Why is auto insurance so high in Canada compared to the US?

My friend pays USD300 over six months for insurance on his three year old Toyota Camry. That comes to US$50 a month.

I pay CA$200 per month for a 4 year old Toyota Matrix in Canada.

The two countries are not too far apart on the economic scale. I do realize that taxes in Canada are higher, and generally things cost a little more than in the US. But a difference of 150 dollars a month? A month?!?!? :mad:

At current conversion rates, it’s more like $132 difference. :wink:

There are a lot more factors than just the vehicle itself though. Age, gender, driving record, zip/postal code, in some areas credit rating, the actual coverage you have and numerous other items go into calculating your premium. Those are items used in the US. Canada may or may not use similar methods. Of course it’s always possible that Canada does have higher rates overall, but the info you’ve provided doesn’t demonstrate that.

A more useful comparison would be to get a quote as if you were in your friends same situation. What would a quote in the same location as your friend run you for the same coverage?

Don’t have a why for you, but province to province Insurance rates vary dramatically. Ontario seems (purely anecdotal when discussing with friends from Alberta, Sask, NFLD, Nova Scotia) to have a rather high one. In some provinces car insurance is a public thing and seems to be a lot cheaper when this is the case.

Where does your friend live? Insurance rates vary and your friend’s seems uncommonly low. When I lived on a horse farm in the middle of Nowheresville, VA, and drove a 10 year old car, my insurance was higher than that. In fact, I know my father’s insurance on his first car, in New York City in 1965 was higher than that.

But look at how much you save over him on health insurance!

The rates might be different if the coverages are different. Personally, I’d balk at paying $50 a month. I pay about a quarter of that ($13), but I’m also quite the cheapskate.

All other factors are virtually the same. The person I am talking about is an immigrant to Canada just like me. A couple of years younger at 48. My driving record is longer than his. I have made no claims. He did on at fault collision when he was in Canada. Currently he is in Georgia. But can there be so much difference between states. I am talking about a difference of 400%!!

Yes I am in Ontario. But still the difference is too big to explain.
As I understand, insurance is primarily to cover a third party’s loss in case of an accident. Next is the coverage required for any losses suffered by self. The contribution for the latter is affected by the deductible. But as I said, the third party liability seems to be the major reason why taking out an insurance is mandatory.

Is the third party coverage in the US smaller? I can’t imagine that an accident victim in the US will get any less settlement than his counterpart in Canada. On the contrary, health being a Federal issue in Canada, the insurance companies here are likely to spend less towards medical expenses for the third party!

There has to be some other explanation. Could it be a legit scam being perpetrated by the insurance companied in collusion with the provincial and federal governments of Canada?

Coverage is the same. $1,000,000 third party liability mainly. I do not want anything else either. I am a safe driver and willing to take the risk of handling my injuries and repairing my car in case of an accident.

So far as I know, in at least several provinces (possibly all?) collision coverage is mandatory, so auto insurance in Canada is not typically just third party liability insurance.

That said, I only pay $60/mo, but then I live in Saskatchewan too.

It really is Ontario, not Canada, that’s the problem! I can’t speak for the US, but I have an 11 year old Toyota Tercel, 250K+ km, me (26 and married to a 26 year old) as the primary driver and my husband as an occasional driver.

Last year, minimum liability only, I paid 1440$/year.

I moved the car to Québec, and I now pay 270$/year for the exact same coverage, same provider, etc.

Insurance is handled differently by the government, and in a way, we pay a medical insurance through our driver’s licensing and car registration payments. IIRC, I pay 85$/year for my license plates and 255$/2 years for my driver’s license (or is that the other way around? I can never remember). Ontario came out to about 90$/year for both, I think.

Also, I’m pretty sure you pay a lot more if you are in the GTA/Golden Horseshoe, and if you drive more than 50km to work, and use the 400-series highways, etc compared to someone living in a more rural area of Ontario.

Across the border here in AMERICA we have this thing called no-fault. Okay, okay, here in Michigan at any rate. Our third party coverage is for things such as property damage. Other than that, it’s up to you to insure your own vehicle against what others may do to it. Sure, there’s a little collision liability coverage that we if I hit you on the QEW my insurance will pay for your damages to your non-Michigan vehicle, but for the most part, you’re responsible for your own.

I regard my insurance as cheap, about $900 per year with a tiny little deductible and all of the bells, whistles, and riders I can think of. My coworker in Hamilton, though, would constantly bitch about his $300 premium (monthly), and he offered no solution as to why it would be so high. He’s an older, mature, married guy with a clean record and no accident history. Professionally employed with insurance bennies beyond OHIP. It was an older, beater car that’s nowhere to be found on top-stolen lists. I just chalked it up as part of the price of living in a nanny state :stuck_out_tongue: .

Seriously, though, what’s the incidence of uninsured motorists in Ontario? Might that have something to do with it?

Oh, if you sell me your car for a buck, I’ll let you register it and insure in Michigan. (Just kidding, mods.)

You pay $85 for every five years for a driver’s license in Ontario.

I live in Ontario. I pay $90 a month for a Hyundai Sante Fe, which is essentially about the same value, for two drivers. You maybe are getting a shitty deal.

Alberta really gouges as well, especially for under-25s. I know that if I took my car from Saskatchewan and licensed it in Alberta I would likely pay around $1000 more. Then again, Saskatchewan has rock bottom insurance costs. Although I do explain away Alberta’s cost to a combination of a higher cost of living and the choice to have higher insurance rates. The next time I talk to my mother I’ll nag her about this because she works for the Sask. branch of the AAA/CAA.

Another anecdotal data point: In Ontario, I pay $1280 a year for a 2003 Acura 3.2 TL Type S and my home insurance – I don’t know off-hand how the breakdown works out between the two.

I second the notion that you might be getting a shitty deal. I pay $135 a month for a 2003 Jetta TDI. In the past 3 years I have been in 1 accident (not my fault, a big rig hit me) and had a running a red light ticket.

Ontario also has no-fault insurance.

If I was you I would look around, maybe consider getting a broker.

What year is the model? Can I have the name of your insurance company please? Or is that not allowed around here?

It’s a 2005, so it’s not old. My insurance is with Traders General. I even have $2 million in business liability.

I have no business or personal relationship whatsoever with Traders or anyone who works for them except that I have my car and home insurance with them.

Well I’m in the US and my car insurance is over $300 a month… I guess being male, under 25, and having 2 accidents on my record is quite the deal breaker…

Oh, let me tell you, I HATE Alberta insurance as a younger driver. I moved from B.C., where I was paying about $90 a month (for an older car, but still), to Alberta, where as a 24 year old with 8 years of driving, no accidents, no tickets, I am paying $250/month for a 2004 VW Golf. Simply because of my age. Disgusting.

Question: Did you bring your BC driver’s abstract with you to show your Alberta insurer? I ask because you’re not the first non-Albertan of my acquaintance to complain about Alberta car insurance costs. Without fail, all who have complained did not bring a driver’s abstract issued by their home province to Alberta. So I was wondering if you brought one or not.

One of the best pieces of advice I got from my broker when moving from Ontario to Alberta was to bring a copy of my driver’s abstract, which I got from an Ontario Ministry of Transport office. A driver’s abstract officially informs the Alberta insurer how long you’ve been licensed, how many tickets/accidents you’ve had (if any) and so on. According to my broker, insurers will believe such a government document, but they won’t necessarily believe you. If they do not get confirmation via this document that you indeed have nothing on your record (and insurers won’t get this document for you; it’s up to you to get it for them), you start all over again, as if you were newly licensed, with correspondingly high rates. So I understand from both my old Ontario broker and my new Alberta broker, anyway.