Is car insurance cheaper in the provinces with government-run insurance plans? – Nick, Ottawa

What you pay for insurance depends on a lot of factors, including your driving record, the car you drive, how long you’ve been driving and even where you live.

But, generally, in the provinces with private insurance, if you’re considered a higher risk of getting in a crash, you’ll pay more than you would in the provinces with government-run insurance.

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“With private insurance, there tends to be more differentiation between good and bad drivers,” says Werner Antweiler, professor of economics at the Sauder School of Business at the University of British Columbia.

In Canada, three provinces have government-run insurance plans: British Columbia, Saskatchewan and Manitoba.

Every year, the Insurance Bureau of Canada (IBC), which represents private insurance companies, releases a list of average rates in each province.

Last year, the average rate in British Columbia was $1,832 – the highest in Canada. In Ontario, the second-highest, it was $1,505.

But a recent report by accounting firm Ernst & Young for B.C.’s Ministry of the Attorney General looked at what different fictional drivers might pay annually in car insurance in every province except Quebec, depending on accident history and how long they’ve been driving,

It also looked at how rates vary by age, gender, employment status and marital status. Those categories are used to determine rates in provinces with private insurance but are not in British Columbia, Saskatchewan or Manitoba.

So, in the provinces with government-run insurance, you won’t pay more just because you’re male or because you’re under 25.

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More extreme highs for private insurance

For instance, take Ben. He’s a 19-year-old student who drives 15,000 kilometres a year, has had no at-fault accidents or convictions, has been driving for three years and drives a 2013 Toyota Corolla.

Ben would pay $4,516 every year in Vancouver, which has public insurance, and $6,463 in Toronto, which has private insurance.

It varies in other cities in the provinces with private insurance. According to the report, Ben would pay $7,234 in Red Deer, Alta, $4,543 in Ottawa, $6,129 in Halifax, $4,925 in Charlottetown and $7,133 in St. Johns.

The two other provinces with public insurance are cheaper. Ben would pay $1,284 a year in Saskatoon, Sask. and $1,899 in Winnipeg.

Compare Ben to Brad, who is 42, drives 30,000 kilometres a year, has had no at-fault accidents or convictions and drives a 2016 Ford F150.

Brad’s paying less than Ben in every province. Brad would pay $1,881 a year in Vancouver, $3,215 in Edmonton, $2,130 in Toronto, $1,606 in Moncton, $1,437 in Halifax, $1,040 in Charlottetown and $2073 in St. Johns.

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In Saskatchewan and Manitoba, the difference isn’t as big. He’d pay $1,259 in Saskatoon – $25 less than younger Ben. In Winnipeg, he would pay $1,423 in Winnipeg – $476 less than Ben.

Would privatizing be cheaper?

B.C. has been trying to lower its overall rates. Last year, it changed its rules so driving experience and crash history had more of an impact on rates, raising rates for drivers with at-fault accidents and lowering them for drivers with years of accident-free driving. This month, B.C. announced that it will move to no-fault insurance by May, mostly eliminating the ability for people to sue for injuries after a crash. It hopes that will cut rates by $400, on average.

But the Insurance Bureau of Canada argues that the only real way to lower rates is to introduce private insurance – the province currently allows private companies to sell optional insurance only.

“I’m not saying we have to get rid of ICBC [Insurance Corporation of British Columbia the provincial insurer], we just have to give drivers a choice and give them the ability to take their insurance elsewhere,” says IBC vice president Aaron Sutherland.

A 2018 IBC report on the potential impact of letting private companies compete with ICBC predicted that rates would decrease by up to 9 per cent for drivers older than 45 and 18 per cent for drivers over 55, but they would increase for drivers under 35.

Drivers between the ages of 25 and 45 would see no change. The biggest increase? Drivers under 20 could see rates go up by as much as 37 per cent.

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UBC’s Antweiler doesn’t think introducing private insurance would lower overall rates in B.C.

“The IBC represents private insurers and of course they want a slice of the pie,” Antweiler.

“Private companies want to pick up good drivers and push bad drivers into their more expensive default systems.”

Have a driving question? Send it to globedrive@globeandmail.com. Canada’s a big place, so let us know where you are so we can find the answer for your city and province.

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