In some provinces of Canada, drivers can choose between public and private car insurance programs. The government administers public auto insurance. Individual, privately owned companies provide private insurance. There are differences in the insurance products provided by these two entities. Each has advantages and disadvantages.
Most people are familiar with private insurance. While the government regulates insurance, individual companies do have flexibility in the type of coverage offered and the premiums charged. There is a wider selection of coverage options with private car insurance. Private insurance offers both personal injury and property damage coverage. These private companies are also in competition with each other, and thus, offer a wide range of deductibles and discounts. Privately owned companies are for profit and have shareholders to satisfy. This is why private insurance is usually more expensive than public insurance. Because of the competitive nature of private insurance companies, they generally provide good customer service.
Private insurance is probably the best option for multi-vehicle households with late model cars requiring comprehensive and collision coverage. This is especially true where the drivers have good records and qualify for policy discounts. Carrying higher deductibles also keeps the cost of private insurance premiums down.
The government administers public auto insurance. Coverage options are limited and property damage is not offered. That coverage must be purchased from a private insurance company. Those desiring complete coverage will have to purchase an additional property damage policy from a private company. Public insurance deductibles are fixed, and there are no multi-vehicle discounts. Public insurance has no burden to provide profits for shareholders, and that keeps the rates low. Government insurance rates do not rise as rapidly as their private counterparts do. These lower rates are appealing to many who feel gouged by the rising costs of private car insurance.
Rising insurance costs put coverage out of the reach of many who decide to forgo coverage and drive uninsured. In provinces where public insurance is an option, the number of uninsured drivers has dropped dramatically. Most drivers who have difficulty affording private insurance are not driving late model cars and do not need the extra comprehensive and collision coverage. A public policy with its lower rates provides just right amount of coverage that is needed.
Those fortunate drivers who have a choice in car insurance programs should carefully assess their car insurance needs. If buying policies from both private and public programs, check for duplications in coverage. There is no need to pay twice for the same coverage. Drivers with good driving records and older automobiles will find the basic coverage offered by public insurance to be less expensive than a private policy.