There are many types of auto insurance out there, but “full” auto insurance coverage is generally the most comprehensive option. If you want to have the broadest possible protection against the risks of the road, then purchasing a full coverage policy makes the most sense. However, in order to make this decision, it’s important to understand what is included in full coverage auto insurance. Below, we explain what this type of car insurance covers and how much it will cost you.
What risks does full coverage car insurance cover?
Full coverage auto insurance typically covers policyholders for the following risks:
- Damage that you cause to others, e.g. in an at-fault car accident
- Damage to your vehicle in a collision, whether the other driver involved had insurance or not
- Damage to your car due to weather or theft
- Medical expenses for yourself and any passengers
Please note that everything that full coverage car insurance covers is subject to your policy limit and deductible. This means that the amount of money you will receive after a car accident will be less your deductible and only up to the policy limit.
What isn’t covered by full coverage auto insurance?
Full coverage auto insurance doesn’t cover everything. In fact, there are certain risks that no car insurance policy will cover. These include:
- Damage due to street racing
- Damage due to off-road usage of your vehicle
- Use of the vehicle in a ride-sharing program, such as Uber (without proper notification to the insurer)
- Catastrophes, such as war
- Destruction to the car or confiscation by government or civil authorities
- Business use of the vehicle, unless a commercial auto insurance rider has been purchased
- Intentional damage to the vehicle
What full coverage car insurance looks like in Ontario
Car insurance is mandatory in Canada, but each province and territory has its own minimum requirements. Therefore, full coverage auto insurance may look a little bit different depending on what province you live in. Generally speaking, a full coverage policy will include every type of mandatory coverage in your home province, as well as comprehensive coverage and collision coverage.
In Ontario, there are four types of mandatory coverage:
We outline how these four types of coverage protect you, as well as explain how the two other coverages that make up full coverage insurance - comprehensive and collision coverage - work:
Third-party liability coverage
Liability car insurance is a type of auto insurance coverage that is designed to protect drivers who get into at-fault accidents. For example, if you are found liable for a fender bender, sideswipe accident, or rear-end collision that resulted in property damage or bodily injury, you can file a third-party liability claim with your provider. From there, they will issue a payout to help you cover the cost of vehicle repairs, medical expenses, legal fees, and more. In Ontario, all drivers must hold a minimum of $200,000 in third-party liability coverage at all times, though many drivers choose to purchase more based on the recommendation in the province where they reside.
Accident benefits coverage
Accident benefits coverage can pay for the cost of medical attention if you or a passenger is injured in a car accident. Under this portion of your policy, you can be reimbursed for any medical fees incurred that are not covered by health insurance. For example, if you are prescribed medication for your injury, your insurance provider can reimburse you for these costs. Additionally, you can be reimbursed for physical therapy or rehabilitation costs, as well as lost wages, if you are temporarily unable to do your job because of the accident.
Direct compensation coverage
Direct compensation coverage will pay for you to repair your vehicle if it is damaged in an accident. The only catch is that you can only file a direct compensation claim if you were not at fault for the accident. If you are found liable for the collision and your car was damaged, you will need to file a collision coverage claim if you don’t want to have to pay for the necessary repairs out of pocket.
Uninsured automobile coverage
The last type of auto insurance coverage that is not only mandatory in Ontario but will also be included in your full coverage auto insurance plan is uninsured automobile coverage. This type of coverage protects drivers against other motorists who are uninsured or underinsured. For example, if you get into an accident with an at-fault driver who is illegally driving without car insurance, you can still be reimbursed for the costs of the accident under the uninsured motorist portion of your policy. This type of coverage can pay for medical expenses, repair bills, and more. Please note that uninsured automobile coverage can also cover hit-and-run accidents.
Collision coverage
Collision car coverage is a type of car insurance coverage that is optional for most drivers unless you lease or own your vehicle. Therefore, it is not included in most basic car insurance policies in Ontario. However, it is almost always found in full coverage policies.
Collision insurance is a type of property damage insurance. You can think of it as an extension of direct compensation coverage in that it will protect you if you get into a collision and your vehicle is damaged. With collision coverage, it doesn’t matter whether you were at fault for the accident or not or whether the accident involved another car or it was a single-vehicle collision. In any scenario, collision car insurance will protect you. This type of coverage can pay for repairs, whether your car suffers minor damage after colliding with an animal or major damage after hitting another car head-on. More specifically, you can be covered after colliding with an animal, grounded object, or another vehicle.
When buying collision coverage, make sure to choose a limit that reflects the value of your car. Otherwise, if your car is totalled and the insurance company deems it a write-off, you may not be covered for the full replacement cost.
Comprehensive coverage
Next up, comprehensive car coverage is also found in most full-coverage auto insurance plans. Like collision coverage, it is usually optional unless you lease or finance your car, in which case your leasing company may require it. Whether you own or lease your vehicle, buying comprehensive car insurance coverage is important because it’s one of the few types of coverage that offers financial protection against non-collision-related events.
Comprehensive coverage will protect you against perils like theft, fire, vandalism, falling and flying objects, explosions and riots, and weather-related events. In other words, if your car is stolen, if a tree branch falls on it, or if a hail storm damaged it, you could file a comprehensive claim and receive a payout to help you cover the cost of repairing or replacing it.
As with collision coverage, it’s wise to choose a comprehensive coverage limit that reflects the worth of your car. This way, if your car is stolen or totalled while parked, you can receive a payout that will cover the cost of buying a new vehicle.
Extra protection for your full coverage car insurance policy
While full coverage car insurance offers some of the broadest protection out there, you can still add even more coverage to your policy. Below, we outline a few of the most popular types of extra coverage that policyholders often choose to add to their full coverage policies:
Accident forgiveness coverage
One more 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 and eligibility vary by province.
Waiver of depreciation
A waiver of depreciation can be added to your full coverage policy as a rider or endorsement. It will pay for you to purchase a new vehicle if your brand-new car is totalled. However, with a waiver of depreciation, your payout will be bigger because your vehicle’s full value without depreciation will not be accounted for as it would be with actual cash value coverage.
Loss of use coverage
Loss of use coverage is another type of extra protection that many drivers choose to add to their policies. Loss of use coverage will pay for you to get around if your car is temporarily unusable. For instance, if it is damaged in a car accident and is in the repair shop for a week, you will need to take an alternative mode of transportation during this time.
Whether you decide to rent a car, take public transportation, or hire taxis, you can be reimbursed for these costs under the loss of use coverage portion of your policy. However, if you don’t have this type of coverage, you would need to cover these costs on your own. Loss of use coverage is generally recommended for any driver who does not have easy access to another vehicle.
Full coverage car insurance vs. regular car insurance
Full coverage car insurance differs from basic car insurance in that it includes comprehensive and collision coverage. Regular car insurance only includes the coverages that are legally required where you live. In the case of Ontario, a regular car insurance policy would only include third-party liability coverage, accident benefits coverage, direct compensation coverage, and uninsured automobile coverage. In contrast, a full coverage policy would include the aforementioned coverages, as well as comprehensive and collision coverage.
Why purchase full coverage auto insurance?
There are a number of reasons that full coverage auto insurance is recommended. The main one is the additional protection that it includes. With a full coverage policy, you will be covered in a wide range of scenarios. Whether your car is stolen, damaged in a no-fault car accident, damaged in an at-fault car accident, or damaged in a storm, you will be covered by your policy. Without this extra coverage, you might have to pay a lot of costs out of pocket. This gives many drivers peace of mind, knowing that they are financially protected should something go wrong.
The cost of full coverage auto insurance
The cost of full coverage auto insurance varies between insurance providers, as each company uses its own risk-calculation formula. As a result, the factors they consider and how they weigh them will differ between companies. In addition, each policyholder is unique and will, therefore, have a unique premium. Below is a list of factors that you can expect your insurance company to consider when calculating your full coverage auto insurance premium:
- Where you live
- Age
- Gender
- Vehicle type
- How you use your vehicle
- Driving record
- Driving experience
- Past claims
- Prior insurance coverage
- Number of kilometres you drive
- Type of coverage on your policy
- Your deductible(s)
If you want more insight into how much a full coverage car insurance plan will cost, reach out to BrokerLink today. One of our insurance advisors can provide you with a free quote to give you a better idea of what to expect when it comes to your policy premium.
A broker can also explain how accidents affect car insurance rates, as well as how other driving infractions can influence your premium.
How to save money on full coverage car insurance
If you want to save money on full coverage car insurance, read through the list of tips and advice below:
Pay for your full coverage policy annually
If you don’t want to be charged extra administrative or transaction fees, then pay for your full coverage policy yearly. Making one lump sum payment upfront can make your policy cheaper. Find out if your insurance company charges extra for a monthly payment schedule by asking them.
Increase your policy deductible
As the policyholder of a full coverage auto insurance plan, it’s up to you to decide on the deductible amounts for your policy. Although you might be tempted to choose low deductibles, the higher your deductible, the lower your premium will be. If you can reasonably afford to pay a higher amount in the event of a claim, you could end up saving a lot of money on car insurance.
Insure multiple cars together
If your home contains more than one vehicle, ask an insurance broker about insuring them together. Buying two or more car insurance policies from the same provider can result in serious savings.
Bundle home and auto policies
Bundling home and auto insurance plans can also save you a lot of money on both policies. So if you need a homeowners insurance plan, condo insurance plan, or even a tenant insurance plan on top of your auto insurance policy, ask an insurance broker about buying them together. Many insurance companies offer home and auto bundles that will give you a discount on both policies.
Inquire about insurance discounts
Ask an insurance broker about extra insurance discounts that may apply to you. The reality is that insurance companies offer all kinds of discounts to providers, ranging from employment and education-based discounts to winter tire discounts, safe driver discounts, and more.
Install winter tires
If you live in Ontario, then installing winter tires on your car should be a no-brainer. Not only does it make your car safer to drive during the winter months, but it can also make you eligible for a car insurance discount. As a way of encouraging motorists to take this safety precaution, insurance companies now offer discounts to policyholders who install snow tires on their cars, so long as they are installed by a set date each year.
Review your coverage regularly
Reviewing your car insurance coverage on a regular basis is a habit that you should get into. Why? Doing so can make you aware of coverage that you no longer need. It can also make you aware of gaps in coverage. Further, when you review your policy, you might realize that you can afford to raise a deductible or lower a coverage limit. By assessing your policy at least once a year, you can modify it in ways that reduce your premium. If you need help reviewing your plan, ask a BrokerLink insurance advisor.
Attend driving school
Enrolling in a driver’s education program is extremely valuable. First, it will teach you about the rules of the road and instill important defensive driving skills in you. Second, if you can provide proof that you have completed an approved driving school in your province, you can receive a car insurance discount.
Improve your driving habits
Becoming a better driver has all kinds of benefits. You will be less likely to get into accidents, and your driving record will be cleaner. All of this can save you money on car insurance. By adopting these safe driving tips and keeping your record clean for multiple years on end, you can qualify for a discount on your policy.
Go hybrid or electric
Save money on gas and your car insurance policy by buying a hybrid or electric vehicle. These vehicles feature electric motors, which means that they only minimally run on gas or they don’t run on gas at all. This means fewer emissions and a greener future. To incentivize drivers to buy hybrid and electric cars, insurance companies now offer discounts to those who drive these types of eco-friendly vehicles.
Full coverage isn’t mandatory, but auto insurance is
One last note on full coverage car insurance. Although full coverage auto insurance is not mandatory in Ontario, basic car insurance is. This means that you cannot get behind the wheel unless you purchase a policy that contains uninsured motorist coverage, liability coverage, accident benefits coverage, and direct compensation coverage.
If you choose to drive without any type of car insurance, you can be fined up to $50,000, have your vehicle impounded, and have your driver’s licence suspended. Avoid this worst-case scenario by contacting BrokerLink and purchasing a valid car insurance plan today.
Get in touch with BrokerLink for more information on full coverage auto insurance
If you want to learn more about how full coverage car insurance works, reach out to BrokerLink today. A BrokerLink insurance advisor would be happy to explain how this type of insurance policy can protect you and what types of coverage it includes.
From there, we will ask you a few questions about your driving habits, insurance history, and vehicle in order to find you a personalized policy. We also know that customers are working with a wide range of budgets, which is why your insurance advisor will be happy to give you tips on ways that you can save money on your policy.
Reach out to BrokerLink today to request a free car insurance quote. It only takes five minutes!
Get an auto insurance quote[phone]
