Best Car insurance in Canada in 2025

A single minor collision in Canada can lead to repair costs exceeding $5,000, and liability claims often reach much higher. Car insurance is not only required by law in every Canadian province and territory, but it is also the only safeguard against significant personal financial loss caused by accidents, theft, or damage. Across the country, drivers face regular risks such as severe weather, wildlife collisions, and uninsured drivers, which makes having adequate coverage essential for peace of mind.

Mandatory car insurance covers basic liability, but not all policies include protection for your own car, natural disasters, or rental coverage. Limits, deductibles, and exclusions vary widely, and gaps in coverage can leave drivers exposed to major out-of-pocket expenses.

Choosing the right policy—and, most importantly, comparing different offers—can lead to substantial savings and a better fit for your needs. At HelloSafe, our independent experts assess dozens of insurance providers and plans in Canada, making it easy for you to compare coverage levels, benefits, and real customer feedback, so you can protect yourself and your finances with confidence.

How does car insurance work in Canada?

Car insurance in Canada is a legal requirement for all drivers and is regulated at the provincial level. It generally provides mandatory liability coverage to protect against damages or injuries you cause to others, and often includes accident benefits for your own injuries. Additional options like collision, comprehensive, and specified perils can be added to tailor the policy to your specific needs. Premiums and coverage may vary based on your province, driving history, and vehicle type.

A Car insurance plan in Canada ensures you comply with the law while securing your financial protection in the event of an accident or loss. You can choose from a variety of coverage formulas that fit your budget and driving habits, with flexible deductibles and reimbursement options. Many policies offer added benefits, such as coverage for rental cars, roadside assistance, and even international protection when needed. Selecting the right plan allows you to drive with confidence, knowing you are protected both at home and abroad.

What car insurance covers

Car insurance in Canada includes mandatory and optional coverage options designed to protect drivers from financial loss in case of an accident or unexpected event.

Basic car insurance, known as third-party liability coverage, is required by law and covers injury or damage you may cause to others.

Optional coverages—such as collision, comprehensive, and additional add-ons—offer financial protection for damage to your own vehicle or for specific situations like theft, vandalism, or roadside assistance.

Claim reimbursement usually covers repair or replacement costs minus any applicable deductible, and some add-ons may come with waiting periods or coverage limits.

Understanding these differences helps tailor your car insurance plan to your individual needs and budget.

What is usually not covered by car insurance?

The most common Car insurance exclusions in Canada typically include any damages caused intentionally by the driver, costs related to regular maintenance or wear and tear, and accidents that occur when driving under the influence of alcohol or drugs. Car insurance also usually does not cover personal belongings stolen from the vehicle, claims involving drivers not listed or approved on the policy, or damages that exceed the policy coverage limits. Additionally, illegal or reckless activities such as street racing, using the vehicle for commercial purposes without proper coverage, and damages occurring outside the covered geographical region may not be covered. Some policies may enforce a waiting period for certain coverages to take effect.

How much does car insurance cost in Canada?

Car insurance pricing in Canada depends on several factors. The driver’s age is important: young and very senior drivers are statistically at higher risk, leading to higher premiums. Driving history also plays a key role: recent at-fault claims or traffic violations generally cause premiums to rise because they indicate increased risk.

The type of coverage selected, such as basic liability versus full coverage, directly affects the cost—comprehensive policies are more expensive. Higher deductibles usually result in lower monthly premiums, while lower deductibles increase costs. Location matters, as urban or high-theft areas have more frequent and costly claims, so premiums are higher there compared to rural or low-risk regions.

The specific vehicle insured, especially newer, luxury, or high-performance models, can drive up the cost due to higher repair or replacement values. Annual mileage is considered; the more the vehicle is driven, the greater the risk of accident, so those driving less often might pay less.

Premiums typically increase over time due to aging, at-fault claims, accumulating tickets, opting for broader coverage, or adding a new vehicle deemed high risk.

Which is the best car insurance in Canada?

Best for everyday commuting (school/work)

For regular commuters, Intact Insurance “My Driving Discount” is a strong choice. This plan provides liability, collision, and comprehensive coverage, with optional roadside assistance. The program uses a telematics app to offer savings up to 25% for safe driving habits, making it cost-effective for daily travel.

Best for families with multiple vehicles

Aviva’s “Family Fleet” plan is well-suited for families with several cars. It combines multi-vehicle discounts (up to 20%) with flexible coverage options including liability, collision, comprehensive, and accident forgiveness. Family Fleet also allows you to bundle home and auto insurance to further reduce overall premiums.

Best for tight budgets

Sonnet Insurance “Essential” is a digital-first and budget-friendly option for cost-conscious drivers. It offers competitive basic liability coverage, with customizable options for collision and comprehensive if desired. The transparent online quote and claims process, and frequent discounts for safe driving or bundling, help keep costs down.

Best for expats or international drivers

Allstate Canada “Newcomer’s Auto Insurance” is designed for newcomers without Canadian driving history. It offers standard liability, collision, and comprehensive coverage without penalizing drivers for no local record. Flexible payment options and access to English and multilingual agents make onboarding easier for expats.

Best for senior drivers

CAA Insurance “Senior Auto Plan” caters specifically to drivers over 55. The plan includes standard coverages and enhances benefits like accident forgiveness and roadside assistance. Seniors can benefit from loyalty discounts, claims-free discounts, and 24/7 customer support, reflecting the insurer’s focus on this age group.

Best for students or young drivers

belairdirect “Young Drivers Advantage” is tailored to students and young adults. This plan provides liability and collision coverage with add-ons like distracted driving forgiveness and affordable accident forgiveness. Good grade discounts and a digital claims process reward responsible behaviour and make it well-suited to this demographic.

Best for rideshare or gig economy drivers

Intact Insurance “Ridesharing Endorsement” (Form OPCF 6A) covers drivers working for platforms like Uber or Lyft. Coverage includes third-party liability up to $2 million, accident benefits, and coverage for physical damage while logged into the app, ensuring drivers are protected during both personal and commercial use.

How to lower the cost of your car insurance?

Here are some of the most effective ways to reduce your Car insurance premiums in Canada:

• Compare offers: Use the HelloSafe comparison tool at the top of the page to quickly find the best Car insurance rates across multiple providers.
• Increase your deductible: Opting for a higher deductible can significantly lower your regular premium, but ensure you can cover this amount should you need to make a claim.
• Maintain a clean driving record: Safe driving helps you avoid surcharges and can qualify you for experienced or conviction-free driver discounts.
• Bundle your policies: Purchasing Car insurance along with home, tenant, or other insurance policies from the same provider can unlock multi-policy discounts.
• Drive a lower-risk vehicle: Choosing cars with better safety ratings, lower theft rates, or less expensive repairs can result in reduced premiums.
• Limit annual mileage: Reporting lower usage or switching to a pay-as-you-drive plan may lead to savings if you drive less than average.
• Install anti-theft and safety devices: Vehicles equipped with alarm systems, immobilizers, or other approved devices may be eligible for discounts due to decreased theft risk.
• Take an accredited driver training course: Many insurers offer savings to drivers who complete a recognized defensive driving or driver’s education program.

FAQ

Daniel Clarke

Personal finance expert

Daniel is a Canadian personal finance expert passionate about making financial literacy more accessible to everyone. He holds a degree in Economics from the University of British Columbia and a Master’s in Financial Planning from York University. Before joining HelloSafe, he worked as a financial coach and content editor for a number of fintech platforms across Canada. At HelloSafe, Daniel writes clear and practical guides on insurance, credit, savings, and budgeting—always with the goal of helping readers make confident and informed money decisions.