Car Insurance: What You Need to Know


What is “mandatory insurance”? What is “two-way” insurance? And what should you do if you can’t get insurance?

Public Insurance

All Quebecers are insured by the public insurance plan managed by a government agency called the Société de l’assurance automobile du Québec (SAAQ or licence bureau). The plan covers all residents of Quebec, whether or not they have a driver’s licence.

The plan gives compensation (money) for injuries from accidents involving a road vehicle. For example, a pedestrian or cyclist hit by a car could receive compensation from the SAAQ. The plan gives compensation to Quebecers for accidents in Quebec and elsewhere in the world.

Also, the plan covers people even if they are responsible for the accident.

Under this plan, you can’t sue anyone for your injuries, but nobody can sue you either.

Private Insurance

However, the SAAQ doesn’t cover other kinds of damage, such as damage to your car or someone else’s. This is why you also need private insurance from an insurance company.

In Quebec, all insurance companies offer the same type of private insurance using the “Quebec Policy Form.”

There are two sections to the policy form. Section A covers civil liability (explained below). Every car owner must have Section A insurance. Section B covers damage to your own car. You can decide whether to take Section B coverage or not.

Section A: Required

In Quebec, all car owners must have at least $50,000 of insurance for responsibility for damage and injuries (in Canada and the United States). This is also called “civil liability” insurance.

This type of insurance is sometimes called “one-way insurance” and covers these kinds of damage you cause to other people or their property:

Material Damage:

  • property damage you cause with your car (for example, when entering your parking space, you damage your neighbour’s fence)

Physical Injuries:

  • injuries you cause that aren’t covered by the SAAQ or another public plan

This type of insurance also covers damage to your own car due to a collision with another car that wasn’t your fault. If you caused the collision, you’ll only be covered if you have optional Section B insurance (explained below).

If you don’t have this type of insurance and the police stop you, you could be fined and your driver’s licence could be temporarily taken away.

Civil liability insurance applies in Canada and the United States.

Section B: Optional

This is often called “two-way Insurance.” This type of insurance is optional. (You can decide to get it or not.)

Depending on what you choose, this type of insurance can cover damage to your car due to a collision you caused. It can also cover theft of your car, among other things.

These are the types of optional protection offered under Section B:

  • damage to your car in a collision with another car or if your car flips over, even if you are at fault
  • damage caused without a collision, for example, by fire, hail, flood, vandalism or theft
  • all risk insurance, which covers damage to your car except for anything specifically not covered by the policy, such as rust
  • specific events mentioned in your policy, such as an explosion or earthquake

If you want insurance for other types of damage, you can buy extra insurance from your insurance company. This extra insurance is officially called an “endorsement” but is more commonly known as a “rider.” It’s optional, but you have to pay more for it.

Premiums and Deductibles

The amount you pay for your insurance is called a “premium.” Your insurance premium is based on your personal situation, such as your age, sex, driving record, type of car, where you live and use your car, what you use your car for, etc.

Some insurance companies also look at your credit information (your record of paying your bills).

Depending on the type of insurance you choose, you might also have to pay a “deductible.” A deductible is the amount your insurance doesn’t pay when you make a claim. You have to absorb this amount.

Important! You don’t have to pay the deductible if the accident isn’t your fault. You’ll be compensated under your civil liability insurance (Section A of your policy).

Usually, the higher the deductible, the lower the monthly premiums.

Shopping Around for Car Insurance

You can shop around for car insurance when your policy is up for renewal. Contact other insurance companies to find out if they offer a better price or better coverage. Compare the differences in the premiums, deductibles and coverage so you can make an informed choice.

Renewing or Cancelling Your Insurance Policy

When your policy ends, it’s renewed automatically on the same conditions, unless your insurer sends you a written notice. Your insurer must send you the notice at least 30 days before your policy ends. This end date is also called the expiry date.

Also, you can cancel your policy at any time by sending your insurer a written notice. You don’t need to give an explanation. If you already paid your premiums, the insurer will refund you.

The insurer is also allowed to cancel your policy in the first 60 days. The insurer must send you a written notice, and the cancellation takes effect 15 days after you receive the notice. The insurer can’t cancel your policy after the first 60 days unless you didn’t pay your premiums or you have become a bigger risk for the insurer. In this situation, the insurer must send you a written notice, and your policy will be cancelled 30 days after you receive the notice.

If you have a disagreement with your insurer, you can file a complaint with a government agency called the Autorité des marchés financiers (AMF).

If You Can’t Get Insurance

You might have trouble getting insurance if

  • you’ve made several claims in the last few years,
  • you fall behind on your payments, or
  • you have a criminal record.

All car owners must have civil liability insurance for the damage they cause to other people. What if you can’t find an insurer willing to insure you?

The Insurance Information Centre can help. You must follow a procedure called “access to insurance.” It guarantees to find you the minimum coverage the law requires. There is no charge for the service, but you have to pay for the insurance.

Important! You must complete certain steps before the Insurance Information Centre can help you.

To qualify for help, at least five insurers must have refused you. Make sure you keep a record of your calls to prove this. Write down the names of the insurance people you speak to. Keep the names and telephone numbers of the companies as well.