Do You Have Enough Auto Insurance Coverage?

Although auto insurance is required to drive in Canada, requisite coverage minimums differ by province. These minimum requirements cause many drivers to believe this is appropriate coverage. Everyone’s insurance needs are unique to their own circumstances, and the minimum coverage doesn’t represent the average 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 discover the associated issues that you should be aware of. Your “take aways” will be a richer 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 guard against.

3rd Party Liability Third party liability coverage is in included in every Canadian vehicle 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 related to any injuries sustained by you or your passengers during a traffic accident. It does not matter who caused the accident. 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 Even though auto insurance is mandatory in every province, millions of drivers continue to drive their automobiles without insurance. For this reason, car insurers attach an uninsured vehicle feature to their insurance policies. It provides benefits in the event you or your family are injured or killed by a driver who is uninsured. These benefits also take effect if the offending motorist is a hit-and-run driver.

Direct Compensation – Property Damage Coverage This feature is mandated in Ontario. It provides benefits in the event your vehicle sustains damage from the actions of another driver. There are a few conditions that must be met in order for these benefits 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 insurer that is licensed in Ontario.

How Much Coverage Should You Purchase Thusfar we have gone through the key components of a car insurance policy as mandated in most provinces (with the exception of Direct Compensation – Property Damage coverage). This discussion neglected the larger question, which is your requirement. In purchasing the minimum insurance allowable in your province (like millions of others) you are exposed to huge potential financial losses. A court ruling against you could be devastating.

Lets say you live in Ontario and decide to invest in the minimum third-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 vehicle insurance limit is only $200,000, you find yourself responsible for paying the balance – or, $800,000. As a result, you are financially devastated.

In purchasing the minimum insurance coverage required by law, millions of drivers are opening themselves up to some extreme financial risks. Canadians get into car accidents daily, and the cost of the average accident goes up every year with inflation. We need to be vigilant that we have necessary third party liability coverage, accident benefits, and uninsured vehicle compensation. Otherwise we open ourselves up to unnecessary risk, and potentially disastrous repercussions.

Many people aren’t aware that they can do online comparison shopping for car insurance quotes. In comparing car insurance quotes, you can not only compare price but also coverage. You can often find better coverage for the rates you are already paying. It just makes sense to shop around.

Contrast your financial situation with your tolerance for risk. Look into how much it would cost to increase your limits to an appropriate level. Then, compare insurance quotes online to find the most attractive package that accommodates your needs. You may be surprised by the bargains you uncover.

Comparing car insurance quotes is the best route to cheaper car insurance. Our website can get you on your way to cheaper driving this year, so get the car insurance quote you’re after today!

Tags: auto insurance, car insurance, Insurance, insurance coverage, risk

Category: Insurance