Collision Insurance

How much should my collision coverage deductible be?

Deductible amounts make a difference in car insurance, so you should be cautious when choosing your deductible.

Generally, you should expect to pay more for your car insurance if you have a lower deductible and vice versa. In other words, a high deductible will reduce your auto insurance rates. If you can afford a higher deductible, you should get one because it reduces the amount you pay for collision coverage. Collision coverage deductibles range from $500 to $2,000, but will vary depending on your insurance company. There are a few factors to consider when choosing your deductible. Think about the following:

• The value of your vehicle
• The age of your vehicle
• How expensive your vehicle is to repair or replace
• How much money you can afford to pay out of pocket if necessary
• Your driving record

If you need help choosing a collision coverage deductible, contact BrokerLink today. One of our licensed car insurance brokers would be more than happy to offer a professional opinion on the right deductible amount for your vehicle, driving habits, and budget.

Collision coverage vs. comprehensive coverage

Let’s clarify — collision coverage is not the same as comprehensive car coverage. Similarly to collision coverage or accident forgiveness coverage, comprehensive coverage is optional.

Despite this, comprehensive coverage is different from its counterpart. It doesn’t cover damage to your vehicle if you get into an accident with another vehicle or object, such as a street sign. On the contrary, it covers damage to your vehicle that happens outside of collisions. Comprehensive coverage instead covers the following perils:

• Theft
• Vandalism
• Falling and flying objects
• Glass damage
• Fire
• Explosions and riots
• Weather-related events (e.g. floods or high winds)

The difference between collision and comprehensive coverage is damages will be covered if caused by an insured peril. When this happens, you can file a comprehensive claim with your insurance company. From there, you will receive a payout to cover repairing or replacing your car.

What is the difference between liability insurance and collision coverage?

Liability coverage and collision coverage both protect against the costs associated with at-fault accidents. Despite this, they are different.

Third-party liability insurance is mandatory in every Canadian province and territory. In other words, it’s a legal requirement. Several provinces stipulate the amount of liability coverage you must carry (e.g. a minimum of $200,000 in Alberta and Ontario).

Additionally, liability coverage pays for medical expenses, repair bills, and legal fees associated with at-fault accidents. It also pays for the costs of the accident incurred by the victims. In other words, it won’t cover the expenses of the at-fault party.

In contrast, collision coverage is not government-mandated and doesn’t have a minimum coverage limit. It also only covers property damage, not medical expenses or legal fees. Collision insurance covers the accident costs incurred by the policyholder, whether they were at fault or not. It does not cover any expenses by the person who isn’t the policyholder.

These two types of coverage complement each other. Both are recommended and help prevent financial loss that can occur after colliding with another vehicle or object. Collision insurance pays for what third-party liability coverage doesn’t.

When should I remove collision coverage from my policy?

Collision insurance coverage is important, but it doesn’t make sense to keep it for every policyholder. It’s more helpful for those with high-value vehicles. After a few years, the cost of collision coverage could be 10% or more than your car’s worth, which is when it’s no longer required.

If this is the case, a BrokerLink insurance advisor can help remove any unwanted coverages. From there, your car insurance premium will likely go down.

In some cases, collision coverage can come in handy, though. When you lease or finance your car, have a long history of collisions, or prefer the added peace of mind, it might be worth it. You never know when you could get into a hit-and-run accident with an unidentified driver. That’s why knowing how to report a car accident is so important.