Prince Edward Island car insurance

How car insurance coverage works in Prince Edward Island

Prince Edward Island (PEI) car insurance is mandatory and provided by private insurance companies and brokers. The Office of the Superintendent of Insurance regulates the business of insurance granting licenses to insurers, agents, and adjusters operating in the province. A driver with a number of convictions on their record may find it difficult to afford their premiums and can turn to The Facility Association who guarantees availability of automobile insurance to those eligible. PEI’s mandatory coverage includes $200,000 in third-party liability insurance which protects drivers in the event they cause injury or death to a third party. In PEI, you are also required to have uninsured coverage in case you’re in an accident with an uninsured driver. However, you’ll want to speak with a private insurer to determine which additional car insurance coverage might best suit your protection needs. For instance, most people in PEI increase their third-party liability coverage to at least $1 million.

Here is an overview of the available car insurance coverages in Prince Edward Island:

Coverage Description
Public Insurance

Basic auto insurance coverage provided by the Provincial government. This generally includes liability, accident benefits and uninsured motorist coverage.

Available: No
Required: No

Private Insurance

Auto insurance policies created & sold by private insurance carriers. Though these carriers must still abide by Federal and Provincial regulations.

Available: Yes
Required: Yes

No-fault insurance

Having no-fault insurance doesn’t mean you can’t be found at fault. This coverage means you must first deal with your own insurance company for all claims, whether you’re at fault or not. But, Prince Edward Island will allow a no-fault driver to sue an at-fault driver for additional damages and costs that are not covered by their accident benefits.

Available: Yes
Required: Yes

Third-party Liability Insurance

Protects against damage caused by you while driving and includes injury and death to others and property damage. This is the only insurance coverage that is mandatory across Canada. Minimum coverage for Prince Edward Island is $200,000.

Available: Yes
Required: Yes

Accident Benefits

Covers your medical benefits if you’re injured in a crash, whether you’re at fault or not. The coverage includes your medical costs, while also paying for additional recovery costs, such as rehab, income replacement, and payment for and attendant care, if needed.

Available: Yes
Required: Yes

Direct Compensation-Property Damage (DCPD)

Covers damage to your vehicle and its contents, and for the loss of use of your vehicle when damaged – if another person was at fault. This coverage only applies if the crash occurs in a province where DCPD is mandatory, if two or more insured vehicles are involved, and if both insurers are licensed within that DCPD province.

Available: Yes
Required: Yes

Uninsured Motorist

Uninsured motorist coverage protects against injuries you and your family members sustain in a crash caused by an uninsured motorist. It can also cover your vehicle damages, if the uninsured driver is able to be identified.

Available: Yes
Required: Yes

Collision Insurance

Protects against damages sustained in a collision. This insurance covers you if your car is damaged in a crash – in both cases whether you crash into another other car or whether you crash into a stationary object.

Available: Yes
Required: No

Comprehensive Insurance

Protects against any losses a car owner may suffer, from events not related to driving. Such losses could include theft or damage from attempted theft; vandalism; environmental damage to a car from floods, fallen trees, and hail, etc.

Available: Yes
Required: No

Specified Perils

Covers your financial losses for damage caused specific perils – but only for perils chosen specifically for your policy. Available coverages are for theft; fire; damage from hail, lightning, wind, or flooding; earthquakes; explosions; riots; aircraft crash damage; and damage sustained during any transportation relocation.

Available: Yes
Required: No

All Perils

This combines the coverages you get with collision and comprehensive insurance. Additionally, all-perils also covers you if an employee, or someone who drives or services your car, steals it. It also covers you if someone you live with steals your vehicle.

Available: Yes
Required: No

Emergency roadside assistance

This service covers you for roadside callouts for emergencies such as dead batteries, towing, flat tires, keys locked in your car, empty gas tank, etcetera. Many insurance companies offer roadside assistance either included or in addition to other coverages.

Available: Yes
Required: No

*Table information sourced from http://www.ibc.ca (2017)

Historical Prince Edward Island auto insurance rates

The Island Regulatory and Appeals Commission (IRAC) reviews, approves, and enforces car insurance rates. In late 2003, Prince Edward Island made significant changes to auto insurance including an introduction of rate regulation. It mandated all car insurance providers to seek IRAC authorization for any rate changes. Each insurer must now file its rates for review once a year. Rates subsequently decreased approximately 10% the following year. Between 2004 and 2006 some insurers dropped their rates by as much as 30%. Now, residents of PEI pay the second lowest car insurance rates in the country. The average rate calculation for any region is the result of how many claims are submitted there and the costs of those claims.

Factors that impact your Prince Edward Island car insurance rates

To find the best car insurance rate in PEI, it pays to shop around for car insurance quotes. An insurance application is fairly standard, with each provider asking a similar set of questions to determine your rate. Though you’ll find that insurance rates can vary between providers. The differences in rates reflect a few factors, such as: who that company presently insures, the number of active claims they are currently processing, and the insurers own tolerance for risk. There are several other factors out of your control that can impact your rate calculation, such as age. Usually the frequency of claims goes down with age – and that’s true for both men and women, and therefore an older, more experienced driver, will be rewarded with a cheaper premium.

Here are seven factors that help to determine your car insurance premium.

How to get cheap car insurance in Prince Edward Island?

Shop and compare

The IRAC wants you to shop around because it helps all PEI citizens pay less for car insurance. At Ratehub.ca, we generate quotes from Canada’s top car insurance providers all from one easy-to-use tool. Use our form to research which car insurance company provides the best value for you and your car. In PEI, rates change often, but lucky for you shopping for rates with us is free.

Stay with your current insurer

Some car insurance companies in PEI hand out loyalty discounts to drivers who remain active on their plans for years.

Bundle Your Policies

If you use the same insurance company for both your home and auto insurance needs, your insurer will often thank you with a dip in premiums.

Get a multi car discount

If you have multiple drivers and vehicles in the same household, by putting them all on one policy can save you money.

Research your vehicle

If you have multiple drivers and vehicles in the same household, by putting them all on one policy can save you money. a. The model of car you drive, its safety rating, its price, the amount of times it gets stolen – all affect your automobile premium. PEI uses the CLEAR table, a national project looking at all vehicles and the number of claims incurred with each. You can use it to pick the car with the cheapest auto insurance rate. Try to avoid cars with high theft rates.

Increase your deductible

Your deductible is the portion you pay when settling a claim before your insurer will pay the rest. If you’re willing to double your deductible, it could save you money.

Ask about discounts

If you’re a member of the CAA Atlantic, a large corporation, union, or a school alumnus, it could help you get cheaper car insurance.

Pay premiums annually, instead of monthly

Paying monthly adds administrative costs to your insurer, so if you’re able to pay in full annually you can lower your premiums.

Maintain a good driving record

If you’re a safe driver, obey the rules of the road and drive according to road conditions you can reduce your chances of an accident. Car crashes stay on your insurance record for up to ten years and can result in higher premiums.

Install winter tires and an anti theft device

You can save simply by adding winter tires and an anti-theft device to your car. With winter driving conditions being so treacherous throughout PEI it pays to be safe!

Keep track of your driving

You can even install a telematics device to collect driving data. With user-based insurance (UBI) you can earn discounts based on not driving far or often, and on advanced stats like how carefully you brake and accelerate.

Take a course

If you’re new to driving, a driver’s education course will save money. Your car insurance provider will think of you as a safer driver if you’ve been trained by professionals.

How to get an Prince Edward Island driver's licence

As a new driver, before you buy car insurance in PEI, you need to apply to their Graduated Driver Licensing (GDL) Program. It’s a three-year program that must be completed in order to get your full Class 5 driver’s license and it all starts with your Instruction Driver’s Permit. All license and registration services are processed through Access PEI. Let’s take a quick look at graduated license program approach:

G1 licence (or level one) eligibility criteria:

  • You need to be at least 16 years of age

  • Parent or legal guardian consent for drivers under the age of 18

  • Bring Valid ID and 2 other pieces that have your name and address

  • Pass a vision test

  • Pass a written test about the rules of the road

  • Pay the associated written test fees

  • Display the “L” decal

    Can’t consume alcohol and drive

  • Must be accompanied by an eligible licenced driver

  • Only immediate family members are allowed in the car

  • If you are under 21, you can’t drive between 1 a.m. and 5 a.m.

Stage 2 or Class G licence (or level two) eligibility criteria:

  • Have held the Instruction Driver’s Permit for 365 days (reduced to 275 days if enrolled in a driver education program)

  • Book and pass your level two road test

  • You must pay an administrative fee

  • Display “G” decal in the window

    Only one non-family member is permitted as a passenger

  • You can’t drive between 1 a.m. and 5 a.m. unless you apply for work exemption

  • Can’t consume alcohol and drive

Stage 3 or G licence (or level three) eligibility criteria:

  • Drive for one full year with Stage 2 license

  • Display the “G” decal

  • Can’t consume alcohol and drive

Full licence or Class 5 eligibility criteria:

  • Pass a behind-the-wheel road test for your full driver’s license

Frequently Asked Questions about Prince Edward Island auto insurance

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