Thursday, September 16

Public vs. private auto insurance

In February, I bought my first car in Ontario — a used 2009 Ford Focus. The dealer took care of the plates, and I took care of insurance.

Since auto insurance is private in Ontario, I searched online for the company that would give me the best price. After a phone call, and a fax that showed I owned the car, the transaction was done and the insurance company sent me proof of insurance papers in the mail.

It was simple. It took very little time. I didn't have to sign anyone or talk with anyone face-to-face.

At the beginning of the summer, I drove my car back to B.C. for a summer job. Thus, I had to get my car insured in B.C., where auto insurance is provided through the public Insurance Corporation of British Columbia. The bureaucracy of the process was stunning.

First, you have to have your vehicle inspected. This is separate from AirCare, which is an inspection program for older cars to ensure they don't pollute excessively. Even if your car is almost new, like my 2009 model, you must have your vehicle inspected. This costs a little over $100 and takes about an hour. Not surprisingly, my vehicle passed with flying colours. Why this test is required for newer vehicles is beyond me.

Next, you have to fill out paperwork (it's called a transfer form) that says you are selling the vehicle to yourself, for a purchase price of $0. I think the purpose of the form is to register your address change, since you put your Ontario address in the seller's information field, and your B.C. address in the buyer's information field. Why a standard change of address form isn't used is beyond me.

When selling the car to yourself, you must also pay the B.C. government PST on the value of the vehicle (not the purchase price of $0), which can amount to hundreds of dollars in tax. This is a ridiculous requirement, since I had already paid PST on the vehicle when I bought it in Ontario (and at 8% instead of 7% too). There is an exemption called "settler's effects" that an insurance broker can grant you if you are "settling" in B.C. permanently from another province. However, the exemption does not apply if you are in B.C. temporarily (such as for a summer job). My insurance broker said I'd have to pay PST to the B.C. government on my car, unless I contacted the government's "consumer taxation branch," asking them to give me a special exemption and rubber stamp (literally) my paperwork. She said they'd have a Victoria office I could go to, handed me a phone number and sent me away.

I called the consumer taxation branch. It turns out they only have an office in Vancouver. They sent me back to my insurance broker and told me I had to fax in my transfer form, along with a piece of paper from my employer that showed I was only working for the summer. Then, within two days, they'd stamp my transfer form and fax it back to my broker. In the only pleasant surprise of the ordeal, it only took them about three-quarters of a day to stamp my paperwork.

Before you can purchase insurance in B.C., an insurance broker must leave their office, go out to their parking lot, and physically look at your vehicle identification number (I guess to ensure you're not lying about it). This seemed strange, because nobody came to look at my car in Ontario. I also discovered the hard way that some offices refuse to have brokers go out to a parking lot to look at a car after 4 p.m. — even if their offices don't close until later into the evening. Granted, perhaps this is a safety issue in the winter. But this is summer, where it is light out until 8 or 9 p.m. Luckily, not all brokerage offices were this foolhardy.

Finally, I was able to buy insurance (but I did need to bring a bajillion papers — my Ontario licence, my Canadian passport, my transfer form, my inspection report and my ownership papers). All in, it took me well over a full day's labour (probably closer to two) to get my car insured in B.C. And I was only there for 3.5 months. The bureaucracy and inefficiency of the process compared to Ontario was mind-boggling. B.C. could definitely benefit from looking to Ontario for ways to take some of the needless hurdles out of their auto insurance system.

11 comments:

  1. really good information about public and private vehicles...
    thanks for sharing...

    ReplyDelete
  2. Hey,

    Doing the same thing - but backwards. Had public auto insurance from a different province, and trying to get private insurance in Ontario is ridiculously difficult. They need so much paperwork, and getting a hold of a real person at the Ministry of Transportation (instead of recorded messages) is nearly impossible. So, if you have any questions about what you even need to start the process - good luck!

    Overall, I think this has less to do with private vs. public and more to do with switching auto insurance and getting new plates in a different province. In my opinion, the insurance providers should do all of the paperwork.

    ReplyDelete
  3. Interesting. I'll be doing the B.C. -> Ontario switch in a week or two so I'll be having the same headaches as you I guess.

    The problem is there shouldn't be so much paperwork. Ontario and B.C. are all similar first-world jurisdictions IN THE SAME COUNTRY; if you have a car up and running in one, you shouldn't have to do a whole bunch of crazy paperwork just because you want to use your car in the other jurisdiction. Ontario's standards should be good enough for B.C. and vice versa.

    ReplyDelete
  4. Why didn't you just keep the Ontario insurance for those 3.5 months? My old roommate kept her Saskatchewan insurance for YEARS while she lived here.

    ReplyDelete
    Replies
    1. If you cheat like your friend and are at fault in an accident with serious injuries. You will sign away the rest of your life. Your insurance is null and void since the vehicle was not being driven in the territory it was insured for.

      Delete
  5. Two reasons:

    1. My understanding is it would have been illegal to do so. If you are living in B.C. for 30 days, even temporarily, you are required by ICBC to change over your insurance and plates.

    2. The B.C. insurance turned out to be way, way cheaper than Ontario insurance.

    ReplyDelete
  6. I can see that it is really mind boggling. Unlike having it done all through internet like auto insurance in Palm Springs. But sometimes we have no choice but to comply with the bureaucratic policy. That is why my mother would rather live in Palm Desert (insurance) rather than moving with us here in France. She never likes paper works and long processes. She always wants everything to be done short and simple.

    ReplyDelete
  7. Great. Thanks for sharing your experience as I am in the process of purchasing a car too and wanted to have a policy for it. I have learnt so many things from your experience that will probably help me out. I think the best way to have an insurance policy is online as one can get a cheaper policy over there.

    ReplyDelete
  8. Your anecdotal comparison of public vs private auto insurance is idiotic if not flawed. Do you really think someone from B.C. moving to Ontario and trying to register their B.C. vehicle in Ontario is going to go through a less bureaucratic process? The vehicle inspection is required regardless of which province your moving to, even Ontario. The sales tax issue is the same in Ontario. The VIN is inspected by the broker in B.C. in order to cut down on fraud by unscrupulous people trying to register stolen vehicles from other provinces or vehicles with stolen VIN plates or vehicle ownership. Maybe you should do a little more research about why things are done the way the are instead of making off the cuff comments about an isolated experience.

    ReplyDelete