Auto Insurance 101
Do I need auto insurance?
If you own a vehicle in Canada, you need insurance — it’s the law. At a minimum, you need to have third-party liability coverage, which protects you from claims others may make against you if you cause damage to their vehicles or injure them in an accident. If you lease or finance a vehicle, the financial institution will require you to purchase insurance to protect it from collisions, theft and other potential damage. And even if you’re simply storing your car in a garage, you’ll want to protect your investment — it could be stolen, vandalized or damaged in an event such as a fire or windstorm.
It’s also important to let your insurance provider know when you have a new driver in your household — whether they are an experienced driver who has moved in or someone who just got their licence. Before you hand over your car keys, ensure that your policy will cover a specific driver.
How does it work?
So, you know that you need insurance, but how much coverage do you need? What happens after an accident? The value of your car, how you use it and how you would recover financially after an incident are all factors in deciding how much insurance to buy — but first you need to know how coverage works.
Liability coverage — If you are deemed to be at fault for an accident, the other parties can sue you for the damage caused to their vehicles and for the injuries they have sustained. It’s important to have enough insurance to protect you if those injuries are significant or life-changing.
Accident benefits — This coverage provides you with benefits to help you recover from injuries that you sustain in an accident. Rehabilitation can be costly, and you may face additional expenses for child care or maintenance of your home. If you are unable to work, you may suffer from lost income. If you have access to benefits through your employment, you may only need the basic coverage on your automobile policy. Check to see what coverage you already have before choosing your auto insurance coverage.
Physical damage — Several options are available to cover damage to your own car. Collision covers damage sustained in an accident that you are deemed responsible for. Comprehensive or specified perils insurance (commonly known as fire & theft insurance) protects you against other factors that can damage your vehicle, including windstorms, hail, and stone chips on your windshield, as well as a fire or theft of the car.
Extra coverage — Many options are also available to cover other expenses that may result from an incident: for example, you may need to rent a car while yours is being repaired or replaced. Coverage can be added to your policy to cover the daily rental cost as well as temporarily transferring your insurance from your car to the rental while you are driving it. Many insurance companies will allow you to buy “accident waiver” protection, which protects you against large increases in your premium after your first at-fault loss. Talk to your insurance provider to find out what options would be best for you.
How do I get auto insurance?
You’ll need to have some information on hand in order to obtain a quote or purchase insurance for your vehicle. The basics include:
- details about your vehicle — You’ll need the year, make, model and VIN of each vehicle you want to insure. You can find this information on the vehicle ownership or on the bill of sale.
- details about the drivers — For all the drivers who reside in your household or who regularly operate your vehicle, you’ll need to provide driver’s licence numbers, the dates that licences were obtained and the dates and types of any tickets or claims. Discounts may be available to newly licensed drivers who have successfully completed a driver training program, so be sure to have a copy of that certificate.
- financing or lease information — The name and address of institutions that have leased a vehicle to you or financed a purchase will need to be included on your policy.
Numerous options are available to you, and even the most experienced drivers can find it difficult to determine how much coverage they really need. Fortunately, our licensed coverage experts are here to help.
Call us at 1-866-400-4946 and we will guide you through the decision-making process of this important purchase.