Types of car insurance in Canada

 

Types of car insurance in Canada

 

What is car insurance in Canada? Car insurance in Canada is a contract between you and an insurance company that provides you with financial protection in the event of an accident. Auto insurance is mandatory across Canada, and you must have the minimum coverage in order to legally drive your car.

 

Types of car insurance in Canada

Auto insurance is mandatory across Canada and is intended to provide financial protection to drivers in the event of an accident. The types of coverage available within a car insurance policy vary, but in general, they can be divided into two main categories:

 

1. Liability insurance:

·        Minimum required by law: This type of insurance covers bodily and property damage to the other party in an accident caused by you. Minimum coverage requirements vary by province or territory, but are typically $20,000 for bodily injury liability coverage and $10,000 for property damage liability coverage.

·        Additional Liability Coverage: You can purchase additional coverage to extend protection beyond the minimum required. This gives you peace of mind in the event that your accident causes serious damage or expensive property.

 

2. Comprehensive insurance:

·        Collision: This type of insurance covers repairs or replacement of your car if it is damaged as a result of a collision with another vehicle or a fixed object such as a tree.

·        Comprehensive Coverage: Comprehensive coverage supplements collision insurance by covering theft, fire, vandalism, and natural phenomena such as flood and hail.

 

Additional insurance options:

·        Personal Injury Protection (PIP): This coverage covers your medical expenses and lost wages if you are injured in a car accident, regardless of who was responsible for the accident.

·        Uninsured/Underinsured Coverage: This coverage covers the cost of repairing or replacing your vehicle if an uninsured or underinsured driver causes an accident with you.

·        Roadside Assistance: This service provides roadside assistance if your car breaks down, such as towing it or charging a battery.

 

Factors that affect the cost of car insurance:

·        Province or Territory: Insurance rates vary between provinces and territories due to different driving laws and accident rates.

·        Type of vehicle: Expensive performance cars and SUVs are typically more expensive to insure than small, economy cars.

·        Driving Record: A driving record free of violations and accidents is an important factor in getting low insurance rates.

·        Driver age: Young drivers are usually more expensive to insure due to their less driving experience and higher accident rates.

·        Coverage Selected: The more coverage you choose, the more expensive your insurance will be.

 

Tips for getting the best price for your car insurance:

·        Compare quotes from different insurance companies: Get quotes from at least 3 insurance companies before purchasing an insurance policy.

·        Increase your violation-free record: The longer you drive without violations or accidents, the lower your insurance rates will be.

·        Choose eligible insurance discounts: Many insurance companies offer discounts on things like installing alarms or taking defensive driving courses.

·        Increase your liability level: You can lower the cost of your insurance by increasing the amount of liability you are willing to bear in the event of an accident.