In Canada, there are a few types of car insurance coverage that you are legally required to carry with you at all times, and uninsured motorist coverage is one of them. Below, we dive into all there is to know about uninsured motorist coverage, including how it can protect you from another motorist driving without insurance.
To understand how uninsured motorist coverage works and why it’s so important, we must first explain what an uninsured motorist is. Put simply, an uninsured motorist is a person who is driving a vehicle but who does not have an auto insurance policy that meets the mandatory minimum coverage requirements in the province. This could mean that they are underinsured and have a policy without adequate coverage, or it could mean that they are completely uninsured, lacking any sort of valid auto insurance policy whatsoever. Whichever category they fall into, they are committing an illegal act, as driving without insurance is against the law in Canada.
Uninsured drivers vs. underinsured drivers
Despite the name, uninsured motorist coverage is designed to protect policyholders from both uninsured drivers and underinsured drivers. But what’s the difference between the two? An uninsured driver is a person who does not have an auto insurance policy that meets the province’s minimum coverage requirements and yet chooses to drive illegally anyway. Meanwhile, an underinsured driver is someone who has a valid car insurance policy but does not have enough coverage to cover the costs of the damages or injuries that arise from an at-fault accident. Therefore, an uninsured driver is driving illegally, whereas an underinsured driver is not. However, they may not have purchased a high enough coverage limit to reasonably cover them in the case of a serious accident.
One last category of driver that often gets lumped in with uninsured and underinsured motorists is unidentified drivers. An unidentified driver is someone who flees the scene of a collision without identifying themselves or providing any insurance or contact information. The most common case of an unidentified driver is a hit and run situation. Note that while uninsured motorist coverage does offer protection against unidentified drivers, as well as uninsured and underinsured drivers, unidentified drivers are treated differently by insurance companies.
What is uninsured motorist coverage?
Now that you know what uninsured motorists, underinsured motorists, and unidentified motorists are, let’s provide some insight into the type of car insurance that protects against these types of drivers: uninsured motorist coverage. Uninsured motorist coverage is one of four types of auto insurance that are compulsory in Canada. It comes into play if you find yourself in an accident with a driver who is uninsured or underinsured. It can also protect you if you are involved in a hit and run, in which case the driver would be considered unidentified. In essence, this type of coverage can protect you from any damage caused by the uninsured, underinsured, or unidentified person. Specifically, uninsured motorist coverage may compensate policyholders for any injuries sustained, whether they were sustained by the driver or a passenger, as well as damage to their vehicles:
Getting into an accident with an uninsured driver
If you get into an accident with an uninsured driver, you should follow the same protocol that you would if you got into an accident with the average insured driver. First, ensure everyone’s safety and contact emergency services if needed. Depending on the severity of the collision, reporting the car accident might be a legal requirement. Further, if you discover that the other driver involved in the accident does not have insurance and is therefore driving illegally, you must contact the police.
After emergency services and/or the authorities have been contacted, make sure to exchange contact information with the other driver(s) involved. Important information to obtain includes the driver’s full name, phone number, home address, driver’s licence number, licence plate number, and the make and model of their vehicle. Before leaving the scene, it is recommended that you take photos and video footage of the collision and any damage that resulted from it. You may also want to get the contact information of any witnesses to the accident, if applicable.
Filing an uninsured motorist claim with your insurance provider
If you find yourself in an accident with an uninsured motorist, you must call your insurance provider as soon as possible following the incident. Why? So that you can file a claim. As soon as you notify your insurance company about the accident, ask them for information on how to begin the claims process. Typically, the process to file an uninsured motorist claim is the same as any other type of car insurance claim. Nowadays, most claims can be filed and submitted online via the insurance company’s website. If you have questions about how to file an uninsured motorist claim with your insurance provider, contact BrokerLink. A BrokerLink insurance broker can walk you through the process, step by step, to ensure you provide your insurance company with all the relevant information. They can also give you tips on things you can do to increase the odds of your claim being approved.
How uninsured motorist coverage works
Let’s explain how uninsured motorist coverage works. Typically, uninsured motorist insurance covers drivers if they get into a collision with an uninsured, underinsured, or unidentified driver and that driver is considered at fault. However, depending on the province you live in and the circumstances of the collision, other types of auto insurance may cover you. Let’s consider three of the main outcomes of car accidents to see how uninsured motorist coverage may apply:
If you, a passenger, or a pedestrian is injured following an accident, any medical expenses incurred that are not covered by health insurance would likely be covered by accident benefits coverage. However, in such a scenario, if the driver that caused the accident was found to be uninsured or underinsured, then you may also be able to claim uninsured motorist coverage.
If property damage resulted from an accident, such as your car being damaged, and the accident was caused by an uninsured driver, then the cost of repairs would likely be covered by the uninsured motorist portion of your policy. The one exception to this is Alberta, where uninsured motorist coverage is not mandatory. Therefore, if you got into an accident with an uninsured driver in Alberta, you would likely only be covered if you added collision coverage to your policy, which is optional.
Hit and run accidents
The last situation that uninsured motorist coverage can protect against is a hit and run accident. This is when the issue of unidentified drivers comes into play. If someone hits your car and flees the scene, you likely will not have a way of identifying the driver. Similar to accidents with uninsured drivers that result in bodily injury, any injuries sustained in the hit and run would likely be covered under the accident benefits portion of your policy. Meanwhile, property damage that resulted from the accident, such as a damaged vehicle, would likely be covered by the collision coverage section of your insurance plan.
Driving without insurance
Throughout this article, we have focused on what happens if you get into an accident with an uninsured driver. But what if you are the uninsured driver? If you decide to drive a vehicle without adequate car insurance, you are committing a serious offence. Car insurance is a legal requirement in every Canadian province and territory, which means driving without it is illegal. If caught, you could face all kinds of serious consequences. You might be forced to pay an expensive fine (note that fines only get more expensive the more times you are caught driving without insurance), your driver’s licence might be temporarily suspended, your car could be impounded, and you could even face jail time in certain provinces. Therefore, it is in your best interest to purchase a valid car insurance policy that complies with local laws. If you aren’t sure what the minimum coverage requirements are in your province, contact BrokerLink today. We have insurance brokers all across Canada who can help you choose the right policy, whether you need car insurance Calgary or car insurance Toronto.
Uninsured motorist coverage requirements
If you do not want to be labelled as an uninsured driver in Canada, make sure that you purchase a policy that meets the minimum coverage requirements laid out in your province. This varies from province to province. However, almost all provinces, with the exception of Alberta, require drivers to carry a certain amount of uninsured motorist coverage. This means that purchasing such coverage is a legal requirement in most parts of Canada. A BrokerLink insurance broker can provide you with a clear picture of exactly which coverages you need for car insurance.
Explaining mandatory car insurance coverage in Canada
Not sure if you need car insurance in Canada? If you drive, then you need car insurance. But answering the question, “What types of coverage do I need?” is a different story. Let’s start with mandatory coverage. Mandatory coverage is the type of auto insurance coverage that all drivers need to have. Failing to purchase any of the following can lead to you being deemed an uninsured driver, which is the same as breaking the law. Keep reading to learn more about the three types of coverage that are compulsory in most Canadian provinces and territories:
Third party liability coverage
Third party liability coverage is the only type of liability coverage on most car insurance policies, which makes it extremely important. This coverage comes into play if you get into an accident and you are at fault for that accident. It can pay for legal fees, medical bills, and repair bills. Drivers in Ontario are required to carry no less than $200,000 in third party liability coverage, though many opt for a higher coverage limit.
Accident benefits coverage
Accident benefits coverage is another type of mandatory coverage in Canada, and it works to compensate policyholders if an accident results in bodily injury and someone involved requires medical attention. Under this section of your car insurance policy, your insurer may reimburse you for the medical fees incurred by yourself, another driver, a pedestrian, or even a passenger. Accident benefits coverage can be used no matter who caused the accident, and it can pay for a wide range of medical expenses not covered by health insurance, such as prescription medications, ambulance transport or physical therapy.
Direct compensation - property damage coverage
Last but not least is direct compensation - property damage coverage, which is designed to pay for property damage repairs in the event that an accident causes damage. This coverage is only applicable if the other driver was at fault for the accident. The most common example of what direct compensation - property damage coverage can pay for is car repair bills.
Optional car insurance coverage worth considering
While mandatory coverage is just that - mandatory - it’s not the only type of coverage available to drivers. In fact, mandatory coverage is considered basic coverage, whereas full coverage includes several types of optional car insurance coverage on top of mandatory insurance. To give you an idea of the types of optional car insurance coverage available to you and help you decide which ones might be worthwhile, keep reading:
Collision coverage protects policyholders against property damage that results from a collision. For example, if you get into a car accident with another driver or a grounded object and your vehicle is damaged, you can file a collision coverage claim. Collision coverage can be claimed regardless of which driver was at fault for the accident. This coverage may be required by a lienholder or lessor in the event that your vehicle is financed or leased.
Comprehensive coverage, also known as parked car insurance, is another type of optional coverage that many drivers find to be important. With comprehensive coverage, if your car is stolen or damaged due to a named peril in your policy, your insurance company will help cover the cost of replacing or repairing it. Note that you will only be covered for perils listed in your policy, which vary but may include fire, falling objects, wind, vandalism, theft, water damage, and more.
Accident forgiveness coverage
One final type of optional car insurance coverage popular among drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage varies by province.
Gap insurance is one last type of optional car insurance coverage that might be worthwhile, especially if you lease or finance your vehicle. Gap insurance, or guaranteed asset protection insurance, is designed to protect policyholders from vehicle depreciation. More specifically, in the event of an accident that results in a total loss, gap insurance can bridge the “gap” between the depreciated value of the vehicle and the amount of money the policyholder still owes to the leasing company or lender. For gap insurance to apply, the cause of the accident would have to have been covered by your insurance policy. For example, if your car was stolen, you would only be covered by gap insurance if your policy already contained comprehensive coverage with theft as a named peril. GAP insurance can sometimes be purchased from the dealership where the vehicle was purchased.
The cost of uninsured motorist coverage explained
Uninsured motorist coverage is a type of car insurance coverage that is featured in auto insurance policies. It is not typically purchased separately or even as an add-on. Therefore, uninsured motorist coverage will be factored into your overall car insurance premium rather than purchased as a standalone policy. However, to give you a better idea of how car insurance premiums in Canada are calculated, the experts at BrokerLink have put together the following list of details that an insurance company is likely to consider when determining your rates:
- Where you live (and where you regularly commute)
- Model, make, and year of vehicle
- Past claims
- Average mileage
- Driving experience
- Driving record
- Insurance history
- Deductible amount
- Regulatory bodies
- How you use your vehicle
For more information on how insurance companies calculate car insurance premiums in Canada or for tips on how you can keep auto insurance rates low, contact BrokerLink. A BrokerLink insurance advisor can also provide you with a free car insurance quote to give you a better idea of how much you can expect to pay for your policy.
Get in touch with BrokerLink to learn more about uninsured motorist coverage
Get in touch with a BrokerLink expert for more information and advice on uninsured motorist coverage. We have licenced insurance professionals located in over 200+ offices across Canada, each of whom can be reached by phone, email, or in person. This means that you can get in touch with us whichever way you choose. No matter what, a licenced car insurance specialist will help you. Your BrokerLink insurance advisor can explain how uninsured motorist coverage works, including how it can protect you. They can also outline the other types of mandatory car insurance coverage in Canada and help you shop around to find a policy that complies with local laws and meets your needs. Of course, as insurance professionals, we can also use our resources and expertise to help you save money on car insurance. Learn more about what BrokerLink can do for you by contacting us today.
FAQs on uninsured motorist coverage
How does uninsured motorist coverage differ from collision coverage?
Uninsured motorist coverage and collision coverage may both pay for property damage that results from an accident with a driver who is uninsured or underinsured. However, collision coverage will typically only pay for damage to your vehicle, though it will pay for the damage regardless of which is at fault for the accident. On the other hand, uninsured motorist coverage may pay for damage to your vehicle or other property that results from an accident, though it will usually only cover these expenses if the accident was caused by the uninsured or underinsured driver.
How much uninsured motorist coverage do I need?
The amount of uninsured motorist coverage you need varies from driver to driver. Policyholders usually have a choice when it comes to coverage limits for each type of coverage. Some experts recommend choosing an uninsured motorist coverage limit similar to the limit that you select for third party liability coverage, but it will ultimately depend on your needs and budget.
Where can I buy uninsured motorist coverage?
You can buy uninsured motorist coverage from an insurance agent or an insurance broker. Either can help you understand how the coverage works, recommend coverage limits, and ensure your policy complies with the local laws in your province. Often uninsured motorist coverage is covered in any insurance policy purchased from an insurance company.
Does uninsured motorist insurance cover hit and runs?
Yes, uninsured motorist insurance is designed to cover accidents with uninsured and underinsured drivers, as well as accidents with unidentified drivers, also known as hit and runs. If you are involved in a hit and run accident, contact your insurance provider to begin the claims process.
If you have any questions, contact one of our local branches.