Why are newcomers to Canada facing challenges in obtaining car insurance?
Newcomers to Canada face difficulties when trying to secure car insurance. Farshad Barzegar, a recent immigrant, encountered obstacles when he tried to get insurance after buying a car after moving to Canada.
The problem was that his 16-year driving history from Iran and South Africa was not recognized by Canadian insurance companies.
The lack of recognition for his international driving history resulted in Barzegar’s insurance premium increasing significantly.
He initially expected to pay around $70 per month but ended up with a premium of over $200 after being required to provide his Canadian driving license date.
Barzegar expressed frustration that TD Insurance’s website did not mention any requirement that the driving history needed to be from Canada or the US and that he only found out when he contacted them to finalize the bill.
What factors contribute to the limited recognition of international driving history?
The Insurance Bureau of Canada (IBC) explained that Canadian insurance companies generally consider driving experience based on Canadian or North American history. This is due to variations in driving conditions and regulations across different countries.
Barry Haggis, an insurance broker with the Insurance Brokers Association of Alberta, supported this perspective, stating that international drivers are typically considered “new” drivers, resulting in higher premiums.
Obtaining proof of driving history from the country of origin, however, can be challenging. Haggis emphasized the importance of documentation in obtaining lower insurance rates.
He also mentioned that these policies not only affect international drivers but can also apply to any driver who leaves the country for an extended period.
To navigate the challenges, Haggis recommends working with insurance brokers who can help find insurers that consider international driving history and offer better deals.
It is crucial for newcomers to be aware of the rules and policies regarding driving history and insurance requirements.
Barzegar expressed his willingness to abide by the rules if they were clearly communicated, but he criticized the lack of transparency from TD Insurance in explaining the policies and addressing his concerns.
Do newcomers to the US face challenges in obtaining car insurance too?
In the United States, it can also be difficult to find car insurance if you are a foreigner and not a citizen. To get car insurance in the U.S. as a non-citizen, you do not necessarily need a U.S. license.
However, not having a U.S. drivers license might raise difficulties in getting car insurance, especially because of the lack of driving experience on your (U.S.) record, which most likely will raise the cost of your insurance premium.
Like in Canada, the biggest obstacle is the driving history. It is unlikely that foreign driving experience will transfer to the U.S.
This might lead to very high insurance rates. Getting a U.S. driver’s license therefore is the best option to ensure that you build up your driving experience and decrease your premium.