Changes to car insurance in Canada in 2021

Province by province, here’s a recap of what drivers can expect in the future

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A lot has changed in the auto insurance industry over the past two years.


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Soon after the pandemic began, many people across the country ditched their morning commutes for a work-from-home model. Meanwhile, fewer drivers hit the road. In response, car insurance companies have offered discounts to reduce premiums and additional emergency relief measures to help people facing financial hardship. Yet many drivers have seen their rates increase at the end of 2020.

As COVID-19 vaccines became more widely available in 2021, retail businesses reopened to in-person shopping and businesses welcomed employees into their offices. Pent-up consumer demand quickly impacted the auto industry, and a global shortage of microchips made some cars difficult to buy. And, as new vehicles were scarce, used car prices soared.


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In order to reduce car insurance costs, many drivers have turned to usage-based insurance (UBI). In fact, data from showed a 43% year-over-year increase in the percentage of drivers choosing UBI when filling a auto insurance quote on our site in 2020.

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At the same time, regulators in several provinces have laid the groundwork for auto insurance reform and taken steps to improve insurance systems. Many of these initiatives will come into effect in 2022.

Here’s a look at the big changes to car insurance across Canada starting in 2021 and what drivers can expect this year.


Some Albertans faced premium increases at renewal last year following the abolition of the former NDP government’s 5% rate cap in 2019. While the average increase was d about 3%, one man reported an 18% increase in his car insurance rate.


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Fortunately, drivers can anticipate reform. On January 1, 2022, Bill 41 entered into force, aimed at stabilizing Alberta auto insurance costs and improve medical benefits for Albertans injured in collisions. The legislative changes also enabled direct compensation for property damage (DCPD), which means drivers will work with their own insurance company to cover the cost of repairs if they are not at fault for the collision rather than with a third party, which reduces costs.

British Columbia

On May 1, 2021, the Insurance Corporation of British Columbia (ICBC) rolled out its no-fault auto insurance system, called Enhanced Care. Under this system, drivers receive accident benefits from their insurance company for a claim, regardless of fault.


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The new care-focused system will help anyone injured in a collision in British Columbia by providing medical care, recovery options and financial support.


In April 2021, Manitoba Public Insurance Corporation (MPI) began offering enhanced Autopac coverage and deductible options. MPI has increased the basic liability from $200,000 to $500,000 to provide better protection. Vehicle owners will also get a base maximum insured value of $70,000, up from $50,000 previously.

New Brunswick

Several New Brunswick automobile insurance companies have been authorized to use driver credit scores to formulate their premiums – despite the strong reluctance of consumer advocates. Drivers are looking for car insurance in new brunswick who agree to share their information can benefit from a discount; however, those who refuse will not be penalized.


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New Scotland

In 2021, the Cap on minor injuries has been adjusted to $8,937 in accordance with the Regulation respecting minor injuries caused by an automobile accident. The cap represents the total compensation a person can receive for minor injuries sustained in a collision.

Car insurance premiums in Nova Scotia continue to be among the cheapest in the country.


In November 2021, the Financial Services Regulatory Authority of Ontario (ARSF) has released a “Take-All-Comers” guide to clearly outline the legal obligations of auto insurance providers in the province. Insurance companies, agents and brokers must offer consumers the lowest rate available, offer all eligible consumers a quote or renewal, and accept all consumer business that meets insurer-approved rules.


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These guidelines aim to improve equity in the Ontario Auto Insurance system.

Prince Edward Island

The Canadian Automobile Association (CAA) has begun offering pay-as-you-go insurance drivers in Prince Edward Island. The MyPace policy charges rates based partly on driving record and partly on miles driven. People who travel less than 12,000 kilometers per year can benefit from this type of auto insurance in PEI


Quebec drivers saw a small increase in their insurance contributions applicable to driving licenses in 2021. However, holders of class 5 or 6 licenses — with the exception of holders of a learner’s permit — will benefit from a holiday from paying the insurance contribution in 2022 and 2023.

Insurance premiums go into a public automobile insurance fund in the province. Insurance rates increase when more road accident victims or their families receive compensation. However, a significant drop in claims has resulted in a surplus of funds, allowing some drivers to skip insurance dues this year.


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Drivers will still have to pay their license and private fees Car insurance Quebec costs.


Saskatchewan Government Insurance (SGI) adjusts rates annually based on the Canadian Loss Experience Automobile Rating System (CLEAR), which looks at multiple risk factors, such as vehicle type and claims risk, to determine rates.

CLEAR updates from 2017 to 2019 were revenue neutral and rate neutral. In 2020 and 2021, CLEAR updates were canceled due to the pandemic. However, the rate changes will take effect on April 1, 2022, as part of a rate rebalancing effort.

SGI has also set up enhanced accident benefits in May 2021. The additional support has benefited over 1,200 customers.


Purchase car insurance in yukon got a bit more expensive last year. From 1 January 2021, a single tax rate of 4% will be applied to a driver’s premium if they take out insurance from a provider that is not approved in the territory, i.e. an increase of 2% compared to the previous year.


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Car insurance changes changes drivers can expect in 2022

As more drivers return to their daily commutes and take leisure trips, more collisions (and, therefore, claims) are likely to occur, driving up car insurance rates. Because auto insurance is regulated, however, rate changes won’t happen immediately. The good news is that once crash rates return to previous numbers, the savings should flow back to the consumer. is a free, independent rate comparison website that allows Canadians to compare rates from over 75 providers for various financial products, such as home and auto insurance, mortgages and credit cards.


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