At BrokerLink, our brokers are here to act as trusted advisors and simplify insurance. When it comes time for vehicle owners to renew their car insurance, it’s an opportunity for them to assess, with the help of a broker, if their current car insurance coverage meets their needs. To help vehicle owner’s understand this assessment, here’s a rundown of common car insurance terms and an explanation of both mandatory and optional coverages.
The terms
Premium
An insurance premium refers to the amount paid for insurance, either annually or a payment plan. Premiums are determined by several factors such as age, location, occupation, how often the person drives their vehicle and the type of vehicle. If a person has changed their location, car, or distance they drive, their premium could change. This is important information to share with a BrokerLink advisor.
Deductible
A deductible is the amount paid out of pocket in order to receive insurance funds in the event of a claim. Deductibles vary depending on the coverage type and the insurance provider. Additionally, deductibles can be waived in specific circumstances – such as someone being responsible for damage caused to another person’s car. In such a scenario, the person with the damaged vehicle would not have to pay a deductible. Vehicle owners can ask a BrokerLink broker to assess their current deductibles.
Endorsements or riders
Endorsements or riders are changes made to a standard auto policy to increase or reduce the amount of coverage received for specific situations. For example, a driver having a car rental endorsement as part of their insurance coverage will help cover the costs of a rental vehicle if they can’t use their personal vehicle due to an accident. Vehicle owners can ask a BrokerLink broker to assess their current policy to see if increases or reductions are needed.
Mandatory coverage
Third party liability coverage
Third party liability can cover the cost of damages to another driver – this includes legal fees if there is a lawsuit and bodily injury or property damage. It’s important for drivers to ask about their amount of third-party liability coverage. Specific regulations and minimum requirements may differ by province; however, these amounts may not cover damages. Drivers in Ontario should carry $2-million third-party liability coverage, while in Alberta, drivers are recommended to carry at least $1-million third-party liability coverage.
Accident benefits coverage
As with third party liability, accident benefits is a mandatory coverage for vehicle owners in Canada. This coverage can provide funds to cover expenses which result if a driver is in an accident, such as medical care or legal fees. Additionally, accident benefits coverage can cover loss wages if a driver is unable to work – minimum amount paid out on most policies are based on the driver’s wages. A BrokerLink broker can provide more details about other limits and coverage.
Optional coverage which goes the extra mile
Comprehensive coverage
Comprehensive coverage can provide compensation for damage sustained to a vehicle in an incident other than a collision. This includes damages caused by floods, water, fire, falling objects, break-ins, weather events and collisions with wildlife while driving. Additionally, coverage can be provided for theft of an entire vehicle or for windshield repairs. Drivers can inquire about if they have the coverage and ask a BrokerLink broker for recommendations.
Collision coverage
Collision coverage can pay for any damage sustained in a collision with another vehicle, an object or roll over. If the vehicle damage is beyond repair, collision coverage may also include compensation for the actual cash value of the vehicle. A BrokerLink broker can explain the ins and outs of collision coverage cash payouts if a vehicle is beyond repair (there are limitations).
All-perils coverage
Most often, all-perils coverage includes aspects of comprehensive and collision coverage. However, a key difference between all perils and comprehensive coverage is it can provide coverage if a vehicle is stolen. Drivers can ask a BrokerLink broker about whether single coverages, such as collision, or a bundled coverage like all-perils will suit their needs.
Drive with peace of mind
To get a car insurance tune up, contact BrokerLink. Our brokers will do a full assessment of a vehicle owner’s car insurance policy to ensure they get in the driver’s seat with the best coverage for their needs.
