The car insurance industry bases performance on risk. Statistical analysis of data over time permits insurers to provide reasonable premiums while balancing accident claims payments. The most affordable premiums fall on drivers in safe demographic categories, living in areas not prone to a high crime or frequent accidents who drive popular cars with modest performance and conservative features. When a motorist breaks from these conventions, car insurance costs increase.
Importing Vehicles into Canada
Bringing a car into Ontario is a complex procedure. It’s somewhat easier if the vehicle originates in the United States, but it is still a process loaded with bureaucratic requirements. Transport Canada looks after car imports. The Registrar of Imported Vehicles procedure is strict. For example, vehicles that are modified beyond basic maintenance and repair probably aren’t admissible. While the U.S. and Canada have similar standards for vehicles, Canada does have some unique requirements. Manual transmission clutch interlocks and daytime running lights are two examples of safety equipment required in Canada.
Auto Insurance and Car Ownership in Ontario
If a motorist clears the Transport Canada hurdles for importing a car, registering ownership is next. In Ontario, ownership, licensing, insurance, car and driver’s license have an interlocking relationship. To register ownership you must obtain car insurance. You must have a driver’s license to obtain insurance. A car must meet safety standards and you must have ownership to obtain license plates. When one aspect is missing, a car can’t operate legally in Ontario. You can find more information on the registration requirements here.
Insurance Requirements for Cars in Ontario
Car insurance itself is complex. Ontario has a minimum standard of coverage that every car must carry. This minimum covers the driver, occupants and other persons involved in accidents against personal injury and some types of loss. Third-party liability coverage is the key component, with $200,000 being the provincial minimum. Settlements of serious accidents can exceed this amount. It’s common for Ontario motorists to purchase liability insurance in higher amounts. Coverage of $500,000, $1 million and $2 million is common.
Collision and comprehensive coverage aren’t mandatory and excluding these can keep insurance costs down. However, a driver must accept the additional financial responsibility in the event of loss or damage. An imported car likely has value to the owner and collision and comprehensive coverage are probably desired. A motorist seeking affordable coverage can raise deductible amounts to lower policy costs.
Vehicle Factors Affecting Car Insurance Prices
When an imported vehicle is rare, insurers assess greater risk. Without data on a vehicle make and model, repair costs for a vehicle remain unknown. Parts and knowledgeable service are likely equally rare and therefore expensive. With the risk of expensive repairs, insurers offset costs by raising premiums. A more common vehicle isn’t subject to this, but such a vehicle can more likely be sourced within Ontario or other parts of Canada. This beats the need to import a car into the country.