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Canadian Auto Insurance Coverage Explained

June 22, 2010

Shopping for vehicle insurance can be confusing for consumers – there are countless options available for automobile owners, and just as many prices to match.  Understanding what each type of coverage can provide and what it costs can give you comfort and save you money.  Here are some tips to make the process of finding the right car insurance faster and easier.

Liability Insurance

The only mandatory insurance coverage on vehicles is liability.  This insurance protects others from damage that might be done by a driver while operating a vehicle.  This includes any losses, including injury, death and property damage.  Liability insurance in Canada also includes coverage to protect drivers against financial losses they might suffer due to their own medical expenses, and the loss of income that they could incur if injured in an automobile accident while driving.  This portion of insurance coverage is referred to as accident benefits, and can be claimed even in the case of an at-fault accident.

Collision Coverage

Collision coverage provides financial compensation for damages that occur to the vehicle due to a collision or accident.  Collisions include accidents with another vehicle or a stationery object.  Collision insurance is often an expensive component of any insurance policy, and varies depending on the vehicle, driver, and many other factors. 

Comprehensive Coverage

Comprehensive insurance coverage protects drivers against loss from events that aren’t directly related to the operation of the vehicle or the driver’s actions.  This includes loss due to the actions of others, such as, vandalism (i.e. slashed tires or body damage – “keying”) or theft (including the damage caused by thieves entering the vehicle).  Coverage for environmental occurrences causing damage are also included under comprehensive insurance, including windstorms, floods, hail, etc.  Additionally, in the case that a vehicle is damaged by a flying object (i.e. a construction pylon, debris from another vehicle) while parked, comprehensive policies will protect the driver from financial liability.  Comprehensive insurance is often reasonably priced and provides peace of mind against unfortunate, uncontrollable occurrences.

Insurance coverage and costs vary drastically depending on the types of coverage purchased.  Auto insurance providers offer many options and competitive rates on their policies, but consumers have to be prepared to shop around to get the best rates.  When looking for cheap auto insurance, consumers can look for quotes in many ways, but the easiest and least intimidating way is often looking for insurance online.   This allows auto insurance buyers to shop at their convenience without any external pressures, while comparing large quantities of quotes in a simple and effective way.

  • Joe

    I will be travelling abroad for 5 months, My vehicle will be parked and I must renew my car insurance. Can I get insurance for comprehensive only???

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hi Joe,

    Speak to your broker/agent to find out what options are available for you and your situation.

  • Pingback: Do I Really Need Fully Comprehensive Insurance? | SEEROADCONDITIONS.COM

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello
    She will likely be covered under an international licence but if she has an at fault accident, it will have an impact on your son’s insurance.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    It is likely that comprehensive will not cover that as your vehicle was being driven at the time. Double check with your insurance company.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    In Ontario, it is the owner of the vehicle whose auto insurance policy will pay out if there is an accident regardless of who is driving the vehicle.

    You have to remember that if you lend your car-you are lending your car insurance. If your friend gets into an accident where she is at fault while driving your vehicle, you may end up with an increase on your insurance.

  • Ibz

    Hi,
    I am visiting Ontario for four months and I am carrying a multi year visitor visa and I have a UK driver’s licence. Can I drive my sister in law’s vehicle while I am in Ontario during this visitation.

  • Michelle Burgess

    My husband got hit by a car while walking across the street at a four way stop. The man who hit him didn’t give him any of his information. Is there anything we can get our insurance to pay for in this case? ( lost wages, etc)

  • Julie Tenkorang

    i have a friend who had a mattress fall off her SUV on her trip to the eco-centre. Another car came along & drove over the mattress, getting it stuck under her car, causing some damage to her car. Is my friend gonna have to pay for the damage to the other drivers’ car?

  • craig

    would comprehensive cover any cost of repairs if you accidently put the wrong fluids in the wrong place

  • Brian Wiebe

    Comprehensive coverage’s vary from Province to Province, for example in Alberta many people (including insurance folk) say that Comprehensive covers everything that is not collision. This is not correct, the list of Coverage’s is laid out in the Auto Policy. Your Insurer may or may not cover this loss. They view it as a “client service” your claim would be reviewed on a case by case basis. And don’t blame your Broker or Adjuster, each Province writes its own policy, and both are bound by it. Good Luck!

  • doug

    If my wife backed into a tree on a newer car . What Insurance would that go under Collision or Comprehensive?

  • InsuranceHotline

    it will be paid under collision if you have that coverage.

  • Zac

    Is comprehensive coverage mandatory on all brand new vehicles? If not , what year of vehicle is old enough to only get liability? also does it make it more expensive to have comprehensive compared to just basic liability? thanks.

  • InsuranceHotline

    Optional physical damage coverage is not mandatory from an insurance company perspective. It might be mandatory by the lender if you have financed or leased your vehicle.

  • Nicole

    So I bought a car a year and a half ago it’s used beautiful car the moon roof at the front the seal stuff was raised so I asked for it to be fixed as a condition of me purchasing it … they “fixed it ” told me they put a new seal on it blah blah .. looked amazing .. about 6 months later the seal is all rising eveeytime it rains or snows it rises up and it all out and rippled and looks atrocious.. I took it for a quote to get it fixed at Auto glass they told me what they did was ridiculous and should have done it and I have to replace the whole main roof window to fix it… roughly about 10,000 … now is that covered in my car insurance or my “extra warranty ” I purchased with the car