Kim Wesley

A History of Auto Insurance

March 1, 2018 was the 40-year anniversary of Quebec’s Automobile Insurance Plan. While this legislation has changed the lives of millions of drivers across the province, few know its full scope. This reform, which greatly contributed to facilitating the auto claims process, is still considered to be one of the greatest laws passed in modern Quebec history.

Although many years have passed since the plan was established, it remains a great mystery for most Quebecers. To understand how it currently operates, it is important to first know that in Quebec, there are two auto insurance components: a private plan that covers property damage and the public plan that covers bodily injury.


Before 1978, Quebecers had to purchase a private insurance policy that covered both bodily injury and property damage. The system was based on the concept of liability. To obtain compensation for injury and for vehicle damage, legal action had to be taken against the person responsible for the accident.

As a result, most people faced long judicial processes, and, due to the complexity of the system, they did not always receive fair compensation. The simplest cases were settled quickly by insurance companies, but the more complex ones stretched out over quite some time, to the point that victims ultimately received nothing at all. The plan mainly benefitted shareholders of large insurance companies and the attorneys involved, as 50% of their practices at the time were devoted to auto insurance.

A controversial reform

In 1976, the Parti Québécois, headed by René Lévesque, promised the public that it would create an auto insurance institution and introduce a legislation reform based on a globally unique model. It proposed a system that universalized compensation, irrespective of liability. In other words, all those involved in accidents would have the right to compensation, whether or not they were at fault. This legislation is now known as the no-fault policy. People would therefore be fairly compensated, by the Crown Corporation and not by their private insurer, based on compensation scales. As a result, no one is penalized. This eliminated unfair legal processes in which those with access to the best lawyers were favoured.

Minister Lise Payette, who was responsible for the project at the time, first had in mind a bill for a public plan that would cover both bodily injury and property damage. However, a near majority of the cabinet, insurance companies, and the Barreau du Québec opposed to this plan. To reach a consensus, they agreed to drop the section on property damage and only keep the section on bodily injury. At this point, Lise Payette, supported by Lucien Lessard, the Minister of Transportation at the time, and René Lévesque, succeeded and obtained approval. However, Payette still had to convince the public of the benefits of the reform. The major concerns were associated with the costs of the program, since it was difficult to evaluate its effect on insurance premiums. Overall, it was estimated that the majority of people would benefit. Over time, Quebecers understood the positive impact of the project and its benefits.

That is why, today, all Quebecers have access to a public automobile insurance plan to cover them in the event of injury or death resulting from an accident, no matter who is at fault. In addition, the plan covers accidents that take place in Quebec and elsewhere in the world, and covers drivers, passengers, cyclists, motorcyclists, pedestrians, and any other road users.

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Kim Wesley Personal-Lines Director
Damage Insurance Broker
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