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.

Driver demographics

Historically, age and gender have played an important role in determining a driver’s car insurance premium. For instance, younger men, under the age of 25, will get into more car accidents and so they pay higher premiums. Car insurance providers review historical statistics to understand their risk and price it based on their research. Other demographic type factors include the amount of time spent driving, driving convictions, and whether you have any driver training.

Where you live

Urban areas have higher claims costs because higher density equals more risk for accidents and theft. Also, any one specific region in PEI may experience different weather conditions or a different mix of vehicles on the road which can impact car insurance rates. Your optional comprehensive coverage can go down in rural areas due to a lower chance vandalism. Where a PEI driver lives is a major factor in the eyes of the car insurance provider.

Vehicle type

If you drive a rare automobile that costs a lot of money, it will probably cost a lot more than the highest-safety-rating mini-van. The type of car you drive, its make, model, and year, will affect your driver’s insurance premium. In PEI, there is a classification system that ranks vehicles by their claims experience known as the Canadian Loss Experience Automobile Rating (CLEAR). The better the claims experience (the fewer the claims) on any particular model will result in lower premiums. In 2017, the most stolen car in PEI was a 2012 Mitsubishi Lancer – you are going to pay more insurance for this car. The Ford F-series of trucks represent 8 out of the top 10 spots on most stolen cars in Canada.

Driving history

A driving conviction typically leads to increased car insurance premiums. A clean and clear driving record, over several years, will reduce your car insurance premium. In PEI, a driving conviction is classified as either minor, major, or criminal code. Your premium surcharge will be calculated based on the number and type of convictions on your record.

Driving activity

The more you are driving on the road, the more you’re going to pay in car insurance. Vehicle usage has an effect on your auto insurance rate. Be honest with your provider so they can rate you appropriately. If not, it will likely affect the amount of payout you receive in an accident; maybe even denying your claim altogether. Tell them if you just drive for fun or how long your commute is to get to and from work. If you use your car for businesses, they need to know, as they will all result in a different premium. Tell them if you started biking to work because it reduces the number of kilometres you’re driving, and you can save on auto insurance.

Type of insurance coverage

A higher deductible on your collision or comprehensive coverage can reduce your premium. Opting to pay a higher deductible in case of an accident signals to your insurer you’re a safer driver and they might reduce your premiums. A large majority of islanders opt for a higher third-party liability coverage to at least $1 million which may cost a little more now but save you big if you need to access it.

Applicable discounts

There’s lots of ways to save money on your car insurance in PEI. Paying premiums on time, insuring all your vehicles on the same policy, or bundling with your home insurance policy could save you money. It pays to shop around for car insurance quotes in PEI.

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

Do I need auto insurance in Prince Edward Island?

Yes, everyone in PEI who drives a car is required to purchase auto insurance. There are mandated minimums, but most citizens will opt for more coverage than the basics provide

Why is car insurance in Prince Edward Island cheaper?

Reforms put in place by the provincial government in 2003 helped reduce car insurance premiums. Now, PEI drivers can pick from several different car insurance companies and a big variety of options for coverage. Due to the high level of competition, the more the people of PEI get auto insurance quotes the cheaper their car insurance rates.

Do I need winter tires in Prince Edward Island?

No, you don’t need winter tires on your vehicle, but it can save you up to 5% on insurance. Winter tires are also a great safety measure - they’re softer proving a stronger grip on ice and snow.

Is roadside assistance required in Prince Edward Island?

No, but it’s best practice to have it in case of a battery failure, tire puncture, or you need a tow. CAA Atlantic memberships start at $80/year.

How do I report a claim in Prince Edward Island?

Call your personal insurance company. Often the details are on the insurance slip that a lot of people usually keep in the glove box. Make sure to have as many details available as you can - driver’s license numbers, the make of the cars and the license plates. If someone is injured, hurt, or a car can’t be moved, it’s best to call the local police.

How long do driving offences last on my driving record in Prince Edward Island?

Prince Edward Island uses a demerit point system that are applied to your driving record. Demerit points will negatively impact your car insurance premiums. If you receive the maximum number of demerit points (12), your license could be suspended for 3 months. If you are at 11 points, you may be rewarded 3 merit points upon successful completion of a Canada Safety Council Defensive Driving Course. Demerit points are stricken from the record after 2 years from date of conviction.

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