Car insurance coverage is mandatory in Canada, but did you know that some portions of it are optional? This can get confusing when searching for car insurance quotes. Which options should you choose? What is mandatory, and why is it mandatory? How can you get affordable car insurance while making sure you have the right pieces in place? Today we will walk you through eight types of car insurance so you can make an informed decision. At the end, we will show you how to get car insurance quotes specifically tailored to your needs.
Let’s start with the mandatory coverage. This is the coverage that will always appear on your car insurance quote because it is required by law.
- Liability coverage: This covers damages to the other driver or other person’s damaged property. This coverage is not very expensive, but it is also not very high. Unfortunately, in some provinces the wronged party can sue you, pushing your costs into the hundreds of thousands, if not over a million. If you only have the bare minimum required by law, (for example, it is just $200,000 in Alberta) you could quickly face financial ruin. For this reason, we strongly advise topping up this coverage. The small investment you pay into the premium could pay off greatly if you are sued.
- Uninsured motorist/hit and run: One of the first things we learn when we start driving is that you never leave the scene of an accident, and you always carry your proof of insurance with you. Unfortunately a disturbingly high number of drivers ignore this advice. Uninsured motorist/hit and run coverage protects you when you are in an accident with such a driver. Just as your liability insurance protects other drivers, this coverage is designed to protect you. Moreover, according to the legal professionals at The Pendergrass Law Firm, it is important to have vehicle insurance. So, when you are involved in an accident you can claim car insurance. But after the accident, it is recommended to take assistance from your lawyer.
These are the coverage pieces that you can pick and choose among to create your ideal coverage scenario.
- Collision insurance: Can you afford to replace your car out of pocket? If not, be sure to add collision insurance. This is the coverage that pays to fix or replace your vehicle.
- Comprehensive: This is a “catch-all” type of coverage because let’s face it – an accident is not the only thing that can happen to your vehicle. If you don’t have a garage and your car is damaged in a hailstorm, your car is vandalised or stolen, comprehensive provides a benefit to help you restore your ride. Life is unpredictable so when looking for affordable car insurance, be sure to weigh the cost of the risk against your cost of insurance. When you look at it that way, you see that comprehensive is a good piece to add.
- All perils: You know the movie trope where “the call is coming from inside the house!” That’s not too far off when it comes to another insurable risk. Perhaps you have a teen driver that takes your car without permission. Or, you have added a new driver in the household to your insurance as an additional driver. If they damage your car, all perils comes to the rescue. Strongly consider all perils when sorting out your types of car insurance if you have teens or an additional driver in the house.
We’ve listed some of the more common auto insurance types above, but there are coverages that are much more specific in nature.
- Glass coverage: Rock chips and cracks are never ideal, and you can get glass coverage to help replace your windshield when needed. Before you add this coverage, however, stop and think – what is the premium vs the cost of a new windshield? This coverage makes sense if your windshield is at high risk (such as a lot of travel on gravel roads or behind large semi trucks). If you seldom get chips and cracks, however, consider pulling the cash from your emergency fund when necessary.
- Classic car insurance: If you have lovingly restored, or inherited, a classic car, look into this specialty car insurance coverage. Depending on which agency or brokerage you choose, you can get some very useful solutions such as no accounting for depreciation (classic cars are valued differently than your standard commuter car) and flexible usage (some classic cars are only driven during the summer or for special events).
- Tesla insurance: As one of the more technologically advanced cars on the market, replacing or fixing a Tesla can be very costly. Tesla developed its own insurance program with Aviva to help Canadian Tesla drivers get coverage that accounts for the enhanced safety and tech in their vehicles. When getting car insurance quotes, compare what this coverage offers if you drive a Tesla.
Deciding among all your options
Now that you know you have options when it comes to coverage, you need to know how to get car insurance that best suits your needs. When your quote only covers what is mandatory plus the specific coverage you need, you get affordable car insurance that offers peace of mind in addition to financial protection. So, how to get car insurance? We recommend using a broker.
A broker, or brokerage firm, differs from an insurance agency. An agency only sells the products of one company. A broker, on the other hand, sells the products of several companies. Brokers have access to a wide variety of quotes and sometimes even wholesale pricing or little-known products. Since they get a commission from the insurance company when they sell a policy, broker services are free for you to use. Also, being commission based means that most brokers work independently – they are often not pushing to meet a quota nor under any pressure for a specific agency. This puts their attention 100 per cent on you and your needs.
In provinces where insurance is open to competition as opposed to only sold through the government, the competition works in your favour. For example, when shopping for a car insurance quote in Toronto, you have access to a variety of large, medium sized, and even bank insurers. When you get a car insurance quote from Saskatchewan, it is only offered through SGI. When there is competition for your business, similar coverage is sold at a variety of price points. Having a broker get customized quotes for you means you can quickly and easily see those price points, then make a decision.
Take it one step further – you don’t want any hassles in getting your insurance or having issues when making a claim, so read independent consumer reviews. InsurEye has gathered reviews from Canadian drivers since 2012, and does not allow insurance companies to alter the reviews. You can learn directly from other drivers which insurance companies have the best products and customer service.
When it comes to getting car insurance, save time, money, and hassles by learning about which coverage pieces you need, then working with a broker and reading reviews to get the best rates and service.