How to get proof of insurance before buying a car

Before buying a new or used car, it's a good idea to start shopping around for auto insurance. In Canada, car insurance is mandatory, so every vehicle registered here must have coverage. But you’ll need proof of insurance before you can even register your vehicle. Plus, you can't drive your new car off the lot without it. So, what is proof of insurance, and how do you get it? Let's find out.

What is proof of insurance?

There are several situations where you may find yourself needing to show proof of insurance. One of these includes registering a new vehicle. This document often called a pink slip, confirms that you have a valid auto insurance policy that meets your province's minimum liability requirements, such as third-party liability and accident benefits coverage. It provides key details so anyone checking it can verify your coverage.

While a liability slip is the primary document used to show proof of insurance, it's not the only option. You can also use a temporary car insurance binder as proof of coverage. Plus, both physical and digital copies of liability (or pink) slips are now accepted in several provinces and territories. So, if you don’t have that little pink paper handy, you can easily show a digital version on your smartphone instead. Typically, your proof of insurance includes:

• The insurance company’s name and contact information
• The policy number and effective dates of coverage
• The insured vehicle’s make, model, trim, and vehicle identification number (VIN)
• The name(s) of the insured driver(s)

How to get your proof of insurance card

Once you buy an insurance policy, your insurance company will send you proof of coverage. It's really that simple. Depending on the company, you might get it by mail, fax, or email. Sometimes, your insurer will issue a temporary pink slip to use until your official one arrives.

These days, you can also receive your insurance slips electronically if you live in one of the following provinces or territories:

• Alberta
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Ontario
• PEI
• Quebec
• Yukon

Be certain to check with provincial regulations to see if regulatory bodies will accept digital liability slips. If you don’t get your proof of insurance, be sure to contact your insurance company to make sure you have the right documentation.

Can I buy car insurance before buying a car?

Yes, since it's illegal to drive without insurance, you'll usually need to buy insurance before officially owning the car. Generally, it's best to wait to purchase car insurance coverage until you've decided on a car. That way, when your insurer asks for your personal details and information about the vehicle, you can give them the make, model, trim, and VIN (Vehicle Identification Number). This way, they can provide you with a car insurance policy with the coverage you need to drive legally after you buy the car.

Can I get same-day car insurance?

Most likely, yes! Same-day car insurance is pretty common because processing is usually quick. If you buy insurance online or over the phone, your coverage can start within an hour or two. So, if you’re at the dealership and find a car you want, you can apply for insurance and probably have coverage and proof of insurance within a couple of hours.

However, you'll want to keep in mind that it's always best to shop around for car insurance, which means same-day car insurance may not be the best option. When you take the time to shop around, you can receive multiple quotes from several insurance companies to find the best one that meets your needs and budget.

It may also be a good idea to work with an insurance broker. Car insurance brokers often work with the top insurance companies in your area and can do the insurance shopping for you. Plus, they can sometimes find discounts on your insurance you may not know you qualify for, saving you money.

How do I register my newly purchased car?

In Canada, you must register your car before driving it. Luckily, if you're buying from a dealership, they usually handle the registration process for you, including submitting the paperwork to your province or territory’s Ministry of Transportation.

However, if you're buying from a private seller and you need to register the car yourself, make sure you follow your province or territory’s process. For example, in Ontario, you’ll need to visit a ServiceOntario centre. Every province and territory will ask for certain documents, like proof of ownership, valid ID, and proof of insurance, so it’s always a good idea to check the local guidelines beforehand.

When might I need proof of insurance before buying a car?

You may or may not need proof of insurance if you're buying a car from a dealership, a private seller, or taking out a loan. It all depends on the situation. Below, we will explore each situation:

When buying from a dealership

Most dealerships won’t let you drive your new car off the lot without proof of insurance, even if you paid in cash. They want to make sure you're covered before you hit the road.

If the dealership financed your purchase, it’s pretty much guaranteed that they’ll require proof of insurance before handing over the keys. Otherwise, you’ll have to leave the car there until you can provide it. Some dealerships offer insurance themselves, which can be convenient, but it’s not always the best deal in terms of cost or coverage. Nonetheless, an important question to ponder is:

What if this isn't my first car?

If you're buying a car for the first time, you'll need a complete insurance policy before driving it off the lot. But if you're replacing a car, many car insurance companies offer a grace period, usually between 6 and 14 days. During this time, your new car will be covered even if you haven’t informed your insurance agent yet.

However, the exact length of the grace period depends on your insurer, and it’s typically only applicable if you paid cash for the car and your current policy includes a grace period clause. This coverage may also only reflect the amount of coverage that you had on your previous vehicle; for example, if you only carried liability insurance on your old vehicle and you purchased a brand-new vehicle, you may want to add additional insurance to your brand-new vehicle before you drive it.

When buying from a private seller

If you're buying a car with cash from a private seller, you don’t need to show proof of insurance to complete the sale. However, you will need insurance in order to drive that vehicle home. Remember, car insurance is mandatory in Canada, and driving without valid car insurance can lead to significant fines and penalties.

When taking out a car loan

If you need to get a loan to purchase a car, you're not alone. Many people need a loan to buy a car, and most lenders require you to have not only auto insurance but physical damage coverage auto insurance, including collision and comprehensive coverage. This is often referred to as “full” coverage insurance. They want to make sure the car is fully protected in case of an accident since, technically, they own the vehicle until you’ve paid off the loan.

Purchasing car insurance

There are several types of auto insurance to consider when buying car insurance. Some are mandatory, like liability insurance, while others are optional yet still equally important. Here's the rundown on some of these options:

Third-party liability coverage

Third-party liability coverage is a party of mandatory liability insurance and is designed to protect others if you cause an accident. For example, if you’re driving and accidentally rear-ended someone, the other party can file a claim under your liability coverage to help pay for the repairs to their car. It can also cover legal and medical expenses if needed.

Accident benefits coverage

Accident benefits coverage is another mandatory part of liability insurance. It helps with medical costs if someone gets injured in a car accident. Whether it’s you, your passenger, or a pedestrian, this coverage can help pay for medical bills. It may also cover additional expenses, like lost income or funeral costs, depending on the circumstances.

Uninsured motorist coverage

Uninsured motorist coverage may be part of your mandatory liability insurance, depending on what province you live in. This coverage steps in if you get into an accident with a driver who doesn’t have insurance or enough coverage. It also protects you in hit-and-run cases where the driver can’t be identified.

Direct compensation-property damage coverage

If you live in a no-fault insurance province, direct compensation - property damage coverage kicks in when you’re in an accident that’s not your fault and your car is damaged. With this coverage, your insurance company pays you directly for the repair costs, making the claims process quicker and easier. In some provinces, this coverage is optional; check with your local provincial regulations to learn whether or not it is mandatory in your home province.

Collision coverage

Collision coverage is an optional type of insurance coverage that covers the cost of repairs or replacement of your vehicle if you are involved in an at-fault collision with another vehicle or stationary object. Without collision coverage, you'd be left to pay for the repairs or replacement of your vehicle out of your own savings.

Comprehensive coverage

Optional comprehensive insurance steps cover all other damage to your vehicle that's not related to a collision. This includes fire, weather damage, falling objects, theft, vandalism, and damage from hitting a large animal. For example, if a large tree branch falls on your car during a strong wind storm, this coverage would kick in.

Accident forgiveness coverage

Another popular type of optional coverage is accident forgiveness. This coverage helps prevent your insurance premiums from increasing after your first at-fault collision.

What if I lose my proof of insurance card?

The first thing you should do is contact your insurance provider right away to avoid any potential legal issues. If you're pulled over or involved in an accident and can't show valid proof of insurance, you could face fines or other penalties. So, if your proof of insurance is missing, here’s what to do next:

Contact your insurance provider

The first thing you should do is contact your insurance company right away and let them know you’ve lost your proof of insurance card. Ask for a replacement, which they can usually provide quickly since this is a common request. If your province accepts digital pink slips, you might be able to get an electronic version right away, with the paper copy arriving by mail later.

Request a temporary slip if needed

If you need a physical copy of your proof of insurance right away—say, to drive to work—ask your insurance provider for a temporary insurance slip. They can send it to you via email or through your online account, and you can print it out to use until your official slip arrives.

Keep the replacement safe

Once you get your new insurance slip, be sure to keep it in a safe place. It’s a good idea to have one copy in your car or on you at all times and another stored at home, just in case you misplace the first one. If you’re using a digital pink slip, it’s also smart to protect your phone or device with a secure password or biometric lock in case it gets lost or stolen.

Learn more about insurance from BrokerLink

If you want to learn more about proof of insurance and its requirements, reach out to BrokerLink today. Our licensed insurance experts are happy to answer your questions. They can also assist with finding a new auto insurance policy, renewing your current one, or even helping you download a digital proof of insurance card. Plus, we can offer advice on the best coverage for your needs and compare insurance options across Canada to find you the best possible rate.

You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

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