Private vs. Public Auto Insurance


Here in Alberta, we operate within a private auto insurance system. This means that customers purchase their auto insurance through a private company. Other provinces, such as B.C or Saskatchewan, operate within a public auto insurance system, which means that customers purchase insurance from a Crown agency. Read on to learn a bit more about each system!

Public Vs. Private Insurance

Public Auto Insurance Systems

Benefits of Public Insurance Systems:

  • No shareholders — profit margins aren’t a major concern because there are no shareholders to answer to. This should mean that these savings are passed on to the consumer.
  • No advertising required — if there is no competition among providers, then there is no need to spend money advertising! Again, the assumption here is that these savings will be passed along to the consumer.

Disadvantages of Public insurance systems:

  • Higher taxes — government-run companies require taxpayer subsidies. That means that you may be saving on your insurance, but those savings go right to taxes.
  • Reduced private-sector investment — private businesses invest in their provinces, which boosts the provincial economy. Public companies do not invest the same way private companies do.  
  • Lack of competition — when there is no competition, there is no motivation to try and be the best. What does this mean for you as a consumer? Mainly, a lack of product innovation, incentives, and poor customer service.

Private Auto Insurance Systems


  • Competition drives value – if a customer is not satisfied with their current insurance provider, they have a multitude of other options. This competition places the utmost importance on great customer service and low auto insurance prices to keep client’s happy.
  • Premiums reflect the true cost of insuring a vehicle – in a privatized environment, car & auto insurance premiums are based on factors that affect the frequency and cost of claims, not government pricing.
  • Employment – private markets provide vital investments, jobs and taxes into a local economy.


  • Premiums may be slightly higher due to operating costs – private companies have other factors, like advertising and shareholders, that increase their operating costs.  

Which System is Better?

Regardless of what system your province uses, auto insurance is closely regulated in Canada. Each province or territory determines the minimum amount of insurance required for drivers,

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