About Joint Private and Public Auto Insurance
This is a unique two-level insurance system where you only have one insurance policy but are covered both by the private company you received the auto insurance policy from and the government.
History
Before 1978 in Quebec, to receive any compensation from an accident, you had to sue the individual responsible for the accident and that individual’s insurance policy would pay out the result of the litigation. Long litigation processes meant individual policies holders received little to no compensation but the legal fees generated 50% of revenue for the insurance firms. The frustration and costs of the auto insurance system lead to the creation of the Quebec Auto Insurance plan.
Pros:
- Lowest Premiums in Canada
- Opportunity for gains from competition within the industry
Cons
- Room for a corporate lobby to influence auto insurance regulation
Joint Private and Public Auto Insurance by Province
A system as unique as Quebec. SAAQ (Societe d’assurance automobile du Quebec) is Quebec’s crown corporation founded in 1978 which provides the Quebec Automobile Insurance plan. The Quebec Automobile Insurance plan is no-fault, therefore no one can initiate legal proceedings against someone responsible for a traffic accident. Everyone is covered by the plan, whether or not an individual is at fault. The Quebec Automobile Insurance plan covers bodily injury to any party injured in an accident. The SAAQ collects premiums for the Quebec Automobile Insurance plan through yearly payments of all driver license holders, and yearly registration of vehicles. As an example, it is currently free to renew your vehicle’s registration in Ontario and you pay $90 every five years to renew your driver’s license. In Quebec however it costs over $200 a year to renew your vehicle’s registration and $120 a year to renew a drivers license. Auto drivers in Quebec still require party liability or ‘civil’ liability which covers property damage. This is purchased through private auto insurance companies.