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The Differences Between Canadian and U.S. Car Insurance

Aug 3, 2008
All car insurance is the same, right? Wrong. Anyone from the United States moving to Canada or moving from Canada to the United States will find that car insurance in both countries is different. It may be hard to fathom how there can be variations in car insurance since there seems to be enough stipulations with car insurance the way it is but, being that the two countries are different, there are differences to be aware of.

Canadian car insurance basics

Let's say you're a U.S. Citizen moving to Canada. You know that in the United States you have an insurance card. In Canada, you do receive something similar that goes by a different name. It is called your Canadian Inter-Province Motor Vehicle Liability Insurance Card, or your "pink card" As far as how you use the card and carry it, it works the same in both countries, such as for showing proof of insurance upon request and using it in case of an accident.

However, the way injury claims are handled can vary based on the province. A good example of this is the fact that Quebec requires that injury claims are taken care of by a government program, rather than a private insurer. If the accident or the injury due to an accident takes place outside of Quebec, then that is when the private insurer takes care of the claim.

The Canadian government requires that private insurers within the territories and provinces have a standard set of terms and conditions available with the policy. This means that all terms and conditions will be consistent between all of the insurance companies. After this point, the provincial and territorial governments then set additional standards and what they decide to be the lowest limits available for liability coverage on the vehicle.

Another difference you will find between U.S. car insurance and Canadian car insurance is that Canadians do not receive printed policies when the insured is covered under a government insurer. The vehicle registration is actually proof of that insurance since the registration to the car cannot be drawn up without some kind of insurance being placed upon the vehicle.

U.S. Car Insurance Basics

Where Canada requires drivers to be insured by either a private insurer or a government insurer, the United States is chalk full of private insurers that are regulated by their respective states. It is required in most states than an individual carry at least some degree of liability insurance. Liability covers bodily injury liability. Many individuals who do not have liens on their vehicles will carry liability insurance because it is more cost effective than full coverage.

Full coverage is required when there is a lien on the car. This usually means that the car is owned by a bank, such as when a person has acquired the car through financing and has not yet paid the car off.

Something else in the U.S. that is different than in Canada is that the Canadian Provinces of Manitoba, Quebec, and Saskatchewan do not allow an individual to sue for pain and suffering when a motor vehicle accident has occurred. The only way to do this is if any permanent disfigurement has occurred, severe disability, very severe mental or psychological damage, or death.

Similarities

Nevertheless, there are similarities between the insurance of both countries and that is the fact that there are many different deductibles and price ranges available. That means each person has their own policy that they carry that can be different than everyone else's in terms of the rate, the deductible, and the coverage. Most importantly, both of these car insurance systems work to ensure the insured are taken care of.
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