Why do I need insurance?
In Canada, car insurance is the law. We know you hate to spend your hard earned money on insurance, especially since the cost of having a car is so high to begin with. However, driving your car without the proper insurance is not only against the law – it puts yourself, your passengers and other drivers at risk.
The mandatory amount of coverage (also known as minimum coverage level) is what’s required by law to get your car on the road. However, there are additional coverages you can purchase. These optional items provide more benefits in the event of an accident or incident that results in vehicle damage. A few examples of this type of coverage include collision and comprehensive coverage.
It can be hard to understand the difference between mandatory and optional coverage. How do you know what you need and what you don’t? This is where insurance brokers come in. We’re here to make sense of it all. Using a broker is a way to navigate insurance lingo, which can be confusing. Think of us as your insurance translator!
Mandatory vs. Non-Mandatory Coverage: how much coverage do I need?
Non-mandatory coverage is technically optional, but many drivers refuse to go out on the road without it. This coverage is available in order to compensate for various types of damage that can happen as a result of a collision with other vehicles, motorcycles or pedestrians. Other non-mandatory policies will also cover incidents that happen when the vehicle is parked.
Understanding the different types of coverage can give you the information necessary to make informed decisions about the type and amount of coverage to buy. Many factors go into determining what degree of coverage you will need. This will include the type of vehicle you own as well as its age. The insurance company may offer a package policy that enables you to buy non-mandatory coverage at a lower rate, for example. All of these items and others will affect the total cost of coverage.
Different drivers have different purposes and reasons for being on the road at any particular time of the day or night, and this can affect coverage levels. Selecting the right car insurance policy coverage level is mostly an exercise in figuring out what type of driver you are and what type of coverage level fits best into your lifestyle and budget. For example, if you only drive an older vehicle a short distance to work, you might get a different kind of policy than if you own a luxury car that you use for vacation trips.
Comprehensive auto insurance coverage overview
The most important thing to understand about comprehensive auto insurance coverage is the misleading name. This coverage does not cover all possible forms of damage. In fact, it is specifically designed to protect the vehicle against damage that is NOT related to moving collisions with other vehicles. Think of everything that could possibly happen to your vehicle while it is parked: your car could be broken into, a tree branch could fall on it or an elephant could sit on it. Okay, the last one is pretty unlikely, but you get our point: comprehensive covers the things you don’t expect.
Deciding to buy comprehensive auto insurance coverage requires you to perform a kind of risk assessment on yourself. It could be worth it to you to buy the coverage just for the peace of mind you gain by having coverage for future incidents that are completely out of your control. Car owners who know that they would be unable to pay for the cost of the damages out-of-pocket may choose to get comprehensive insurance coverage as a part of their personal risk assessment.
If you are getting a loan to pay for your car, you may require comprehensive coverage. This coverage is required by some lenders. Wherever you are securing your loan from, make sure you ask about what type of insurance is required. Don’t be afraid to ask as many questions as you need in order to walk away with peace of mind. If you’re still not sure about what insurance you need, a broker is always available to explain.
What does comprehensive car insurance coverage protect?
The exact details of this coverage can change from one insurance company to another. This is why talking to an insurance broker is so important. Brokers are completely unbiased, and we will go through all your options with you. We can also discuss any risks that might be specific to where you live. For example, the type of comprehensive coverage you may require is very clear if you live in an area where floods are common. There are many other examples of non-collision incidents that can result in damage to your vehicle.
Here are a few examples of incidents that might be covered under a comprehensive auto insurance policy:
- Falling objects, such as trees, lamp posts or telephone poles
- Damage done to the windshield while the car is parked
- Theft of the vehicle, vandalism or other form of property damage to the vehicle as a result of civil unrest
- Damage to the vehicle from fires, explosions or natural disasters
Comprehensive car insurance policies can provide you with a certain level of peace of mind. Knowing you are fully covered is a major factor that comes into play when drivers in Ontario are researching insurance policies. The idea that the vehicle could be damaged by natural disasters or civil unrest is a serious cause for concern for many drivers. If you rely on your car to get to work and earn an income, the need for coverage is even greater in the event that something happens that is completely out of your control.
Comprehensive vs. Collision
The best way to understand the difference between collision and comprehensive coverage is to think about what the car was doing when the damage occurred. If the car was moving and hit another car, collision coverage will be used to make the claim. However, if the vehicle was parked, comprehensive coverage will be used to make the claim.
Collision coverage is viewed as necessary for most drivers, but it is technically optional. This is also true for comprehensive auto insurance coverage. In general terms, the more your car is worth, the more car insurance coverage you will want in order to protect your asset. If you aren’t averse to risk, and you have an older vehicle, you can choose to forgo both comprehensive and collision coverage in Ontario.
If you do this, you will save money in the short term, but there are still risks. You can drive legally as long as you still possess the mandated forms of coverage. However, you will be responsible for most of the costs if your vehicle is damaged while parked if you avoid getting comprehensive insurance coverage. Similarly, if your vehicle is involved in a collision with another vehicle, you will be responsible for the total costs if you don’t have collision coverage.
What does collision insurance cover?
Collision insurance covers the losses that are associated with vehicle rollovers or collisions with other objects while in motion. It is also important to understand what types of items are not included in collision coverage. If a tree falls and hits your car, you won’t be able to file a claim for damage if you only have collision coverage, for example. Although it’s true that the tree did collide with your car, these terms mean something specific when they are used in the context of car insurance jargon. Collision auto insurance only refers to collisions between vehicles and some other events.
To illustrate, here is a short list of situations covered by collision coverage:
- Collisions between your vehicle and another vehicle while your vehicle is in motion
- A collision where another vehicle hits your vehicle
- Hit-and-run collisions where a police report is filed also qualify under collision coverage
- Collisions with stationary objects qualify under collision coverage. Examples include a collision with a road sign, lamp post, embankments and other objects
Collision insurance also includes coverage for hitting a pothole, which many would associate with comprehensive insurance coverage. This is a perfect example of why it is so necessary to speak with your insurance broker directly about the extent and scope of your car insurance policy.
Collision insurance for car accidents
Accidents happen. That’s why insurance exists! If a collision happens and you don’t have insurance, you can be held responsible for the entire amount of the damage. Many drivers don’t know that the name of the type of coverage that will go into effect in this situation is called collision coverage.
Some drivers who obtain comprehensive coverage may assume that this will cover their vehicle in the event of a collision. However, the terms of the policy are clear, and these are two completely different types of coverage. If you are confused about the terminology, just ask your insurance broker to explain it to you clearly. Making informed decisions is critical when it comes to vehicle insurance in Canada.
If my friend borrows my car, does comprehensive coverage still apply?
When you lend your car, you lend your insurance. This means that your vehicle is protected if you lend it to a friend. However, if an accident occurs while your friend is driving your vehicle, you will be responsible for any increases to the premium that may occur as a result of the accident. To be on the safe side, talk to your broker before lending your car. Only lend your car to people you trust, and make sure everyone fully understands the risks and responsibilities involved.
How do I file a comprehensive insurance claim?
Making a comprehensive insurance claim is a standard process that is almost identical to the one used to make any claim to a car insurance company. Filing the claim is a straight-forward process. You can simply contact your car insurance company directly, and they will walk you through the process.
How much does comprehensive insurance cost?
The cost of comprehensive insurance can vary a great deal. Insurance companies consider where you live, your driving history and many other factors. It might sting to add any cost to your insurance policy, but this coverage is what protects you from the truly unexpected.
What is the minimum coverage requirement in Ontario?
In Ontario, there are a few minimum requirements for your car insurance policy. These requirements include third-party liability, accident benefits, property damage and uninsured auto driver coverage. Collision and comprehensive auto insurance coverage policies are optional, but many drivers recognize their benefits and choose not to drive without adding them to the total policy.
Some insurance providers offer savings to drivers who add additional forms of coverage as a package. This is called bundling, and it can make you eligible for discounts. Your insurance broker can help find coverage options that make sense for you.
Let BrokerLink help you get the right coverage
Whatever kind of car you drive and wherever you drive it, BrokerLink is here to make sure you’re safe while you’re on the road. Talk to a broker today to get insurance that makes sense for your life.