A closer look into cheap car insurance

For Canadians, cheap car insurance typically means paying a lower monthly premium. And, because driving without insurance in Canada isn't an option, even the cheapest policy still covers the legal minimums. So, whether you're driving up a mountain incline in British Columbia or cruising along Nova Scotia's coastal shores, a cheaper policy still means you'll be meeting mandatory car insurance requirements.

But while your bank account might be happy with cheaper insurance, it’s important to know that cheap car insurance often means minimum coverage that could be leaving gaps in your protection. At first glance, signing up for the cheapest car insurance you can find might seem like a good idea for your financial goals. But the reality is, the cheapest price isn’t necessarily the better option—and paying less for your car insurance in Canada may cost you more in the long run.

Before you begin shopping for a bargain car insurance rate, learning more about the legal essentials of car insurance and some common terms you might encounter can be helpful.

Legal requirements

• Car insurance. You can't legally drive a car in Canada unless it's insured. And driving without insurance can come with some hefty penalties. Which means you might be looking at not just a ticket and a large fine, but possibly a licence suspension too (not to mention, the potential stress of a large lawsuit).
• Proof of insurance. This is mandatory across all provinces: You must always carry proof of insurance when driving.

Common car insurance terms

Here are some terms you'll likely come across when shopping for car insurance in Canada:

Choosing the cheapest car insurance can be tempting, but the price tag on your premium shouldn't be your only consideration: You want to make sure you’re getting the coverage and support you need when you need it most. That's why, when you're looking for a lower-priced insurance option, it's important to consider several factors in addition to the amount of money you'll be paying. Here are some key things to take into account when making your decision:

• Review the coverage limits. While you don’t want to overpay for unnecessary extras, you also don’t want to be underinsured. Whether it’s a high deductible or inadequate optional loss or damage coverage, having insufficient coverage for your needs can potentially lead to significant out-of-pocket expenses down the road.
• Understand policy exclusions. Read that fine print. You want to be aware of what incidents, uses, or damages are excluded, to help prevent unpleasant surprises if you need to file a claim. For example, if you plan to use your vehicle to provide rideshare or taxi services, be sure to contact your insurer first, as your policy will likely exclude these activities, which could impact your coverage in the event of a claim.
• Check for additional perks. See if there are any perks you can take advantage of. For example, are there extras offered, such as added benefits for good drivers, or insurance discounts, like a discount for members of a particular employer group, profession or alumni association?
• Research the insurer. What’s the insurance company’s track record and reputation in your province? Ask people you know for their recommendations and check out insurers' online reviews at reputable review sites to see how well past customers rate them and what they say about their customer service. For example, how accessible is the insurer? Do they provide multiple contact methods and respond promptly when customers reach out to them?
• Consider the payment options. A deal might look great upfront, but not so much when you take a closer look at how payments are setup. Ask questions like: Can you pay your insurance premiums monthly or annually? What payment methods are available? Make sure the payment terms actually fit your budget and how you'd like to pay.

Let’s look at TD Insurance to see these factors in action. When you purchase car insurance with us, you’re getting more than the minimum auto insurance coverage: You’re getting coverage that fits your needs, the ability to manage your policy online, access to licensed insurance Advisors over the phone or through secure chat, and flexible payment options.

Plus, you get access to additional benefits like our Claims Free Reward and TD Insurance Auto Centres, which provide a one-stop solution for on-site claims advice, repairs, and rentals. These are all important considerations when you’re shopping around for the right insurance for your needs.

No matter where you're located in Canada or which insurers you're looking at, smart shopping can help you get the best deal possible—without cutting corners on the quality of your coverage.

Just like you wouldn’t buy the first car you see, don’t say yes to the first insurance quote you get. Compare what each insurer offers for the price—and to make a fair comparison, be sure the quotes are for the same type of coverage. For example, a quote that includes optional insurance such as collision or comprehensive coverage will be more expensive than one that provides only the mandatory minimum.

If you’re comfortable paying more out of pocket if an accident happens, consider increasing your deductible. With many insurance providers, a higher deductible often means a lower premium.

Do you have homeowners or tenant insurance? See if you can save by getting your auto insurance from the same insurance provider. Often, the more policies you have with the same insurer, the more you save.

Ask insurers if there's anything you can do that will help reduce your premiums. Whether it’s a lower rate for being claims-free or having a clean driving record, alumni discounts, or a discount for insuring multiple cars with the same insurer, it never hurts to see what might be available. With TD Insurance, for example, there are over 30 ways to save on your home and car insurance.

Coverage needs can change from year to year. Maybe you’re driving less these days so you’re not racking up the mileage you used to. Or perhaps your oldest just moved out and now has their own home and car (and collision insurance for that car!). Reviewing your policy yearly can lead to coverage adjustments that help keep your costs down.

Getting your licence is an unforgettable milestone, and one well worth celebrating. Now is not the time to let the costs of car insurance for new drivers dampen your excitement. Here’s a rundown of tips that can help you keep your premiums as low as possible, without skimping on your coverage:

• Take a driver’s training course. Many insurers offer a discount if you’ve completed a driving education course. Not only do these courses improve your skills and help reduce the risk of an accident, having a completed course under your belt shows insurers you’re serious about being a safe driver.
• Save with safe driving. If your insurance company offers one, consider enrolling in a program like the TD MyAdvantage program, which is offered to TD customers in Quebec and Ontario. These kinds of usage-based insurance programs reward you with discounts based on safe driving—a potential win-win situation, as it will also give you a financial incentive to practice safe driving behaviours too.
• Choose your vehicle carefully. The type of car you drive can have a big impact on your car insurance costs. Choosing a car with a strong safety record and low repair costs may lead to more affordable premiums.
• Regularly review your policy. Just like more experienced drivers, as a new driver, your driving circumstances and needs can change. By reviewing your policy on a regular basis, you may be able to adjust your coverage for added savings as you gain experience and confidence.

Ready to get started? Get a car insurance quote today today. And be sure to check out more ways to save on your car insurance.