About Private Auto Insurance
Every private auto insurance market in Canada runs in a very similar way. There is some level of mandatory auto insurance, however the government limits the profitability of the industry to attempt to balance the legal requirement to purchase insurance. The limits can come in return on equity (ROE) or underwriting profit as a percentage of premiums. Private auto insurance providers are required by law to apply to a regulator to increase rates in order to hold them to the profitability limits.
Pros:
- Opportunity for industry to improve and lower premiums through competition
- Choice of insurance provider
Cons
- Generally higher premiums
- Room for a corporate lobby to influence auto insurance regulation
- Less transparency from your private insurance providers than would expect from a crown corporation
Private Auto Insurance by Province
Ontario is the largest private auto insurance market in Canada, accounting for 40% of all premiums collected for auto insurance in the country. Currently, the average premium in Ontario is the highest in Canada. Many national auto insurance companies are based in Ontario, mostly in Toronto or Waterloo.
Alberta
Auto insurance in Alberta is regulated by the Auto Insurance Rate Board (AIRB). Currently their is a year long rate freeze for insurance for Private Passenger Vehicles (PPV).
Newfoundland and Labrador
While officially auto insurance regulation in Newfoundland and Labrador falls under the supervision of the Office of the Superintendent of Insurance, rate changes are monitored by the Newfoundland and Labrador Board of Commissioners of Public Utilities. The province has the highest average premium on the east coast in 2022.
Nova Scotia
The Nova Scotia Utility and Review board approves the rate changes for auto insurance premiums in the province. Nova Scotia has a relatively unique insurance policy requirement of wage replacement in the event of an accident where time off work is required.
New Brunswick
The New Brunswick Insurance Board was established in 2004 to approve and monitor premium rate changes in the province.
Prince Edward Island
PEI has the lowest average premium of all provinces and territories with private auto insurance at $931 in 2022. PEI has a Direct Compensation Property Damage (DCPD) Model introduced in 2015. This model of insurance means that an individual only ever deals with their own insurance provider regardless of fault. DCPD covers the portion you are deemed at fault.
Northwest Territories
The Northwest Territories Office of the Superintendent of Insurance both provides licenses to those providing auto insurance in the territory and approves premium rate changes.
Nunavut
From 1999 to 2013, administration for auto insurance regulations in Nunavut was actually done by the Northwest Territories. Since 2013, Nunavut has taken back the responsibility. All rate changes are processed directly though Nunavut’s Office of the Superintendent of Insurance.
Yukon
The Yukon Office of the Superintendent of Insurance both provides licenses to those providing auto insurance in the territory and approves premium rate changes.