I began reading a lot of car reviews last winter; by spring, I was test driving vehicles. My family first came to Canada on a temporary visa in 2021 and financed our first car, a Bronco Sport, at a steep interest rate (newcomers with no credit history don't get much choice). Now that we're more established here, we decided to trade in the Bronco for an upgraded car and a lower-interest loan, and after trying out multiple cars, from Fords to Volvos to Audis to Mazdas to Kias, we finally settled on the Hyundai Palisade.
We test drove the Palisade on a Sunday evening and decided on the spot. It was within our budget, my partner liked the tech, and I liked the interior, so we booked delivery for the coming Friday. Then I went home to sort out our insurance.
Insurance is a huge factor in buying a car, but I hadn't even considered it during my search. Why doesn't anybody tell you what your insurance will actually cost before you agree to buy the car?
I called my insurer on Tuesday. I was paying $272.66 a month on the Bronco, and I'd braced myself for my premium to go up by maybe $20 or $30 – $50 at most. But they quoted me $462.66 a month for the Palisade, almost $200 more! I could barely wrap my head around it. I told them I couldn't afford that and hung up. I'd have to cancel my new car.
I called my Hyundai sales agent the next morning to let him know I was considering cancelling, as my insurer had cited both the car's safety rating and the model's cost to repair for the higher premium. The sales agent advised me to shop around, so I called half a dozen insurers, then went down a Reddit rabbit hole to see if I was the only one dealing with this; many others were in similar situations, but for different reasons. It felt like the insurers had first decided to charge me a higher premium and then invented a reason for it. I even got quotes for other cars we'd test-driven, including a Volvo – it was even more expensive to insure than the Palisade.
After a few days of calls and my Reddit deep dive, I finally settled on a premium with Allstate: we'd be paying $4,293 a year, about $85 more a month than before. I had home and auto with my old insurer, so I had to move both to Allstate to get a discount on the combined premium; I also had to install an app that tracks my driving to bring my rate down. I don't love it (it feels like someone's watching me), but I can't afford the premium without it. An extra $85 a month is no joke, but it's not impossible either, especially compared to the first quote I received.
After this whole convoluted process, I couldn't stop thinking that there had to be a better way. Insurance is a huge factor in buying a car, but I hadn't even considered it during my initial search. Why doesn't anybody tell you what your insurance will actually cost before you agree to buy the car?
That's when I learned about embedded insurance, something I hadn't heard of before working on this story. Tesla sells its own policies directly, and many European dealerships sell insurance, too. And earlier this year, Chinese automaker BYD partnered with the insurtech platform Bolttech to offer motor insurance to buyers at the point of purchase across the UK, France, Germany, Italy, and Spain. I'm not naturally a fan of bundled selling – marketers will push whatever will earn them the highest commission – but after my ordeal, I could see the appeal.
Depending where you live and what car you're buying, embedded insurance can mean different things. Ontario is currently piloting a system that would let licensed brokers sell car insurance at dealerships. Tesla goes further, using your actual driving data (how you park, how hard you brake, etc.) to set the price of the premium. And Quebec, before its planned ban, let dealers sell a narrower type of coverage called replacement insurance, which covers the difference between what your insurer says your car is worth and what it actually costs to replace it.
Jordan Solway, senior manager of the auto and insurance sector at Ontario's Financial Services Regulatory Authority (FSRA), explained how the province's system differs from Tesla's insurance model. "That is a different model of distribution. That's truly embedded insurance where it's in the vehicle," he said. What Ontario is piloting, through something called a Test and Learn Environment (TLE), is insurance sold at the dealership through a licensed broker, not the dealership itself.
The prohibition on dealer-sold insurance was always about the risk that dealers would pressure buyers into buying insurance as a condition of the sale, a practice known as tied selling.
The TLE is also distinct from a third model, the subscription model where a vehicle and insurance are bundled into one monthly fee, like Porsche has done in some markets and which FSRA covers under separate guidance. I could picture it: walking into the Hyundai showroom after my test drive, sitting down with a broker, getting a quote I was actually happy with, and signing the paperwork right there.
But it's not that simple (is it ever?). Even at the dealership, I may not get the best price on insurance, and I still might need to shop around.
The prohibition on dealer-sold insurance, Solway said, was always "predicated on concerns about consumer harm" – specifically, the risk that dealers would pressure buyers into buying insurance as a condition of the sale, a practice known as tied selling. That's essentially what happened in Quebec. The province didn't give dealerships carte blanche when it introduced embedded insurance; it only allowed dealers to sell replacement insurance. But the province's regulator found dealers pricing it higher than other brokers, documenting cases of high-pressure and sometimes fraudulent sales tactics, a textbook example of tied selling. Quebec is banning dealer-sold replacement insurance, starting on January 1, 2027.
Ontario is trying to avoid the same mistake. One of the biggest guardrails of its pilot program is that auto insurance is only sold through a licensed insurance agent, broker, or company, so a dealer can't use similar high-pressure sales tactics as was observed in Quebec. But FSRA has also said it will “assess each proposal individually,” meaning the protection consumers get will depend on what actually gets approved, not a blanket solution for everybody. FSRA is watching for problems to fix and loopholes to close rather than trying to fully solve the problem from the jump.
Staying loyal to my current insurer might come with perks, but the premium I'd pay for them isn't worth it.
While Ontario and Quebec have opposing perspectives on embedded insurance, BC is taking a third path. It's neither banning dealer insurance nor expanding it; instead, in 2027, the province is introducing a new licensing requirement for dealers who sell add-on products like credit protection and warranty insurance. BC doesn't call this 'embedded insurance,' but the province runs a broker-at-dealership model for basic coverage: auto insurance must go through the Insurance Corporation of British Columbia (ICBC)'s network of Autoplan brokers, and dealers are barred from taking any kickbacks or rewards for insurance sales. Four other provinces (Alberta, Saskatchewan, Manitoba, and New Brunswick) already have similar models in place.
Adam Mitchell, an insurance broker at Mitchell & Whale in Whitby, Ont., confirmed what I'd already experienced: "If you don't look around either at interest time or renewal time, there's no chance you're optimized," he said. I'd thought staying loyal to one insurer would benefit me, but not necessarily.
I had to ask: How do I know that insurance brokers like you won't steer me toward whatever pays the highest commission? Mitchell pushed back: "I'm not biased," he said. "It doesn't matter to me where you buy it from. I'm going to get paid no matter where you buy." He's also bound by the Registered Insurance Brokers of Ontario (RIBO), which requires licensed brokers to disclose their commission and to present the lowest available premium for every option, not just the ones that pay the best.
Then Mitchell told me something surprising, at least to me: Different insurers are optimized for different age profiles. Some are designed around Boomers, some around millennials, some around Gen Z. If a car manufacturer locks every buyer into the same insurer, anyone outside that insurer's target demographic will end up paying more than they should. Mitchell compared a broker with access to every insurer to a golfer with a full set of clubs: "Every once in a while, that's going to be the exact perfect club for the exact right shot. But the reason they give you 14 other clubs is you have a lot of other scenarios."
If a car manufacturer locks every buyer into the same insurer, anyone outside that insurer's target demographic will end up paying more than they should.
His proposed fix: "The only solution is for [dealerships] to partner with digitally enabled brokers that can fulfill the customer journey they want to fulfill while equally shopping the market to give the car buyer transparency in the rate and in the competition," Mitchell said. Translated, he means that dealers should work with online brokers who check every insurer's price, then show buyers exactly how their quote compares. Clearly, it's a bit of a pitch for Mitchell's own business, but it's not totally off base, either – it does make sense to have one place that'll scour the whole market for you, so you and I, the buyers, don't have to.
I'd prefer that version of embedded insurance, where a broker looks at the whole market for the best product for my situation, not the one where a dealership pushes one particular insurer on me. I really hate spending hours on the phone with insurers; in my experience, a single call for a quote can easily run 75 minutes. Staying loyal to my current insurer might come with perks, but the premium I'd pay for them isn't worth it. And the fact that my age group determines which insurer is best for me is yet another reason not to handcuff myself to just one.I want to know who's selling the insurance, whether it's the dealership, a broker, or a manufacturer, and I want to know whether they're earning a commission on it. And I don't want it tied to my decision to buy the car.
That's really all I'm asking for: transparency. And above all, if the rate doesn't work for me, I want the freedom to walk away.
