Will Living Abroad Impact Your Car Insurance Rates?

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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on April 04, 2025

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on April 04, 2025

Visit author page

3 minute read

Article Contents

If you’re a Canadian driver returning home after living abroad, you may not anticipate changes to your auto insurance. That’s right – even if you’ve been driving safely overseas, you might still be subject to sky-high insurance rates. Why?

Gaps in your Canadian auto insurance or licensing history can motivate insurers to consider you a new driver or reevaluate your risk. So, how can you keep your insurance rates reasonable as a returning driver? This guide will show you.

Car Insurance Rates When Living Abroad At a Glance

  • Returning home to Canada after living abroad can affect your car insurance rates because of insurance gaps, expired licences, or a lack of domestic driving history.
  • Documenting your international driving experience, keeping your domestic insurance active, and communicating with your insurer can help keep your insurance rates low.
  • How your insurance rates are affected upon return depends on where in Canada you live.

Why Returning Drivers Face Higher Insurance Costs

When Canadians return home after living abroad, they’re often surprised to see insurance charges as high as $3,000. Let’s review why this happens.

Lack of Recent Insurance History in Canada

Insurers consider gaps in your Canadian insurance record a risk indicator. If you’ve lived abroad for a few years, they may wonder whether you’re still familiar with Canadian driving laws. Regardless of whether you haven’t driven in Canada for a while or just don’t drive often enough, insurers may not recognize foreign insurance history. 

New Driver’s Licence Number Upon Return

If your old licence expires while abroad, you’ll often be issued a new one. Getting a new licence erases your driving history, and you’ll have to start a long-standing accident-free record from scratch. 

Perception as a “New Driver”

With your old record wiped clean, insurers may perceive you as a new or inexperienced driver, bringing up your insurance rates and voiding your eligibility for multi-year driving discounts. You may also lose access to standard insurance markets if you fall under the high-risk category.

Why Living Abroad Impacts Your Car Insurance Rates in Canada

Differences in How Returning Drivers Are Treated Across Canada

How your car insurance rates are affected depends on where in Canada you return to. Each province has a different licensing authority, so your insurance may be regulated privately or publicly. 

Ontario is among the more accommodating provinces, given that your licence has expired for under three years. Fortunately, you can often renew it without retesting. You can also preserve your driving record if you provide the appropriate documentation to the Ministry of Transport. 

Conversely, the public insurer ICBC handles all insurance in British Columbia and can be strict. Depending on how long you’ve lived abroad, the ICBC may require retesting or re-categorizing you into a lower licensing class. 

Here’s where things can get tricky: if you live in a province like Alberta, where the SAAQ manages injury claims publicly and vehicle coverage privately, whether you need to retake road tests may vary. 

How to Keep Your Driving Record Alive While Abroad

If you plan to live abroad for some time, the best thing you can do to keep your driving record alive is to prepare. Here’s what you can do to avoid starting from scratch.

Maintain a Valid Canadian Driver’s Licence

Maintaining a valid Canadian driver’s licence abroad is one of the key steps to take. But how do you do that when you aren’t in your home province? Many provinces allow online renewal or receipt of renewal applications by mail. 

If you’re unsure how long you’ll be away, consider renewing your licence for its maximum term, which ranges from 4 to 10 years. 

Maintain Canadian Insurance

While it may seem counterintuitive, cancelling your insurance policy abroad isn’t a good idea, even when you aren’t using your primary vehicle. If you don’t have local insurance for even a year, insurers may view your re-application as high-risk.

You might consider keeping your vehicle under a storage plan, which costs less than traditional auto insurance. 

Keep Records of Your International Driving Experience

While Canadian insurers might not recognize international driving records, collecting a letter of experience, driving abstract, and proof of licence validity can communicate that you are a responsible driver.

Use International Driver’s Permits Strategically

If you have an International Driver’s Permit (IDP), use it. It won’t be considered a “full” licence, but it can help you drive legally in most countries in the short term. Using your IDP can help you prove continuous driving experience.

Key Advice From MyChoice

  • Review your licence before you leave and consider renewing it for the maximum term to avoid being categorized as high-risk when you return.
  • Document your driving experience abroad, including a translated driving abstract, any claims you made, and your international permit.
  • Inform your insurance company that you’ll be moving abroad temporarily and provide concrete plans for your return.

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