CANADA NON-RESIDENT INTER-PROVINCE MOTOR VEHICLE LIABILITY INSURANCE CARD–POWER OF ATTORNEY AND UNDERTAKING (PAU)

(October 2022)

INTRODUCTION

Canadian insurance authorities require that all persons, citizens, and visitors who operate a vehicle inside its borders be adequately insured. Compared to the United States, the Canadian limit of insurance requirements are much higher. Drivers are required to carry a minimum liability limit of CAN$200,000 except in Quebec where the minimum limit is CAN$50,000.

Different Canadian provinces cap the property damage portion of losses at between CAN$10,000 and CAN$20,000. Certain injuries sustained by persons in auto accidents that occur in Quebec are paid through a special fund. Non-residents who drive in Quebec may be required to arrange their own personal accident or accident/sickness coverage.

INSURANCE CARDS

United States citizens who drive in Canada (except in Quebec) comply with the Canadian version of financial responsibility laws if the driver:

Is insured by a valid insurance company
Is insured with an insurance company that agrees with Canada’s non-resident coverage provisions
Carries a copy of the required Canadian Non-resident Inter-provincial Motor Vehicle Liability Card (commonly known as a "yellow card" or "Canadian ID Card”)

Every United States insurance company that signs the Non-Resident Inter-Province Motor Vehicle Liability Insurance Power of Attorney and Undertaking (PAU) agreement receives a supply of Non-Resident Inter-Province Motor Vehicle Liability Insurance Cards.

Editor’s Note: Many insurance carriers will inform policy holders that this proof of financial responsibility is not needed for driving while in Canada because they have signed the PAU Agreement (explained below). While many Canadian Highway Traffic Enforcement officers may not ask for it, according to the Director of the Insurance Division (Toronto, ON), this card IS a requirement. This is a Canadian and not a USA law; however, the fine can be as high as CAN$5,000 if a non-resident is asked for the card and is not able to produce it. Although it is not required to be produced when entering the county, it may be requested by enforcement officers at any time.

PAU AGREEMENT

Every United States insurance company with policyholders who plan to operate vehicles in Canada must file this agreement. It requires signatory companies to abide by each province’s laws that apply to minimum levels of financial responsibility and other requirements, such as agreeing that filing legal papers with the policyholder is acceptable as legal notice to the insurance company and giving provincial authorities assurance that the proper company representation may proceed with legal actions with the permission of the United States insurance company. In addition, insurance companies must agree not to supply insurance cards to unauthorized persons, such as non-policyholders.

The agreement is essentially a more formal version of the "conformity with statute" provision in most auto coverage forms and policies so policyholders can travel out of state and comply with different states' financial responsibility laws. In addition to obligating insurance companies to meet minimum financial responsibility requirements and to participate in the appropriate legal process in any possible Canadian lawsuit, insurance companies must also agree to ignore legal defenses that cannot be used in Canada.

Agreements must be filed with the Canadian Council of Insurance Regulators. United States drivers who cannot prove that their insurance company signed the agreement face serious consequences, such as fines and having their vehicles confiscated. The text of the actual agreement is reproduced below. When driving in Canada it is also important for United States drivers to have the following:

A copy of the required Canadian Non-resident Inter-provincial Motor Vehicle Liability Card (commonly known as a "yellow card" or "Canadian ID Card”)
Vehicle registration information
If the driver does not own the vehicle, a letter from the owner stating that the driver has his or her permission to operate it in Canada

Editor’s note: The following reproduces the exact text of the PAU form but not in the required format. It is presented here strictly for reference and is not suited or intended for use.

CANADA NON-RESIDENT INTER-PROVINCE MOTOR VEHICLE LIABILITY INSURANCE CARD

POWER OF ATTORNEY AND UNDERTAKING

(Denoting compliance with minimum coverage requirements and facilitating acceptance of service)

(Name of Company)

the head office of which is in the City of (enter city)

in the State/Province of (enter State/Province)

in the Country of (enter Country)

hereby, with respect to

an action or proceeding against it or its insured, or its insured and another or others, arising out of a motor-vehicle accident in any of the respective Provinces or Territories, appoints severally the Superintendents of Insurance* of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Quebec, and Yukon Territory, the Northwest Territories and Territory of Nunavut, to do and execute all or any of the following acts, deeds, and things, that is to say: To accept service of notice or process on its behalf.

"Superintendent of Insurance" means the Superintendent of Insurance or any other provincial or territorial official or Public Body authorized by law or designated by his or her government to accept such service of notice or process.

(Name of Company) aforesaid hereby undertakes:

A. To appear in any action or proceeding against it or its insured in any Province or Territory in which such action has been instituted and of which it has knowledge:

B. That upon receipt from any of the officials aforesaid of such notice or process in respect of its insured, or in respect of its insured and another or others, it will forthwith cause the notice or process to be personally served upon the insured:

C. Not to set up any defense to any claim, action, or proceeding, under a motor-vehicle liability insurance contract entered into by it, which might not be set up if the contract had been entered into in, and in accordance with the law relating to motor vehicle liability insurance contracts or plan of automobile insurance of the Province or Territory of Canada in which such action or proceeding may be instituted, and to satisfy any final judgement rendered against it or its insured by a Court in such Province or Territory, in the claim, action or proceeding, in respect of any kind or class of coverage provided under the contract or plan and in respect of any kind or class of coverage required by law to be provided under a plan or contract of automobile insurance entered into in such Province or Territory of Canada up to the greater of:

(a) The amount and limits for that kind or class of coverage or coverage provided in the contract or plan, or

(b) The minimum for that kind or class of coverage or coverages required by law to be provided under the plan or contracts of automobile insurance entered into in such Province or Territory of Canada, exclusive of interest and costs and subject to any priorities as to bodily injury or property damage with respect to such minimum amounts and limits as may be required by the laws of the Province or Territory.

D. That it will not issue Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Cards to persons other than those who are non-Residents of Canada and who are insured with it under a contract of motor-vehicle liability insurance.

IN WITNESS WHEREOF, the said Company has caused its corporate seal to be affixed thereto duly attested by the hands of its proper officers in that behalf at the

City of (enter City)

in the (enter State/Province) of (enter Country)

this day of A.D. 20__