light. Getting used to kilometers may also take you a little while: speed limits are lower in Canada.

Really, the key rule is: when in Canada, drive as the Canadians do. Well, maybe a little more carefully. But if you’re a polite guest up North, you’ll find they’re a wonderful host.

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