The one thing that every vehicle on the road in Canada has in common is insurance — it’s the law.1 Most drivers have a general idea that you need auto insurance to help pay for damages if you were to cause an accident, but it can be hard to understand what else is covered or how much insurance you should have. A good step toward understanding if you have the right protection when you get behind the wheel is to take a closer look at how auto insurance works.

Types of Auto Insurance
Auto insurance companies offer several types of insurance coverages, some of them are mandatory and others are optional. These are some of the coverages that you may find on your policy:

  • Liability insurance is the minimum insurance required in most provinces and territories. It’s the insurance that will pay for damage to someone else’s vehicle if you are at fault in an accident. It will also cover medical expenses if others are injured in an accident that you were found to be at fault for;
  • Collision insurance is also usually required if your car is being leased or financed. This insurance covers your vehicle if it is damaged in a collision up to the value of your vehicle;
  • Comprehensive insurance covers damage to a vehicle caused by anything other than a collision, such as vandalism, theft, wind, hail, fire or flood. Similar to collision, this is another optional coverage that is usually a requirement when your car is leased or financed;
  • Uninsured and underinsured motorist insurance covers damage to your vehicle caused by a driver who does not have valid insurance or has inadequate insurance;
  • Medical insurance covers medical expenses regardless of who is at fault in the accident; and
  • Personal injury protection pays medical expenses and lost wages for the insured driver

Understanding Your Insurance Deductible
Auto insurance works by using a deductible. Your deductible is the amount you’re responsible to pay out of your pocket when you make a claim. Your insurance company will be responsible for any claim amounts over and above your deductible. Depending on what you’re claiming, this deductible may apply. Your claims representative will let you know the details of your deductible. Deductibles can vary but usually start at $500. Choosing a lower deductible may reduce your premium, but just keep in mind this will mean you’ll have to pay more if you ever have to file a claim.

Filing an Auto Insurance Claim
If you’re in an accident, or if your vehicle is damaged by another type of incident, call your insurance company – the claims number can be found on your insurance pink slip. A representative will ask for your policy number, along with detailed information about what happened. If another driver was involved, you will need to provide their license and insurance information. Your representative will assign a claim number, which you will need when you follow up on the status of the claim.

The insurance company will investigate the accident2 and send a representative to evaluate the damage to your vehicle. They will also review injury claims. Once they have completed their investigation, you should receive a cheque minus the amount of your deductible in a short amount of time.

Your insurance agent can help you review your policy and determine if your coverage needs are adequate. He or she can also answer any questions you may have on how auto insurance works and what to expect if you have to file a claim. Trust the team at aha Insurance with all your auto insurance questions.

If you’re looking to upgrade insurance coverage, we invite you to get started with an online quote. When you purchase auto insurance through Hudson’s Bay Financial Services and aha Insurance, you’ll be eligible to receive up to 2,500 Hudson’s Bay Rewards points.

Learn about auto insurance coverage in Ontario and get
started with an online quote.

1 Ellen Roseman. “Why auto insurance is mandatory.” The Star. Retrieved November 28, 2018, from https://www.thestar.com/business/personal_finance/insurance/2007/07/01/why_auto_insurance_is_mandatory.html.

2 Financial Services Commission of Ontario. “After an auto accident: Understanding the claims process.” Retrieved November 28, 2018, from https://www.fsco.gov.on.ca/en/auto/brochures/pages/brochure_claims.aspx.