Economical car insurance refers to coverage offered by the Canadian insurer formerly known as Economical Insurance, which is now operating under the name Definity Insurance. This company provides mandatory auto insurance coverage required by law across Canada, including third-party liability, accident benefits, and direct compensation for property damage. Economical, now Definity, rewards safe and loyal drivers with potentially better rates and offers coverage through a network of over 27,000 authorized insurance brokers. Understanding this provider's offerings is part of finding economical car insurance, which for many Canadians means securing the legally required protection at a competitive price.
What Economical Car Insurance Covers
Economical car insurance, now provided by Definity Insurance, offers the mandatory coverage required by provincial law across Canada. The foundational components of any policy include third-party liability coverage, which protects you if you are found legally responsible for injuring another person or damaging their property. Accident benefits coverage is also mandatory and provides compensation for medical treatment, income replacement, and other expenses if you or your passengers are injured in an accident, regardless of who is at fault. Direct compensation for property damage allows you to claim from your own insurer for vehicle repairs if you are not at fault in an accident in a province with a direct compensation system. Uninsured automobile coverage protects you if you are involved in an accident with a driver who has no insurance or is a hit-and-run driver.
Beyond these mandatory elements, drivers can choose to add optional coverages to their Economical policy through their broker. Collision coverage pays for damage to your own vehicle resulting from an impact with another vehicle or object. Comprehensive coverage protects against losses from non-collision events like theft, vandalism, fire, or falling objects. Additional endorsements can be purchased to tailor the policy, such as coverage for specific perils or increased limits for certain protections. The company also notes it can cover legal fees if a policyholder is being sued in relation to a covered incident. For commercial auto insurance needs, such as participating in car sharing platforms like Turo, Definity provides coverage in Ontario, Alberta, Quebec, Nova Scotia, Prince Edward Island, Newfoundland, New Brunswick, and the Yukon.
How to Purchase a Policy
Economical Insurance, operating as Definity, does not sell its insurance products directly to consumers. To obtain a quote or purchase a policy, you must work through a licensed insurance broker. There are over 27,000 insurance brokers across Canada who are authorized to sell Economical insurance products. These brokers operate independently from the insurance company and have access to products from multiple providers, allowing them to offer comparative advice. You can initiate contact with a broker by phone, visiting a brokerage office in person, or by using online quoting tools provided by brokerages.
The process typically involves providing personal and vehicle information to the broker, who will then shop the market. The broker will obtain quotes from Economical and other insurers they represent, then present you with the coverage options and prices. After reviewing the options together, you and the broker will choose a policy that meets your needs and budget. The broker will then finalize the policy paperwork on your behalf. This broker-mediated model is designed to provide consumers with professional, unbiased advice and to simplify the shopping process, though brokers are paid on commission.
- Contact a licensed insurance broker by phone, in person, or online.
- The broker shops the market and obtains quotes from Definity and other insurers.
- Review the coverage options and prices presented by the broker.
- Choose a policy that meets your needs and budget with the broker's assistance.
- The broker finalizes the policy paperwork on your behalf.
Company History and Transition to Definity
The company originally known as Economical Insurance has a long history in the Canadian market, having been founded in 1871. It was initially created to protect farmers in the Kitchener, Ontario area from the financial devastation of barn fires. Over its long operation, the company expanded from its agricultural roots to sell a wide variety of personal and commercial insurance products across the country. The firm built a reputation over many decades, establishing a large network of broker partnerships that form its exclusive distribution channel.
In a significant corporate rebranding, Economical Insurance is becoming Definity Insurance. This change represents an evolution in the company's name and branding, but its core business operations and commitment to providing insurance protection remain unchanged. The company continues to focus on helping protect Canadian homes, vehicles, businesses, and families. Policyholders can still manage their policies and information through self-serve options, pay invoices online, or use services like the BrokerLink Insurance App. The 24-hour service line for auto and non-surety business policyholders remains active at 1-800-607-2424.
- Founded in 1871 in Kitchener, Ontario.
- Originally created to protect farmers from barn fires.
- Now sells many types of insurance across Canada.
- Economical Insurance is becoming Definity Insurance.
- The 24-hour service line is 1-800-607-2424.
Comparing Quotes and Finding Competitive Rates
Finding economical car insurance in Canada often involves comparing quotes from multiple providers to ensure you are getting appropriate coverage at a competitive price. Since Economical policies are only available through brokers, a broker can perform this comparison on your behalf as they have access to quotes from Economical and dozens of other insurance companies. Online comparison tools also exist that can provide quotes from over 50 Canadian car insurance providers, including potential quotes for Economical coverage, though a broker must finalize the sale. These tools typically require you to answer questions in a web form about your driving history, vehicle, and coverage needs before displaying comparative quotes.
Definity Insurance states that it rewards smart, safe, and loyal drivers with better rates, indicating that driving behaviour and claim history are key factors in their pricing. When comparing, it is important to look beyond just the premium price and consider the level and specifics of the coverage being offered. Some insurers may provide specific endorsements or discounts that others do not, such as extensive water protection or alumni and professional discounts. A broker can help explain the differences in policies and recommend cost-effective solutions that match your specific situation and budget. The benefit of working with a broker is that they shop the market and sift through policies, though their commission may sometimes be reflected in the final price.
Rules for Canadian Residents and Travel
Auto insurance policies from Canadian providers, including Definity, are designed for Canadian residents. Most Canadian insurance companies will only insure individuals who maintain permanent residence in Canada. If you are planning to move your permanent residence to the United States, you must speak with your insurance broker to make appropriate arrangements, as your Canadian policy may not remain valid. This residency requirement is a standard condition across the industry to properly assess risk based on local driving laws, claims environments, and repair costs.
For temporary travel, such as driving your Canadian-insured vehicle into the United States for a vacation, your Canadian auto policy typically provides the coverage mandated by your province. However, it is crucial to verify the specifics of your policy's territorial limits with your broker before crossing the border. The policy should outline how far into the U.S. you may travel and for how long while remaining covered. Ensuring you have appropriate documentation, such as a valid Canadian insurance pink card or proof of insurance, is also necessary when driving in another country. Failure to maintain Canadian residency or to adhere to travel limits specified in the policy could result in a claim being denied.
Common Types of Insurance in Canada
Insurance in Canada is a legal contract, known as a policy, between an individual and an insurance company. In exchange for regular premium payments, the company provides financial protection against specific unforeseen losses. The policy acts as a financial safety net, compensating the policyholder for risks like accidents, property damage, or illness. The most common categories of insurance are car insurance, home insurance, life insurance, business insurance, and travel insurance. Each category addresses different risks, and some, like auto insurance with its mandatory components, are required by law.
Definity Insurance, formerly Economical, offers products across several of these major categories. For personal insurance, they provide auto, home, and tenant insurance. For commercial clients, they offer business insurance products including commercial auto, commercial property, and commercial liability coverage. Reflecting their historical roots, they also maintain a farm insurance division offering products tailored to the agricultural industry. This range allows brokers to offer multiple lines of coverage from a single provider, which can sometimes lead to bundling discounts for customers who insure both their car and home with the same company.
- Car insurance (mandatory for drivers).
- Home insurance.
- Life insurance.
- Business insurance.
- Travel insurance.
- Farm insurance (from Definity's agricultural roots).
Frequently asked questions
How do I get an Economical insurance quote?
You cannot get a quote directly from Economical (Definity). You must contact a licensed insurance broker, as the company sells all its policies through the broker channel. You can find a broker by phone, visiting a brokerage office, or using an online brokerage quoting tool. The broker will ask for your information and obtain quotes from Definity and other insurers they represent to provide you with comparison options.
What is Economical car insurance?
Economical car insurance refers to auto insurance policies offered by the company formerly known as Economical Insurance, which is now operating under the name Definity Insurance. This Canadian insurer provides the mandatory coverage required by law, including third party liability and accident benefits, along with optional coverages like collision and comprehensive. The company, founded in 1871, sells its policies exclusively through a vast network of over 27,000 licensed insurance brokers across the country. You can obtain a free quote for Economical auto insurance and compare it with quotes from over 50 other Canadian providers using online tools. It is important to work with a broker to review your specific coverage needs and ensure you are getting appropriate financial protection for your vehicle.
Is Economical Insurance now called something else?
Yes, Economical Insurance is becoming Definity Insurance. This corporate rebranding does not change the company's core operations or its commitment to protecting Canadian homes, vehicles, businesses, and families. Policyholders can still manage their existing policies and access service through established channels. For assistance, auto policyholders can call the 24 hour service line at 1 800 607 2424. The transition to the Definity name represents an evolution of the brand, but the insurance products and the requirement to purchase them through a licensed broker remain consistent.
Does Economical offer discounts for safe drivers?
Definity Insurance, the company formerly known as Economical, states that it rewards smart, safe, and loyal drivers with better rates. This indicates that maintaining a clean driving record and demonstrating responsible driving behaviour can contribute to more economical premium pricing. While specific discount programs should be discussed directly with your insurance broker, the company's policy suggests that safe driving is financially incentivized. A broker can shop the market and compare rates from multiple providers, including Definity, to help you find a cost effective solution that matches your budget and rewards your safe driving history.
Can I buy Economical insurance if I drive for Uber or Turo?
Definity Insurance provides commercial auto insurance products that can cover participation in car sharing platforms like Turo. This specific commercial coverage is available in several provinces and territories, including Ontario, Alberta, Quebec, Nova Scotia, Prince Edward Island, Newfoundland, New Brunswick, and the Yukon. It is crucial to speak with a licensed insurance broker to obtain the correct commercial policy for such activities, as a standard personal auto policy would not provide adequate coverage. A broker has the expertise to access these commercial products from Definity and other providers, ensuring you have the proper financial protection while using your vehicle for car sharing services.
What happens to my Economical policy if I move to the United States?
Most Canadian insurance companies, including Definity (formerly Economical), only insure Canadian residents. If you are planning to move your permanent residence to the United States, you must talk to your insurance broker as soon as possible. Your current Canadian auto insurance policy will likely not remain valid once you establish permanent residency outside of Canada. Your broker can provide guidance on the necessary steps to cancel your Canadian policy and help you understand that you will need to arrange for new auto insurance that complies with the laws of your new state of residence in the US.
Sources and further reading
- Compare Cheap Insurance Quotes in Canada ratehub.ca
- Get Economical Insurance Quotes For Home, Auto & More thinkinsure.ca
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.