He pays $300 a month for car insurance. Higher rates for immigrants are an 'injustice,' advocate says

Newcomers who need car insurance in Canada say they’re quoted higher rates, even if they have previous driving experience, because insurance companies don’t factor that into their monthly rate.

Hameed Yousufzai was paying $450 per month, then downgraded his car insurance to save money

A man with a red blazer stands in front of a car.
Hameed Yousufzai was paying $450 a month for car insurance when he first moved to Canada from Afghanistan. (Lisa Xing/CBC)

When 26-year-old Hameed Yousufzai came to Canada from Afghanistan two years ago, he quickly realized he needed a car to get around the city of St. Catharines, Ont., where he settled. 

When he first bought a car, he paid about $450 a month for car insurance. 

Yousufzai had been driving for seven years, but says no insurance company he checked with would take that history into account. 

"This is not actually fair for us," said Yousufzai, who needs a car to get to his job at nearby Niagara-on-the-Lake because public transit isn't reliable. 

"I am quite familiar with driving, with no accidents or with no tickets in my whole life." 

Yousufzai is among many new immigrants who say they're paying higher car insurance costs because their previous driving experience isn't factored into their monthly rates. 

He wants insurance companies to change their policies, especially because the cost of living is already so high. 

Yousufzai says he has to work to cover his expenses in Canada and support his whole family in Afghanistan, while also paying the high cost of car insurance. 

A man in a blue shirt sitting in the driver's seat of a car.
Yousufzai, 26, had been driving in Afghanistsan for seven years before coming to Canada. (Submittted by Hameed Yousufzai)

Downgrading insurance to save money

The high cost of auto insurance for immigrants isn't just an issue in Ontario. 

In Calgary, new immigrants are also struggling to pay high rates. At the Centre for Newcomers, which had about 50,000 people use their services last year, the issue almost always comes up, according to CEO Anila Umar. 

"This is an injustice," she said. "You basically have to decide, 'Am I going to pay for this car in order to get to work to make the money? Or am I going to pay for food?' " 

Umar says Calgary is not well connected enough by public transit for people to rely on it to get to work. She notes it can take several hours to get from one end of the city to the other. 

"We really do need cars in order to survive here in Calgary," she said. 

Yousufzai says he tried a variety of methods to bring the $450 a month premium down, including buying a much older car. When that didn't work, he decided to downgrade his coverage to what's known as "one-way" insurance — which cost him close to $200 a month. In the case of a collision, one-way insurance means the company would only cover damages for the other car, not his own.

"It's a big risk that I take on my shoulders," he said. 

He recently purchased a newer car because repair costs were adding up. He's now paying $300 a month for full coverage. 

Assessing risk 

Auto insurance rates have become a hot political issue in Ontario over the years. Official statistics from the provincial regulator cited by the auditor general show premiums have risen higher than inflation since 2022.

The previous Liberal government of Kathleen Wynne promised in 2013 to reduce auto insurance rates by 15 per cent within two years, but that didn't happen. In fact, rates had increased slightly by 2015

For many insurance companies, there's no way to calculate how likely someone is to get into a collision if they haven't driven in Canada, according to insurance broker Daniel Ivans, who works with aggregator website 

He said insurance companies don't have a way of assessing risk because different countries may have different rules, regulations and record keeping. They also have different climates, which means different driving conditions. 

"How much can the fundamentals [of driving] help somebody in their first Canadian winter on a February driving down an icy road?" he said. 

According to the Insurance Bureau of Canada (IBC), recognition of driving experience from outside of Canada can differ between companies. 

"Driving rules and regulations in Canada can vary quite considerably from other countries," said Brett Weltman, the IBC's manager of media relations. 

Many provinces have what's known as a reciprocal licence agreement, where people from places like the U.K. or Japan can directly exchange their licence for one from the province where they now live. Though not all companies factor that in when calculating insurance rates, some may give partial credit if someone is able to provide a driving record.

For example, Ontario company Onlia Insurance says it considers out-of-country licenced years and credits three "claim-free years" as a baseline if someone is new to Ontario and has no prior car insurance history in Canada.

International licensing not credited

While provinces like Ontario, Nova Scotia and Alberta operate under a private insurance system, others like British Columbia, Manitoba and Saskatchewan have public insurance. 

All insurers in the various provinces have different formulas when calculating someone's rate. 

For example, in Saskatchewan, basic auto insurance rates under the public Saskatchewan Auto Fund are based on the vehicle, not the driver. For people arriving from outside of the country, the insurer will only consider a discount if the newcomer provides documentation of their driving experience, including claims and traffic violations. However, that's not a guarantee.

"Most international licensing and history aren't credited in terms of getting lower or discounted insurance premiums," said Ivans. 

For Marcel van den Berg, a pharmacist who moved from Germany to Antigonish, Nova Scotia, three years ago, the difference in how much newcomers have to pay is seemingly at odds with Canada's pro-immigration policy. 

Van den Berg, who just got his insurance renewed last week, says he was "flabbergasted" that he couldn't get a lower rate than $700 a month for two cars, despite having a clean driving record for the last 30 years in Europe.

He says he feels that while many newcomers contribute to the community and society, they are still sometimes treated as second-class citizens.

"People who are immigrants are treated not in the same way as Canadians."

A man with a blazer stands in a park.
Daniel Ivans, an insurance broker with, says most Canadian insurers don't factor in international driving experience. (Lisa Xing/CBC)

Access to cars 'critical' 

Emily Kovacs, executive director of the Niagara Folk Arts Multicultural Centre in St. Catharines, wants insurance companies to create more inclusive policies and factor in driving history when determining premiums. 

She says that, often, being able to pay car insurance becomes the determining factor of whether people are able to thrive or if they live in poverty.

"Access to a car and transportation is critical," she said. "It is the equivalent to access to housing." 


Lisa Xing is a senior reporter with CBC News in Toronto. Email her at

With files from Victoria Stunt