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mandatory insurance
Jul 12, 2021
3 min
What is Mandatory Insurance in Canada

If you live in Canada, you must have minimum auto insurance. This is a Canadian auto insurance law that provides coverage for the owner of the vehicle, passengers, pedestrians as well as property involved in an auto accident. Insurance provisions in Canada differ by province. While some provinces provide insurance via the government, some do not while others only provide partial coverage. It is vital to differentiate mandatory insurance laws by province. This will not only help you avoid getting caught up in trouble with the lawmakers but also protect you in the event of an accident. 

Let’s dive into mandatory insurance in Canada by Province

1. Ontario

Regardless of what car you drive, where you live, your age or even your driving history, there are minimum car insurance laws as per the Financial Services Commission of Ontario. Driving without the mandatory auto insurance in Ontario will cost you fines of up to $50,000. And worse, you risk paying for damages caused in an accident (these can be insanely high) out of pocket or even get your driving license suspended. 

The minimum car insurance in Ontario include:

  • Third-party liability coverage- This provides coverage for injuries sustained by persons involved in an accident and even property damages. The Financial Services Commission of Ontario requires all drivers to have minimum third-party liability coverage of $20,000. It is even wiser to go above this minimum limit for maximum protection against such liabilities. 
  • Uninsured automobile insurance- Drivers in Ontario must maintain uninsured automobile insurance. This provides coverage for accidents involved with uninsured motorists or even hit-and-run motorists. This coverage also caters for benefits to families who lose their loved ones in an accident with hit-and-run or uninsured drivers. 
  • Statutory Accident benefits coverage- This pays for supplemental attendant care, medical care, rehabilitation as well as lost income if a person is hurt in an accident. It offers minimum provision limits on catastrophic and non-catastrophic injuries. 
  • Direct compensation- property damage insurance- This provides coverage for damages caused to your vehicle if you are involved in an accident where another driver is at fault. The other driver faulted for the accident must be insured under Ontario law. Also, the accident must have taken place in Ontario. Many Ontario drivers, however, purchase additional coverage to protect them in case an accident occurs in another province.  

2. British Columbia

All drivers in British Columbia are required to purchase minimum coverage from ICBC including:

  • Underinsured motorist protection (UMP)- This coverage protects motorists if they are involved in an accident where the driver at fault does not have sufficient insurance to cater for the medical expenses and property damage. The basic ICBC coverage protects persons involved in accidents up to $1 million. However, additional coverage can be purchased from ICBC or private auto insurance. 
  • Third-party liability insurance- Every driver in BC must have $200,000 third-party liability insurance. This protects the drivers if they are involved in an accident where another person sustains injuries or property is damaged. The maximum compensation where property damage and bodily damage reach the mandatory limit is $20,000. 
  • Medical coverage- This is set at $150,000 per person. 
  • Inverse liability coverage- This coverage provides protection where drivers are involved in an accident in parts of the US or Canada where the province or state laws prohibit drivers from recovering losses incurred from the driver at fault. 
  • Hit-and-run coverage -This offers protection in case a driver is involved in an accident with a hit-and-run motorist. Under ICBC basic plan, the maximum amount is $200,000. 

3. Saskatchewan

Saskatchewan has a mandatory insurance and vehicle registration program. This province operates on a break-even and self-sustaining basis, meaning that drivers pay less for auto insurance. 
Mandatory car insurance, also referred to as license plate insurance includes:

  • Third-party liability- With a $200,000 minimum mandatory amount, this insurance provides coverage for bodily injury and damage in an accident where you are at fault. 
  • Accident benefits coverage- This provides coverage for bodily injury if you are involved in an accident regardless of who is at fault. It caters to rehabilitation, medical care and auxiliary care services as well as income replacement. The minimum insured amount for medical payments is set at $7 million. 
  • Property damage insurance

4. Alberta

The mandatory auto insurance in Alberta include: 

  • Accident benefits insurance- Drivers are mandated to have accident benefits insurance. This caters to medical, rehabilitation and lost income costs regardless of who was at fault for an accident. 
  • Third-party liability- The minimum third party liability insurance is $200,000.

5. Manitoba

All drivers in Manitoba must have:

  • Third-party liability insurance- This provides coverage for injuries or damages to other persons and their property. 
  • Uninsured motorist insurance- This provides coverage for injuries sustained in an accident where the other driver does not have insurance. 
  • Accident benefits insurance- Provides coverage for financial help and medical costs due to an accident. 

6. Newfoundland and Labrador

Drivers in Newfoundland and Labrador must have both third-party liability insurance ($200,000) and accident benefits insurance. 

7. Quebec

All vehicle owners in Quebec must hold civil liability insurance of a minimum of $50,000. This provides coverage of property damage and personal injury. The state operates on a no-fault insurance system. 

8. Nova Scotia

This province operates on a tort liability insurance system. All drivers must have $500,000 car insurance that provides coverage for personal injury, legal pursuit and property damage. 

9. New Brunswick

The minimum car insurance in New Brunswick is $200,000 for damage caused to other parties. 

10. Northwest Territories and the Yukon

Mandatory insurance in Northwest Territories and the Yukon includes accident benefits, third-party liability ($200,000) and uninsured automobile insurance. 

11. Prince Edward Island

This province operates on a tort liability insurance system. Every driver must have a minimum coverage of $200,000 that caters to property damage as well as damage to other parties. 

12. Nunavut

Every driver in Nunavut is required to have $200,000 third-party liability insurance.


While Canada has different auto-insurance laws, most provinces have a mandatory minimum third-party liability insurance of at least $200,000. Mandatory insurance requirements must be obtained. However, for maximum protection, it is always wise to purchase add-on insurance policies such as additional third-party liability coverage, additional property damage insurance and additional statutory accident benefits. While these additional insurance policies may increase the cost of your insurance, you will be more protected in the event of the occurrence of an accident. 

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