Comprehensive Car Insurance: Do You Really Need It?

Did you recently buy or rent a car in Canada? If so, congratulations. However, to avoid stress and problems about money and car repairs in case you get into a car accident, purchasing auto insurance is a must. Why? Simply because it is illegal to drive here without insurance. Your future self will indeed thank you for investing in car insurance especially if an accident cause damage to your car, yourself, your passengers, and others.

On average, there are about 445 police-reported collisions in Canada daily. Getting in an accident does not only mean getting cuts, bruises, and card damages. It also entails spending thousands of dollars on repairs and injury claims. However, if you are well-prepared for such instances by investing in car insurance, you can be confident that your insurance company will pay for the repair of the damaged vehicle. They will cover for any liability claims you are held responsible for that may have caused injury to another person or their car.

Basically, in case of a car crash, a car insurance policy covers the (1) driver, (2) all passengers, and (3) other individuals involved in the accident. If the other party in the accident you’ve been involved to have their insurance policy, they must first make a claim under their policy. Just remember that most car insurances do not cover the loss of personal possessions in your car should a thief steal from it.

When it comes to car insurance policies in Canada, there are two types: mandatory and optional. In this article, we will go over both types to answer the question: do you really need comprehensive car insurance?

A Newbie’s Guide to Car Insurance in Canada

Before going to the specifics, let’s first outline the basic laws newcomers in Canada should observe.

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Insurance is a non-negotiable necessity that you should invest in if you plan to temporarily or permanently stay in Canada simply because it gives you the peace of mind that you are financially protected in case of an emergency.

Suppose you’re a newbie in Canada, welcome! We know you’ll enjoy your stay here. Moving to another country will require driving. A Canadian driver’s license is required if you want to drive in Canada. If you want to drive within Canada, you can use your license only within 60 days. However, if you want to apply for a Canadian driver’s license for a longer period of time, taking an exam for that is mandatory.

If you’ve got your license already, here are a few requirements to remember before you start hitting the road:

If you buy or own a car, you are required insurance coverage.

If you will be driving a car that belongs to a relative or friend, make sure you are listed on their car insurance plan.

It is ideal to buy insurance for a car you’ll be renting. Just make sure to double-check which ones are already covered by your travel insurance policy and credit cards to avoid overspending on these policies.

Types of Mandatory Car Insurance in Canada

Third-party liability insurance

If you have caused an accident, your third-party liability insurance will cover the medical treatment and repair costs of the people you injured and the damaged properties. Once the injuries are healed, and the repairs are done, the claim will be closed.

If an accident occurs and no one is at fault, everyone involved should deal with their insurance provider for their claims. The insurance companies will be the ones to determine who owes what.

In Canada, third-party liability insurance starts at $200,000. However, in Quebec, the minimum amount is $50,000.

Statutory Accident Benefits

If you got into an accident, your accident benefits would help cover any expenses for the rehabilitation, income replacement, attendant care, and funeral expenses (up to a certain limit) for you, your passenger, and other third-party individuals such as another motorist or pedestrian, regardless of who was at fault.

This type of insurance is often set at $1,000,000, and its benefit payouts are the priciest among the car insurance.

Uninsured/Underinsured Motorist

This insurance will cover the medical bills incurred from the injuries you and your family members sustain in a crash caused by a driver without insurance. Should your uninsured driver be identified, this insurance can also cover the damages done to your vehicle.

If no one is at fault, the repairs to your vehicle will be covered by this insurance. However, if you are proven to be at fault, you will be required to buy optional insurance if you want your insurance company to cover the repair costs for your damaged car.

Types of Optional Car Insurance in Canada

Collision

If you are at fault or partially at fault in a car accident, you can add collision insurance to your existing policy so that you can have your car repaired or replaced.

Comprehensive

Comprehensive car insurance serves as protection for your car when you are not driving. This includes situations when it is stolen, scratched, vandalized, or damaged by accidents wherein no one is at fault, such as falling objects, fire, natural disasters, riots and similar situations. This may not be mandatory, but it is highly recommended if you are driving a newer car or cannot afford to spend on repairs or car replacement.

Do You Need a Comprehensive Car Insurance?

It is recommended to get comprehensive car insurance. Having one means your car is covered when unexpected events aside from accidents damage your car. It is the most extensive form of car insurance, so you are assured that you get the best value for your money in the long run when you get this optional car insurance policy.

Depending on your province and insurance provider, comprehensive car insurance typically costs between $100 to $300 a year.

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