Auto Insurance 101: What You Need to Know


As a licensed driver and vehicle owner in Canada you must have auto insurance in order to legally drive. Whether you’re a driver who commutes daily to work, is learning to drive or enjoys Sunday rides in the country, it’s important to understand your insurance coverage to ensure you have the right coverage for your needs.

Here’s how it works:

You need it

Required in all provinces and territories in Canada, auto insurance is a must for all licensed drivers. Serving as a kind of social contract, mandatory auto insurance ensures every party is covered in the event of an accident, regardless of one’s financial situation or who is at fault. Although the punishments for driving without auto insurance vary from province to province, the fines are costly and doing so can result in a license suspension or vehicle impoundment.

Your rate comes down to a formula

Called ‘premiums,’ auto insurance payments are based on a variety of factors. While car-specific things, such as the make and model of your vehicle, play a part in calculating your premium, information on the driver, such as driving history and place of residence, is also taken into consideration. This information is combined to determine how high your risk level is for insuring your car and yourself.

Note: car colour does not affect an auto insurance premium calculation.

Not everything is mandatory

Although auto insurance coverage varies from province to province, there are add-ons to consider when shopping for auto insurance. These add-ons are not mandatory, but, if you live in a high-risk area, such as a city, they might be worth looking into. Talk to your Broker to see what is right for your situation.


Every auto insurance plan carries a deductible. This additional amount is attached to your plan and must be paid out before coverage begins in the event of an accident. If you have a $400 deductible, for example, and are at fault in an accident resulting in $1,000 damage, you must pay $400 before your insurance covers the remaining $600.

As a general rule, the higher the deductible, the lower the insurance premium. But the lower the deductible, the less money you have to pay in the event of an accident.


At PC® auto insurance, you can waive a three per cent service charge if you pay your entire premium up-front, as opposed to making monthly payments.

If you make your PC® auto insurance premium payments using your PC Financial® MasterCard®, you will earn 20 PC Optimum points for every dollar paid which can be redeemed for Free Rewards at participating grocery stores where President’s Choice® products are sold.1

Get to Know Yourself

If anyone knows your situation best, it’s you. Before choosing an auto insurance plan, think about your driving habits, where you live, your finances and anyone else who may be driving your car (especially anyteenagers). The more information you can provide to a broker the better equipped they will be to help you make sure you have the coverage you need. Also make sure you ask about discounts. Simple things like combining your home and auto insurance with the same insurance company can really help you save.2

To learn about your auto insurance options, contact a PC® broker at 1-866-660-9035 or get a quote online.

How to make a claim

Call 1-877-251-8656 to speak with a Claims Advisor.

Renewing your policy

Call 1-877-251-8652 for information regarding policy renewal.

Buying a new policy

Call 1-866-660-9035 for information on obtaining a quote.

Need help?

Take a look at the top 5 FAQs:

  • What are my choices in terms of auto coverage?

    What are my choices in terms of auto coverage?

    If you own or drive a vehicle in Canada, you must be insured. Different provinces have different requirements, but the four mandatory elements of auto insurance are:

    1. Liability - if you cause an accident and someone sues you
    2. Accident benefits - if you or someone in your vehicle is hurt in an accident
    3. Direct compensation – property damage (Ontario only)- if your vehicle gets damaged (and it's determined you're not at-fault or only partly at-fault)
    4. Uninsured motorist - if you're in an accident with an uninsured or hit-and-run driver
  • How do I reduce my insurance costs?

    How do I reduce my insurance costs?

    There are several things you can do to reduce your insurance premium costs:

    1. Work on your driving record
      Here's an easy, yet effective way to bring down your insurance costs: build a consistent accident and conviction-free track record with an insurance company.
    2. Choose your automobile wisely
      Do your research before you invest in a new car. Read consumer reports, and check with your insurance company to find out which cars tend to be targets for theft and vandalism. Remember, if you buy a car with a high theft rate, your premium will be higher.
    3. Adjust how you use your car
      By adjusting the way you use your vehicle, you can also bring down the cost of your insurance rates. If you live in a metropolitan area:
      • can you take the subway, train or bus to work?
      • has your job changed, or have you moved recently?
      • do you use your automobile to drive a short distance to work?
      • does your vehicle get used for low annual kilometers?
        If you answered yes to any of these questions, you may be entitled to lower insurance costs. Another consideration is whether you let others use your car. It is sometimes possible to exclude certain high-risk drivers from your policy so that good drivers are not penalized with a higher premium.
    4. Choose a higher deductible
      If you choose a higher deductible up front, your premiums will be lower.
    5. Review your coverage
      Take a closer look at your coverage to make sure you're not paying for things you don't need.
  • How can I earn PC Optimum points?

    How can I earn PC Optimum points?

    When you use your President's Choice Financial Mastercard to pay your PC auto insurance premium, you'll get 20 PC Optimum points per dollar of your premium.

  • Are other drivers insured to drive my car?

    Are other drivers insured to drive my car?

    Yes, as long as he/she has your permission to drive the vehicle, has a valid driver's licence and has not been specifically excluded from driving the vehicle. However, all licensed drivers in your household must be listed on your policy—regardless of how often they use your vehicle.

  • What is a deductible?

    What is a deductible?

    A deductible is the amount that you agree to pay towards the repair or replacement of your vehicle before your insurance pays the rest. You choose your deductible amount when you purchase your auto insurance. The higher your deductible, the lower your premium.

See all Auto Insurance FAQs


We're cooking up something great!

As you explore our website, you’ll notice some pages look a little different than others. That’s because we’re in the process of redesigning our entire site.

All the information you need is still available. Watch out for more exciting changes coming soon!


Nous vous concoctons un petit quelque chose!

Lorsque vous naviguez sur notre site, vous remarquerez que l’apparence des pages varie parfois. Cela est dû à la cure de rajeunissement que subit présentement tout notre site Web.

Tous les renseignements dont vous avez besoin s’y trouvent toujours. D’autres changements excitants suivront bientôt!