Since no two drivers are the same, there are multiple types of auto insurance policies available to drivers in Canada. From standard auto insurance that includes the minimum coverage required by law to full coverage auto insurance that goes above and beyond in terms of protection, there are options to suit all kinds of drivers.
While some feel basic coverage is enough, others wouldn’t dare hit the road without the peace of mind that full coverage auto insurance offers. Below, we explain exactly what full coverage car insurance is, as well as how it compares to standard liability coverage.
What is full coverage insurance?
To explain full coverage insurance, we must first explain basic insurance. Basic car insurance in Canada is that which includes the mandatory coverage types - nothing more, nothing less. Basic coverage varies by province but may include third party liability coverage, uninsured automobile coverage, accident benefits coverage, and direct compensation coverage.
While you can legally drive your car with standard auto insurance coverage like this, it is fairly minimal and may be inadequate depending on the circumstances.
Luckily, there are optional coverage types that can be purchased with your policy for additional protection. Full coverage insurance includes all the mandatory coverage types mentioned above in addition to several optional coverages - namely, collision and comprehensive coverage.
Collision will cover you if your car is damaged in an accident, regardless of who was at fault for the accident, while comprehensive provides you with protection against theft, vandalism, fire, flood, and other non-collision-related damage. Therefore, full coverage insurance provides greater protection and peace of mind to Canadian drivers.
What coverage does full coverage car insurance include?
Now that you know the difference between basic car insurance and full coverage car insurance in Canada, let’s delve into the specific coverages they offer. While both types of insurance feature the coverage mandated by law, full coverage car insurance goes above and beyond, including two types of optional coverage.
We break down each type of coverage included with full coverage auto insurance below (note that mandatory coverage types vary by province but generally include protection against collision, third party bodily injury, and third party property damage).
Third party liability insurance
Third party liability coverage is the most important mandatory coverage type in Canada. It provides legal protection if you injure someone else or cause property damage to another person’s property on the road.
For example, if you accidentally crash into your neighbour’s front porch, rear-end another car at an intersection, or cause a collision that injures another driver, you can claim liability coverage.
This type of coverage can help pay for medical expenses associated with bodily injuries or repairs of damaged vehicles, as well as any applicable legal fees, court fees, and settlements up to the coverage limit.
All drivers in Canada are required to purchase third party liability coverage with their policies, though the minimum requirement varies. In Ontario and Alberta, $200,000 in third party liability coverage is mandated, whereas, in Nova Scotia, $500,000 is required.
That said, many drivers choose to purchase in excess of the requirement, often buying $1,000,000 or more in liability coverage.
Direct compensation - property damage coverage
Direct compensation - property damage coverage protects an insured vehicle and its contents against property damage, as long as the policyholder is not at fault for the accident that caused said damage.
Under this type of coverage, the insurer often pays for the repair or replacement of your vehicle directly. Note that to be eligible for direct compensation coverage, the collision must meet a certain set of criteria.
In the province of Ontario, the criteria are as follows: the accident occurred in Ontario, it involved more than one vehicle, and it involved at least one car that participates in the provincial auto insurance program.
Uninsured automobile coverage
Uninsured automobile coverage protects you and any passengers in your vehicle if you get into an accident with an at-fault driver who is either uninsured or underinsured. This type of coverage can also protect the policyholder in the event of a hit-and-run.
Uninsured automobile coverage can help pay for medical expenses, property damage, and more.
Accident benefits coverage
If you, a passenger, or a pedestrian requires medical attention following a collision, accident benefits coverage can help. You can claim this coverage no matter who is liable for the accident.
It can help pay for loss of income or medical expenses that may not be not covered by health insurance, like prescription medications, physical therapy, or rehabilitation.
If you get into an accident with another car or object on the road, no matter who is at fault for the accident, collision coverage can help cover the costs. Under the collision coverage portion of your policy, you can be reimbursed for the costs of property damage that resulted from an accident, such as a vehicle repair.
Another benefit of collision coverage is that you do not need to wait for an insurance payout from another driver’s insurance company, which allows you to get your vehicle repaired quickly.
Comprehensive coverage, also known as parked car insurance, offers peace of mind to Canadian drivers. This is because it protects against a wide range of unforeseen incidents aside from collisions.
Comprehensive coverage will pay to repair damage caused by an insured peril. You can choose which perils to include in your policy. Options typically include theft or attempted theft, lightning, vandalism, rising water, earthquakes, hurricanes, fires, a riot, explosion, or other civil disturbance, falling objects, hail, windstorm, falling or forced landing of an aircraft, and more.
You may choose to include some of these perils, known as specified perils coverage, or all of these perils, known as all perils coverage, with your comprehensive car insurance.
To learn more about mandatory auto insurance coverage in your province or territory, as well as full coverage car insurance in Canada, contact BrokerLink today. We have experts all over the country who can explain the different coverage options and help you find the right auto insurance policy.
Add-ons to full coverage car insurance
Whether you purchase a standard car insurance policy or a full coverage auto insurance policy, you may have the option of including add-ons. There are a number of add-ons that may benefit Canadian drivers. Below are three of the most popular.
Accident forgiveness coverage
Accident forgiveness is an add-on that can be purchased with any car insurance policy in Canada. This type of coverage is often recommended for new drivers or high-risk as it prevents the insurance company from raising your rate after your first at-fault accident.
Please note that accident forgiveness coverage will only stop the insurance company from increasing your premium after the first collision, not any subsequent collisions.
Waiver of depreciation
A waiver of depreciation is an add-on designed for leased and financed vehicles. Waivers of depreciation cover the entire replacement value of the car with no depreciation for two years.
Loss of vehicle use
One final add-on available to motorists in Canada is loss of vehicle use. This coverage can help cover vehicle accommodation expenses in the event your car is out of commission due to an insured risk or peril.
Why you should purchase full coverage car insurance in Canada
There are a few reasons why experts recommend purchasing full coverage car insurance over standard car insurance in Canada. First, if you were to get into an accident and only had standard coverage, the claims process would likely be longer and more complex. Plus, you would be required to deal with another insurance company beyond your own.
Filing a claim through another person’s insurer decreases your odds of the claim being approved, or if it is approved, you may have to settle for an amount below what you wanted. In addition, when you file a claim through another insurance provider, you will need to prove who was at fault for the accident, which can be difficult to determine. In contrast, if you were in a car accident with full coverage auto insurance, you would be dealing directly with your insurance company.
This would be a much simpler process and gives you a higher chance of receiving a better settlement.
The cost of standard car insurance vs. full coverage auto insurance
The cost of both standard car insurance and full coverage car insurance varies depending on a number of circumstances. Insurance companies consider a wide range of variables when determining insurance premiums.
Below is a list of some of the factors insurance companies use to calculate auto insurance rates.
- Where you live (and work - if you drive to work)
- Make and model of vehicle
- Driving record
- Driving experience
- Past claims
- Annual mileage
- Prior insurance coverage
- Marital status
- Your deductible
- Local laws
- How you use your vehicle
While it’s impossible to provide an exact estimate on the cost of standard car insurance and full coverage auto insurance in Canada, you can expect full coverage insurance to be more expensive.
This is due to the fact that full coverage auto insurance offers a much higher degree of protection than standard car insurance.
To receive a free estimate on how much your full coverage auto insurance policy will cost, contact BrokerLink. We are pleased to offer accurate, competitive, and 100% obligation-free quotes to all drivers in Canada.
How to make full coverage auto insurance more affordable
There’s no denying that full coverage auto insurance in Canada can be expensive, but there are ways to make it more affordable. For example, increasing your policy deductible, bundling multiple insurance policies together, or working with a broker to shop around for the best rate are all ways to save money on full coverage auto insurance.
BrokerLink’s expert insurance advisors have put together a list of their top tips for saving money on full coverage car insurance in Canada. Check them out below.
Increase your deductible
To save money on full coverage auto insurance, consider increasing the deductible on your collision and comprehensive coverage.
Typically, anytime a policyholder increases their deductible, their premium will be lowered. The average car insurance deductible in Canada is $500. By raising your deductible to $1,000 or more, you could save money on your full coverage auto insurance policy.
That said, increasing your deductible has both advantages and disadvantages. If you are considering raising your policy deductible, speak with a BrokerLink insurance advisor who can inform you of the possible consequences of doing so.
Choose annual over monthly payments
If you can afford to pay for your car insurance policy annually, doing so can save you money. Monthly or quarterly installment payments usually come with administrative fees that ultimately make it cheaper to pay upfront.
Plus, you’ll have fewer payment due dates to keep track of this way, reducing the chances that you’ll miss a payment and have to pay a penalty or worse - have your policy cancelled by the insurance company.
Install winter tires on your car
Canadian winters are world-renowned. Known for freezing temperatures, heavy snow, and slippery ice, driving in the winter is significantly more dangerous than driving in the summer. Luckily, snow tires can mitigate the risks of driving in the winter.
That is why insurance companies offer discounts to some Canadian drivers who install winter tires on their vehicles. Snow tires are known for their superior capabilities in winter conditions. Therefore, when you outfit your vehicle with them, you instantly increase your safety and reduce the odds of getting into an accident.
Insurance providers in Canada may reward you with savings of up to 5% on your full coverage auto insurance policy.
Drive a hybrid or electric vehicle
Driving an eco-friendly vehicle, such as a hybrid or electric vehicle, can reduce how much you pay for auto insurance in Canada. In an effort by the provincial governments in Canada to incentivize residents to reduce their carbon footprints, many regions have started offering insurance discounts to drivers of eco-friendly vehicles.
So if you’re thinking of purchasing a new car, we recommend choosing a hybrid or electric model. Doing so will not only reduce your impact on the environment and save you money at the gas pump but may also make you eligible for a car insurance discount of up to 10%.
Enrol in driving school
Enrolling in an approved driving school in Canada is another money-saving tip, one specifically for young drivers. Insurance companies know that driving schools produce skilled, safe drivers who are more likely to follow the rules of the road.
For these reasons, they offer auto insurance discounts to new drivers who can prove they completed a recognized driving program in their province.
Outfit your car with safety devices
Equipping a vehicle with safety devices is another way to save money on full coverage car insurance. When you install anti-theft devices or a security system in your vehicle, you decrease the chances of it being stolen.
Insurance companies acknowledge this and may reduce your premium accordingly. Therefore, adding safety devices to your vehicle, especially if it’s valuable, can be worthwhile for drivers in Canada.
Work with an insurance broker
One final tip for saving money on car insurance is to partner with an insurance broker. Reputable insurance brokerages like BrokerLink are experts in car insurance. Our insurance advisors will take the time to understand your needs and budget, before finding the best coverage at the lowest rate.
We can unlock discounts on your behalf, make you aware of rebates you didn’t know you were eligible for, and let you in on the industry’s best-kept secrets for saving money on auto insurance. When you work with BrokerLink, we will do everything in our power to ensure you find full coverage auto insurance at a competitive rate.
How to buy full coverage auto insurance in Canada
Are you ready to purchase full coverage auto insurance? You’d be surprised how easy it is when you work with a brokerage. Thanks to brokerages like BrokerLink, buying auto insurance is as simple as can be.
Follow the three steps below to find competitive and affordable full coverage car insurance in Canada.
Contact an insurance broker
The first step to finding full coverage auto insurance at an affordable price is contacting a trusted and reputable insurance broker. When you get in touch with BrokerLink, your insurance advisor will take the time to learn about your unique needs and budget so that we can find the best auto insurance coverage possible.
We shop around for you
BrokerLink knows that shopping around is key to finding the best full coverage auto insurance policy. But shopping for car insurance can be tedious, which is why we do the work for you. While you spend your free time exactly how you want to be spending it, we’ll be working behind the scenes to obtain quotes and compare policies on your behalf.
You get a great rate
The best part about working with an insurance broker is the end result - you get quality car insurance coverage at a great rate! Since our insurance advisors are licensed insurance experts, we always know where the best deals are hidden. Once we’re done obtaining quotes, we will give you a few policy options to choose from and you can pick the one that’s right for you.
Get in touch with BrokerLink for a free full coverage auto insurance quote
Still have questions about full coverage auto insurance in Canada? Contact BrokerLink today. We are always happy to share our resources and expertise on car insurance coverage in Canada.
Whether you want more information on the differences between standard car insurance and full coverage car insurance or wish to receive a free auto insurance estimate, we can help. You can also request a free quote now using our online quote tool.
Get in touch today! No matter how you choose to get in touch - whether by phone, email, or in-person - a trained expert will be ready to help you on your car insurance journey.
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