The Personal Cost and Affordability of Automobile Insurance in Canada: 2008 Edition

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This study estimates and compares the average cost of personal passenger automobile insurance premiums in each of the 10 Canadian provinces for the year 2007. Other studies have examined the price of auto insurance by selectively comparing individual cases across provinces (CAC, 2003). It is often mistakenly believed that such comparisons reflect actual average premiums in each province. This error can lead to false conclusions regarding the relative cost of auto insurance.

Fair comparisons of averages are difficult to produce because of differences in the way that government and private sector auto insurers report data in each of the provinces. Four provinces in Canada have government-owned monopolies that sell insurance coverage to drivers. The other six provinces rely on a regulated competitive private sector to provide auto insurance. Government auto insurers in British Columbia, Saskatchewan, Manitoba, and Quebec do not publish data that can be directly compared to the other provinces. By contrast, in the six provinces with regulated competitive markets for auto insurance, private sector insurers are required by law to report data in a universal standardized format that makes direct inter-provincial comparisons possible. Therefore, this study applies reasonable assumptions to the data published by auto insurance authorities in British Columbia, Saskatchewan, Manitoba, and Quebec in order to calculate and draw fair comparisons of average auto insurance premiums across all ten provinces.

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