• Sun. Dec 3rd, 2023

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Does your credit score impact your car insurance rate in Canada?

In certain Canadian provinces, auto insurance providers are allowed to access your credit rating

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Your credit score can affect your ability to get a credit card, qualify for a loan, rent an apartment, buy a home and even land a job. But, can it affect your car insurance rate?

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That depends. In certain Canadian provinces, auto insurance providers are allowed to access your credit rating while others are barred from doing so.

In Canada, credit scores range from 300 to 900. According to Equifax, a credit reporting agency, a credit score from 660 to 724 is considered good, a score of 725 to 759 is very good, and 760 and up is considered excellent.

It’s when someone has a score lower than 660 they might start to have trouble borrowing money or proving their reliability. A credit score of below 560 is considered poor and can make it especially difficult to prove that you can use credit responsibly compared to those with higher scores.

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Where can my credit score be used to set my car insurance rates?

Many Canadians are likely unaware that their credit score can influence their auto insurance rate, except if they live in Ontario and Newfoundland and Labrador. 

These two provinces are the only provinces in Canada that prevent auto insurance companies from using credit score data to impact insurance rates. In Ontario, for example, you’ll only be evaluated based on your driving experience, driving record, age, gender, where you drive, the kind of car you drive, how you use your vehicle, and how much coverage you need. 

If you’re securing car insurance in Alberta, however, your auto insurance company can use your credit score to determine your premium — but they can’t do it without your consent. So, if an insurance company asks to see your credit score, you have the right to say no.

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In Nova Scotia, auto insurance companies might ask for your credit information when calculating your premium, but you can’t be denied if you refuse.

An insurance document.
An insurance document. Photo by Stock photo /Getty Images

Can credit scores be used to set insurance rates in provinces where insurance is publicly run?

For other provinces in Canada, there aren’t any clear rules or regulations around how this works. That said, in provinces where auto insurance is provincially regulated, like British Columbia, Manitoba, and Saskatchewan, drivers shouldn’t have much concern. While there’s nothing barring insurance companies in these provinces from asking drivers about their credit history, these government providers also don’t list credit history as a guideline for determining someone’s premium on their websites. 

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While the relationship between credit scores and car insurance ratings can be murky, the Insurance Bureau of Canada (IBC) has made efforts to protect consumer interests.

Back in 2010, IBC’s board of directors approved the Code of Conduct for Insurers’ Use of Credit Information. Insurance providers that do seek consumer credit information are required to receive the customer’s informed consent and use other relevant information for underwriting and rating purposes if the customer doesn’t have credit history. 

Insurance providers also can’t deny or cancel an insurance policy based on a customer’s refusal to consent and they must provide guidance if a customer believes their credit rating has been negatively affected by “extraordinary life events,” the Code says. 

When applying for car insurance, always check what the rules are in your province around credit scores and insurance premiums. The more knowledge you have, the better you’ll be able to advocate for yourself with your insurance company.

LowestRates.ca is a free and independent rate comparison website that allows Canadians to compare rates for various financial products, like auto and home insurance, mortgages, and credit cards.


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