If you own a four-wheeler in the nation, you must have either a car or automobile insurance. It will pay if you need to make any repairs to your car or any other vehicle if it gets damaged in a road accident. It also gives you the power to make liability claims if you are being held responsible for an accident that caused damage to someone else’s vehicle or an injury or a person.
Oftentimes an insurance company may call car insurance property and casualty insurance which also has under it home, business and disaster insurance.
You must keep in mind that if there is an accident with your car with another driver being the wheel who is not listed in the insurance policy, your record will be affected and there is a chance that your insurance premiums may increase.
Who a car insurance policy covers
Listed below are the people who have coverage under Canadian car insurance in case of a vehicle-related accident.
- The driver of the vehicle.
- All the passengers in the vehicle at the time of the accident.
- Those who are involved in the accident or may have been injured due to it.
Some provinces make it compulsory for their residents to have car or automobile insurance. If the people involved in the car accident have insurance, they will be required to make claims in their insurance first.
The main driver, also called the principal driver in a policy, is the one who most often drives the car. Additional drivers may be the members of the household who also use the car for their daily routines, such as driving to work or school. These additional drivers must be listed in your insurance policy for them to have coverage. However, you must keep in mind that your premium will increase if any of the listed drivers in your policy has a bad driving record. Those who rarely use the car are termed as an occasional driver.
What a car insurance policy covers
In case of an accident or a loss, coverage is what the insurance provider will pay you if the incident is eligible for coverage in accordance with the policy.
Mandatory insurance coverage
Mandatory coverage is required by every driver in Canadian provinces and territories. More coverage may be required in some provinces.
Liability insurance
Losses like injury and death caused by your vehicle to others are covered under liability coverage. Damages to your vehicle as well as to the vehicle of others in case of an accident is covered by this insurance. However, if the cost of damage repair or loss is more than the limit of your liability, you will have to pay the remaining of the settlement out-of-pocket. The cost of damage repair to your vehicle is also not given coverage under liability insurance. For these costs, you may need extra insurance coverage in adjunct.
Accident benefits or bodily injury insurance
The cost of your medical expenses or any income lost in the incident of a.car accident are covered by accident benefits or bodily injury insurance. If you reside in Quebec, you will be enrolled for this insurance automatically. Premium payments for this insurance is a part of your driver’s license registration. So, you do not need to purchase this insurance separately.
Additional insurance coverage.
Additional benefits may be provided by your car insurance policy.
Collision insurance
The cost of repairs as well as replacing your car in case you hit another car or object in an accident is covered by collision insurance. It is sometimes also covered by your mandatory insurance. To find out if you need this insurance or not, ask your insurance policy company what coverage is already available to you.
Comprehensive insurance
Repairing and replacing costs due to damage to your car from any other source are covered by comprehensive insurance. These are the following included.
- Vandalism of your car.
- Any damage to your windshield.
- Theft of your car.
This insurance does not cover the costs if you hit another car in an accident and need to repair or replace your car.
Optional insurance coverage
Whether you are or are not eligible for some type of insurance depends on your driving record. But you are at liberty to buy additional insurances to get coverage for things that are not included in your basic plan. This is often called a rider or endorsement and will require you to pay an extra fee. Here are some situations that may need additional insurance coverage.
- Using other means of transportation or renting another car while yours is in repair.
- Cost of repairing the physical damage done to the rental car.
- Cost of emergency roadside assistance.
- Keeping your premium from increasing after your first accident at your fault, which is also called collision forgiveness.
What a car insurance policy does not cover
The loss of personal belongings in case of a theft from your vehicle is not covered in many insurance policies. You must check with your insurance provider to see if coverage is provided for the theft of your belongings from your vehicle. Carefully go through your car insurance policy and be fully aware of what is under covers and what is not.
How an insurance company calculates premiums
The amount you pay to buy the insurance, the premium, is determined based on many factors by the insurance provider.
- Your age is taken into consideration.
- Your gender is considered as well.
- The place where you live is also a determining factor of your premium amount.
- What car you drive is also considered.
- How often you use your car also matters.
- Another factor is your driving record.
- Your claim history is also accounted for in your premium.
- The type of coverage you choose plays a key factor to determine the amount of your premium.
- Your premium amount also depends on your deductible.
The amount you give to your insurance provider before they pay the remaining amount is called a deductible. It is advised that you look at various insurance policies before paying a premium. Premium amounts vary for different companies. Find out the different quotes and compare prices prior to making a decision on an insurance company. You may qualify for a discount if home and car insurance are combined.
While buying your car, find out about the insurance rating. Different ratings are assigned to cats based on make and model. Cars with better ratings have cheaper insurance. Your premium can also get affected by your credit rating.
If your car insurance premium increases.
Here are some things you can do if your car premium increases.
Re-evaluate your needs
Evaluate your insurance needs. Some of the points are given below for you to consider in order to reduce your premium.
- Raising your deductible.
- If your car’s low resale value is low, you can do away with your collision coverage.
- You can get a combined deal of home as well as car insurance, or combined insurance for more than one car, with the same insurance provider.
Shop around
Shop around, check different quotes and compare prices from various insurance companies and brokers to make sure you are getting the best deal.
Car Insurance Settlement Options
Deciding how to settle your claim will be done after your insurance provider reviews your claim. You are required to pay a deductible when you make your claim. Your insurance benefits will determine how much financial help you receive from your claim. Reducing your deductible can also reduce your claim.
Repair or replace
To repair your car and bring it back to its original condition before the accident will be paid for by your insurance company.
Betterment.
Your insurance provider will only give you the amount necessary for your car to be fixed back to the same state as it was in, before incurring damage or being in an accident. If the car needs any additional repairs, such as things that were damaged before the accident, you will have to pay for these additional improvements to your car.
Write-off
If the cost of fixing your car is more than that of your car itself, your insurance company may decide to give you a write-off. This is a settlement based on the worth of your car before damage.
How to Settle a Claim if you have a Car Loan
Your insurance provider can decide to exclude the payee clause if you have a loan on your car. This means that your lender now becomes your beneficiary. In case there is a loss or damage done to your car, the insurance company will pay the person from whom you have taken a loan till the maximum limit of your loan whenever you make a claim on your car insurance.