When you’re shopping for car insurance coverage, you have to decide on the type of policy and the coverage. Automobile insurance falls under provincial jurisdiction and rules vary within each province.
At a minimum, you must insure your automobile for $200,0000 third-party liability coverage and basic accident benefits coverage.
Mandatory Car Insurance Coverage
The mandatory coverage of your policy should at a minimum include the following below:
Accidental Benefit Coverage
Accident Benefits coverage provides monetary and medical benefits to parties in a collision. The benefits could include medical care, income replacement, rehabilitation, etc. Accidental benefits are provided at no fault basis and are available regardless of who was at fault. In case of death, the coverage would cover funeral expenses and pay out a survivor benefit. This insurance is not mandatory in Newfoundland and Labrador.
Third Party Liability Coverage
This coverage is a bit more extreme and involves if the driver of the vehicle injures or kills someone at the fault of the driver. You must have a minimum of $200,000 in Third Party Liability coverage. This type of coverage may also entail additional coverage called Direct Compensation Property Damage.
Direct Compensation Property Damage
This type of policy would cover damages to an insured vehicle and to any property inside the vehicle. Direct compensation property damage insurance is mandatory in Ontario, Quebec, Nova Scotia, PEI and New Brunswick.
Uninsured Automobile Insurance
This is a mandatory part of your car insurance. It protects you if you’re involved in an accident with someone who has no insurance or a driver who commits hit and run.
Collision Car Insurance Coverage
Collision Coverage is an optional coverage except in provinces of Saskatchewan and Manitoba where it is mandatory. Collision coverage is responsible to pay for the cost of repairing or replacing a vehicle following a collision. Also known as upset coverage, it is optional as the cost of insuring older vehicles might be higher than the vehicle insured. This type of coverage has a deductible which is the amount paid by you towards the cost of repairs. The higher the deductible, the lower the premiums.
Comprehensive Car Insurance Coverage
Comprehensive coverage protects your car against loss or damage on matters that do not involve collision. Comprehensive coverage will replace or repair your vehicle if it’s stolen or damaged and it typically covers things such as fire, vandalism, falling objects, hail, etc. This type of coverage is common if you’re financing or leasing your car as your lender might make it mandatory.
