How Auto Insurance Works in Québec

In Québec, auto insurance rests on two pillars that do not overlap. The public plan run by the Société de l'assurance automobile du Québec (SAAQ) compensates injuries suffered in a road accident, no matter who is at fault. Private insurance, which you buy from an insurer, covers property damage: the damage you cause to other people's property and, if you choose, the damage to your own vehicle.

This split explains a great deal: why an auto insurance quote includes nothing for your own injuries, why you claim from your own insurer after a collision you did not cause, and why the legal minimum only concerns property damage.

Two plans that share the work

According to the Autorité des marchés financiers (AMF), Québec's current auto insurance program came into effect on March 1, 1978. Since then, the Automobile Insurance Act (Loi sur l'assurance automobile) has treated bodily injury and property damage separately. The first is handled by a public plan administered by the SAAQ. The second is handled by private insurers, under the oversight of the AMF.

	SAAQ public plan	Private auto insurance
What is covered	Bodily injury: injuries and death	Property damage: other people's property (Chapter A) and, if you choose, your vehicle (Chapter B)
Role of fault	None: compensation regardless of who is at fault	Each party's share of responsibility determines which coverage pays
Funding	Insurance contributions collected with the driver's licence and the vehicle registration	Premium paid to the insurer you choose
Enrolment	Automatic for Québec residents	Chapter A mandatory for the owner; Chapter B optional
Who you deal with	The SAAQ	Your insurer, directly or through an agent or a broker

The SAAQ public plan, for injuries

According to the SAAQ, the public plan protects all Quebecers who are victims of a road accident, in Québec or anywhere else in the world, whether they are behind the wheel, passengers, pedestrians or cyclists.

The possible indemnities include, among others:

• income replacement when your injuries keep you from working;
• reimbursement of certain accident-related expenses, such as care or travel for treatment;
• an indemnity for permanent after-effects;
• indemnities in the event of death;
• rehabilitation measures.

The plan works regardless of anyone's fault. In return, the SAAQ explains, it is not possible to sue the person responsible for a road accident for that bodily injury.

Who funds the plan

The plan is funded, among other sources, by the insurance contributions the SAAQ collects when you pay for your driver's licence and your registration. These amounts fall under the SAAQ, not a private insurer, so they are not part of the quotes you compare. The SAAQ also points out that demerit points on your record increase your contribution to the Fonds d'assurance automobile du Québec, and therefore the annual cost of your licence.

What about outside Québec?

If you are involved in an accident outside Québec, the SAAQ warns, you could be sued in the courts of the place where you are for the damage caused to others. That is when the civil liability coverage of your private policy defends you and pays, up to the amount of insurance you chose. The SAAQ therefore recommends telling your insurer when you plan to drive outside Québec. Under the Q.P.F. No. 1, the standard policy's coverages apply in Canada and the United States; an endorsement can extend them to other countries.

The public part of your protection is automatic. The private part is something you compare.

What is mandatory in private insurance

The Automobile Insurance Act requires every owner of a motor vehicle driven in Québec to hold civil liability insurance of at least $50,000. According to the SAAQ, this basic insurance covers the property damage you could cause to others, and higher minimums apply to certain uses, such as transporting goods or people.

This coverage corresponds to Chapter A of the standard policy, the Q.P.F. No. 1 (the English version of the form calls it Section A). It pays, up to the amount of insurance, for the damage you cause to other people's property: another vehicle, a fence, a storefront, a lamppost. The insurer also takes charge of your defence and of the costs of a lawsuit brought against you.

The legal minimum is a floor, not a recommendation. Insurers offer higher amounts, and the choice depends in particular on where you drive and on what could be claimed from you personally if a claim exceeded your amount of insurance.

What is optional

No law requires you to insure your own vehicle. Chapter B of the policy covers the damage it suffers, depending on the option chosen: B1 (all perils), B2 (collision or upset), B3 (accidents without collision or upset) or B4 (specified perils). The version of the Q.P.F. No. 1 now in force calls them Protections 1 to 4. Each option carries a deductible, meaning the share of the loss that remains your responsibility.

According to the AMF, if you borrowed money to buy your vehicle or you lease it long term, your financing or lease contract will likely require this kind of insurance. For a vehicle that is paid off, the decision is yours: it depends on the vehicle's value and on your ability to absorb a loss.

Finally, endorsements modify or add to the contract: replacement cost (valeur à neuf), travel expenses during repairs, liability for rented vehicles, roadside assistance. They are optional and generally add to the premium.

Who pays for what after an accident

Situation	Injuries	Damage to your vehicle
Collision in Québec with another vehicle whose owner is identified	SAAQ, for each injured person	Your own insurer, under the Direct Compensation Agreement
Leaving the road, hitting a tree or a pole	SAAQ	B1 or B2, if you bought it
Hit-and-run	SAAQ	B1 or B2, if you bought it
Theft, vandalism, hail	Not applicable	B1, B3 or, for the perils it lists, B4

A collision between two vehicles

According to the Groupement des assureurs automobiles (GAA), the Direct Compensation Agreement (Convention d'indemnisation directe) applies to a collision that occurs in Québec, between at least two vehicles, whose owners are all identified. Written and kept up to date by the GAA, it binds all auto insurers. Each driver is compensated directly by their own insurer, which determines each party's responsibility using the fault scales set out in the agreement.

If you are not at fault, you are compensated even if your policy does not cover collision, and you have no deductible to pay: that damage is covered under Chapter A of your own contract. If you are at fault, you are only compensated if your policy covers collision (B1 or B2), and the deductible applies.

An accident with no other vehicle identified

The agreement does not apply, the GAA points out, to a collision with a tree or a pole, to a hit-and-run or to a collision in the United States. For damage to your vehicle, it is then your collision coverage (B1 or B2) that can respond, minus the deductible. If you damaged someone else's property, such as a neighbour's fence or a municipal lamppost, your Chapter A compensates its owner.

Losses without a collision

Theft, vandalism, hail or fire generally cause no injuries, and the SAAQ is not involved. These events fall under B1 or B3. B4 only covers the perils it lists, such as fire, theft or hail; according to the AMF, malicious acts are not among them.

After an accident, the right reflexes

• Make the scene safe and call for help if anyone is hurt.
• Fill out a joint report (constat amiable) with the other driver. Offered by the GAA, online or on paper, this form is used to identify the parties and to report the accident to the insurers; according to the GAA, it is not an admission of liability, and there is no need to call the police to a simple fender-bender with no one injured.
• Settle nothing on the spot. The Q.P.F. No. 1 asks the insured not to comment on their liability or settle a claim; an agreement reached without the insurer's consent does not bind it.
• Notify your insurer without delay, whether or not you make a claim. The Civil Code of Québec requires the insured to report to the insurer any loss that may bring the coverage into play, as soon as they become aware of it.
• For injuries, contact the SAAQ, not your private insurer.

Your losses are also recorded in the Fichier central des sinistres automobiles, the central auto claims file. According to the GAA, this file, which belongs to the AMF and which the GAA manages, lists each insured's losses over the past six years, whether or not a claim was made; insurers consult it when you apply for coverage.

Comparing quotes on the same basis

These questions help you compare quotes on an equal footing:

1. How much civil liability? The legal minimum or more, depending on where you travel.
2. Should you insure your vehicle? Depending on its value, the lender's requirements and your ability to absorb a loss.
3. Which Chapter B option? B1, a combination of B2 and B3, B3 alone or B4.
4. Which deductible? The higher it is, the greater the share of the risk you keep.
5. Which endorsements? The ones that meet a real need.
6. Who drives, and for what use? The declared drivers and the use must reflect reality.

According to the AMF, the price of insurance can vary from one insurer to another for exactly the same coverage and the same conditions. The AMF also states that a broker must be able to obtain quotes from at least three insurers, whereas an agent offers the products of a single insurer. Two quotes can only be compared, however, if they cover the same protections, the same deductibles and the same endorsements.

For a specific question, Info-Assurance, a joint initiative of the Insurance Bureau of Canada (IBC, Bureau d'assurance du Canada) and the GAA, answers consumers, and the AMF's register lets you check that an insurer, a firm or a representative is authorized to practise. To go further, see our guides to the Q.P.F. No. 1 policy, the deductible and the factors that affect your premium.

We explain; the quotes come from licensed partners.

Sources

• Société de l'assurance automobile du Québec (SAAQ), saaq.gouv.qc.ca: the public auto insurance plan in brief, demerit points.
• Autorité des marchés financiers (AMF), lautorite.qc.ca: auto insurance, Québec's auto insurance program, approved auto insurance forms, including the Q.P.F. No. 1.
• Groupement des assureurs automobiles (GAA), gaa.qc.ca: Direct Compensation Agreement, joint report (constat amiable), Fichier central des sinistres automobiles.
• Info-Assurance (IBC and GAA), infoassurance.ca.
• Automobile Insurance Act (Loi sur l'assurance automobile, CQLR, chapter A-25) and Civil Code of Québec, LégisQuébec, legisquebec.gouv.qc.ca.