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Canada - Car Tax and Insurance
In Canada as in the UK all cars must have a valid insurance policy with a minimum of third party cover. There are several differences between the Canadian car insurance system and the UK though, most notably that there must be a minimum amount of liability cover. In Quebec that minimum amount stands at $50,000 although for the rest of the country it is $200,000. Newfoundland and Labrador is the only territory or province of Canada that doesn’t require drivers to cover their own medical insurance costs and loss of income though injuries sustained in a road accident.
The Canadian car insurance can be bought at three levels. The minimum level is the third party cover which is the legal requirement on all motor vehicles. This type of insurance will pay for any damage sustained to the third parties car, property or person if the accident is the fault of the insured driver. The Collision policy will cover damage to the insured drivers own car if the accident is their own fault and the Comprehensive cover pays out in cases of vandalism and theft as well as covering for collision and third party liability.
It is possible to insure a foreign vehicle in Canada, so any expat moving to the country who wishes to take their own car with them can do so easily. The safety standards for Canadian road vehicles are extremely high and any cars being imported must meet the strict criteria. The car must also be officially registered once in the country. These rules do not apply if only visiting the country for a short period, such as for tourism. The vehicle cannot however be sold in Canada and cannot stay in the country longer than the owners tourist visa or work permit allows.
US car insurance usually has the option to cover tourist travel in Canada, but if you are travelling from the US you must first make sure your policy covers you for the minimum liability cover Canadian law requires as the minimum in the US is far lower.
Car insurance in Canada is well known for being costly. If you need to obtain a Canadian car insurance policy then there are several things that are required. A Canadian driving licence is a must have item. Those with a foreign licence will rarely be given insurance in Canada. With your driving licence you must also provide proof of your name and address and your driving record. As in the UK you also need to provide details of the vehicle to be insured such as make and model, registration number and current mileage. Your new car insurance company will also ask for information regarding your current insurer and also past insurers. Your current or previous insurer should also provide you with a letter that officially states your no claims bonus, which you can then use for discounted insurance premiums as in the UK. The no claims bonuses that come from foreign drivers may be rejected by the Canadian car insurance companies as they are not legally obliged to accept them.
Once you have an insurance policy in place the company will send over a certificate to you and also a card to carry with you at all times. The police can stop you at any time and ask you to produce your insurance details. You must always have it with you.
Making a claim on your car insurance policy is done in a similar way to a claim in the UK. Some companies insist on claims being made within 7 days of any accident, but the rest of the process remains the same. Some car insurance companies in Canada have their own preferred car repair shops and therefore you must wait for the go ahead from the insurance company before undertaking any repairs yourself. If making a claim against another driver’s insurance you must contact them personally within 7 days of the accident.
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