As far as bordering countries go, the United States and Canada share an amicable relationship. They agree on most questions surrounding military, economic, and travel matters.
There may be a cultural rivalry, though, on more frivolous topics like whose sporting pride is more dominant (there’s nothing like Canadians’ insistence on playing hockey out in the frigid northern temperatures), or who puts too much maple syrup on their pancakes.
We already know that vacation is a significant pastime for both areas, and Canada has the more open and spacious land to hit the road and explore the world. But who enjoys the benefits of cheaper travel by car?
Car insurance in Canada vs USA is not so cut and dried. There are many different ways to compare the two nations and see who comes out on top for affordable and practical coverage.
We’ll cover the average rates of both countries and the pros and cons of taking out auto insurance in each one, and we’ll try to make a final verdict on which is the superior nation to take out car insurance.
Driving Habits and Car Insurance in Canada
Like the U.S., Canada requires all drivers to be insured to be legally allowed on the road. Unlike their southern counterparts, though, many provinces in the Great White North require more than just liability insurance to travel around the highways.
Liability-only insurance is a baseline coverage that takes effect and pays for the damage and expenses caused to another party after an accident or incident. It doesn’t grant the policyholder any financial backing for their hardships in the aftermath of a wreck.
By forcing Canadians to get more extensive coverage, these laws encourage safer all-around roadways and good protection for what is a very risky mode of transportation.
In the long run, not having auto insurance covering your medical bills and car damage expenses can wreak financial havoc on yourself and your family. Smart folks should already know they are taking a risk by purchasing liability-only coverage, but Canadian laws requiring these extra precautions take the decision out of the civilian’s hands.
Another critical difference between the two nations is that Canadian cars automatically become unregistered if an insurance policy no longer covers them. The U.S. requires auto insurance, but they do not tie the registration status of the car to the possession of coverage.
These two subtle differences make Canada a more conscientious country to drive around in, whether you are taking a long cross-country vacation or planning to move in with the neighbors up north.
At the same time, it may make it seem like the U.S.’s more lax approach to some issues also makes it a cheaper place to live and drive around in. Is this assumption really factual, though?
The U.S.’s Less Engaged Insurance Policies
Americans are famous for not getting much governmental assistance for education, food, and services. This extends right into the philosophies behind insurance. Americans can’t rely on getting any federal aid for injury claims in case of an accident.
Canadian provinces like Quebec have their citizens’ injury claims paid for without any worry of what insurance policy the buyer has taken out. This forgoes an expense and creates less decision-making about what policy will be cheaper for personal health problems from a car wreck.
On the other hand, the slight decrease in automobile laws in America makes it so that the policyholders have a possibility of spending less money on premiums and deductibles that may be a requirement to thorough standards in Canada.
The U.S.’s approach encourages short-term saving with long-term consequences. There is a riskier appeal to auto-insurance in the U.S., but the fact that coverage is legally required makes the affair a lot more similar to Canadian practices than you may have thought.
The Verdict: America vs Canada Insurance and Driving Costs
The fact of the matter is that American and Canadian auto insurance is easily interchangeable if taken out across either side of the border. Both places give you a myriad of options to search for the cheapest policy options, and this is great because you are legally required to have car insurance in Canada and most states in the U.S.
The added federal responsibility for personal injuries and the stricter registration laws in Canada have added layers of protection for your safety that may cost you more money in the short term, but will save your skin in the long run.
Suppose you are going to make a major relocation decision based upon the difference in car insurance costs in these two countries, or you think that moving to one or the other will mess with your policy and currently paid premiums in some way. In that case, there is no need to waste time and energy fretting over such concerns.
You would be far more productive looking into other economic differences between the two nations for driving, such as gas prices, oil changes, or even the financial setbacks of buying a new car.
Because of the extra taxes imposed on Canadians compared to their American counterparts, gas is about 70 cents more expensive per gallon there. This would apply to really any purchases associated with vehicles in Canada, as the federal government there imposes more stringent taxes on most products and services than they do in the U.S.
This means that if you were to make a broad generalization about which place is cheaper to drive through, the U.S. would win by just a hair. But if you focus on insurance and the consequences of car accidents, Canada is the safer and more efficient place in the long term.
The main point you should remember here is that there are far more similarities than differences between the two nations when it comes to driving. If you think you are going to get a better result by traveling or moving to one or the other, you will most likely end up disappointed. It is still good to be aware of these minor differences, though.
Shawn Laib writes and researches for the car insurance site, CarInsuranceComparison.com. He is passionate about safety and financial security as it relates to drivers and their families.
Published by HOLR Magazine.