Even though car insurance is required to drive in Canada, essential coverage minimums differ by province. These minimum requirements cause many drivers to conclude this is appropriate coverage. Everyone’s insurance needs are unique to their own circumstances, and the minimum coverage doesn’t represent the median requirement. Since each province’s requirements encourage drivers to invest in little more than the minimum, the possibility of financial losses is increased.
Just what flavor of insurance should you have, and how much will you need? We’ll delve into these matters, and learn about the associated issues that you should be aware of. Your “take aways” will be a firm understanding of liability insurance and its underpinnings like medical benefits, payouts in the event you are hit by someone without insurance. I expect you’ll gain insight into typical coverage and the types of financial losses you can protect yourself from.
3rd Party Liability Third party liability coverage is in bundled in every Canadian automobile insurance policy. This is your financial protection should your actions be deemed accountable for damaging someone else or their property. You are covered up to your maximum should a lawsuit find you financially responsible for your actions. Many provinces require a minimum of two-hundred thousand dollars worth of third party liability coverage, but mileage may vary.
Statutory Accident Benefits This portion of your policy covers expenses associated with any injuries sustained by you or your passengers during a traffic accident. It does not matter who caused the collision. Benefits cover hospital bills and rehab expenses. It also pays for a caregiver and replaces income that is lost as a result of your trauma. Again, minimum requirements vary by province. For example, Ontario requires $100,000 (outside “catastrophic” injuries) while Nunavut only requires $25,000.
Uninsured Vehicle Coverage In the event you are struck by an uninsured motorist, you have an ‘uninsured’ coverage feature to offset your damages. This feature covers the costs associated with you and your passengers. It is this coverage that is also applied in the circumstance that you are involved in a hit and run accident, where the other vehicle speeds away.
Direct Compensation – Property Damage Coverage This feature is mandated in Ontario. It provides benefits in the event your automobile is damaged from the actions of another automobile. There are a few prerequisites that must be met in order for this coverage to take effect. For example, the accident must occur in Ontario. Also, at least one other vehicle involved in the incident must be covered by an insurance company that is licensed in Ontario.
Identify How Much Coverage You Require Up until now we have looked at the basic components of a car insurance policy as mandated in most provinces (with the exception of DCPD coverage). But the, discussion evaded the larger context of need. Millions of people are exposed to a financial loss because they are buying the minimum amount required by their province’s government. A single court judgment could potentially be financial devastating.
Suppose you live in Prince Edward Island and decide to invest in the minimum 3rd-party liability requirement (i.e. $200,000). As the result of tragic circumstances, you are found at fault for a traffic accident that results in another driver death. A lawsuit is brought against you for which a judgment is rendered amounting to $1 million. Because your auto insurance limit is only $200,000, you find yourself responsible for paying the balance – or, $800,000. This would devastate the finances of most families.
If you opt to get the minimum insurance requirement of your province, you could be opening yourself up to huge financial risks. The minimum requirements are just that – minimums. Have a good look at your: third party liability, statutory accident, and uninsured vehicle benefits. Given the skyrocketing costs associated with medical procedures and car repairs, you might decide that the minimum is not enough for you and your family.
It is wise to regularly shop for car insurance quotes. Comparison shopping can provide the better rates but also the best values. You’ll often discover that you can get increased coverage for less money.
Have a close look at your coverage levels. Look into what it would cost to adjust your coverage to a level you feel more comfortable with. Online car insurance quoting services can save you time in your investigations. They can often uncover the car insurance brokers that are most interested in your business. Uncover the cheapest quotes for the coverage you need, and compare this to your present policy. Many Canadians have found this method to be the easiest way to get what they need.
Get car insurance quotes and compare the coverage of local brokers competing for your business. Find out who best represents your financial interests, and see whose rates shine through.
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