Canadians who move overseas for a period of time say when they return home, they’re quoted auto insurance rates a new driver would pay because some insurance companies aren’t factoring in their previous driving experience within Canada or abroad.
“It’s definitely not fair,” said Lester Alberts, who worked in the oil industry in Saudi Arabia for seven years before returning to Calgary in 2020.
When he came back, he said, he tried to get auto insurance, but the first two insurers he approached quoted him roughly $3,500 a year.
“They just said, ‘If you’re not insured in Canada, then we just take you as a new driver.'”
Alberts is one of several people CBC News spoke with who said they were quoted high auto insurance rates after they returned from living abroad.
The industry needs to be better regulated, they said, so consumers don’t have to spend time shopping around for the cheapest rate, considering that auto insurance is mandatory. Some were paying $6,000 a year for two vehicles up until a month ago, when they found a better rate after shopping around.
CBC News previously reported that newcomers were being quoted high rates because previous driving experience from many parts of the world isn’t factored into their premium.
‘We had no violations, no accidents’
Alberts said he had insurance paperwork showing a clean driving record in Saudi Arabia, but the companies did not take that, or his previous Canadian driving record, into consideration.
“We had no violations, no accidents, so we never used insurance,” he said. “So it’s quite surprising that nothing was considered.”
Eventually, Alberts said, he found a plan that charged $2,300 a year.
Carolynne Smith, a retired diplomat with the federal government who’s one of the four Canadians who spoke with CBC News, said almost every time she returned from a deployment overseas, she was quoted as a new driver when trying to get insurance in Ontario, which has a private insurance system.
It didn’t happen on the occasions she returned to live in British Columbia, which operates under a public system.
“They never gave an explanation. It was talking to a brick wall,” Smith said. “There’s no discussion. There’s no negotiation. That’s it.”
For most of the deployments, she was in her 30s and 40s. She last returned in 2001, and said initially, she couldn’t even find an insurer in Ontario who would take her on, calling it “infuriating.”
“I’ve been driving since I was 16 and have a clean record,” Smith said.
New driver’s licence number can impact rate
The Insurance Bureau of Canada (IBC) said different companies have different rules for Canadians returning from abroad.
“Different insurers account for years licensed and driving experience differently, depending on the country and how long you have been away,” an IBC spokesperson said in a statement. “It varies by jurisdiction and length of lapse in coverage.”
The Financial Services Regulatory Authority of Ontario, an independent agency that regulates multiple sectors, including property and casualty insurance and mortgage brokers, said if an insured driver in Ontario has maintained an “active” driver’s licence in the province, they should not be classified as a new driver.
“However, if a driver allows their licence to lapse for more than 12 months, it may impact the premium charged by the insurers,” the agency said in a statement.
Morgan Roberts, vice-president of RH Insurance, which is affiliated with Ratehub, said consumers need to shop around. “It 100 per cent depends on the company, and it depends how long you’ve been out of the country,” she said.
Roberts said experience in the United States is generally taken into account, provided the person is able to get what’s called a “letter of experience” detailing their driving history.
As for someone’s previous driving history within Canada, sometimes that isn’t taken into account if the person receives a new driver’s licence number when they return, the IBC said, because there is no driving history attached to that new number.
The bureau said obtaining a Driver and Auto Search History (DASH) or Autoplus report — both policy and claims information systems — with the prior driver’s licence information can provide a more accurate history.
Public and private systems differ
Typically, the IBC said, provinces with private insurance systems, such as in Ontario and Alberta, operate similarly when it comes to factoring someone’s driving history in Canada and abroad when a Canadian returns home.
There are different rules for provinces with public insurance systems. For example, Manitoba drivers returning to the province after less than 10 years away will be placed on a Driver Safety Rating scale at the same level they were at when they left. After 10 years, though, the driver would start at zero on the scale.
Auto theft has become so widespread and costly that some insurers are urging owners to install tracking devices or face higher premiums.
In Saskatchewan, drivers earn discounts through a Safe Driver Recognition program. A person returning to the province would be treated as a new driver if their position on the scale was in the neutral or penalty zone. If they had a discount when they moved, they would be eligible for the same discount when they return.
If a person who previously held a B.C. driver’s licence is returning to the province, insurance is calculated based on the date of their first B.C. driver’s licence.
Lester Alberts, who returned to Calgary from Saudi Arabia, said the private systems need to be streamlined and further regulated.
“You shouldn’t have to shop around for insurance, he said, “because it’s one of the higher-priced things that we do have to pay for.”