Driving a car without insurance is like inviting problems for free. every country has a penalty for driving a car without insurance. Insurance is not only a piece of paper but it ensures that every harm done to every person involved in any kind of car accident gets covered. Every individual owning a car needs to own its insurance because it ensures that they stay on record if any accident happens because of that car owner. It’s not of tracks their identity that can be very helpful in case of hit and run cases. if a car is insured, any damage to any person or property incurred due to an accident will be covered by the insurance company and the guilty driver will be prosecuted under the law. In this read, we will outline how the car insurance in Canada work and why you need that.
Canada has its own set of rules and regulations for a person to get their car insured and also have well-defined penalties for the type of damage incurred due to their car. Car insurance in Canada covers the damages incurred to the owner, passengers, pedestrians and the property affected by the accident. The reasons to get a car insured are:
- Save your money in case of any damages to your car because it will be covered by insurance.
- If you are held liable to an accident increasing damage to a person or a property then your insurance company will settle that liability claim.
The coverage range of insurance policy in Canada is mentioned below:
The insurance company is not liable to pay or settle a claim if you deliberately cause a situation which is not mentioned in its claws. the domain of coverage of your insurance is limited by your insurance company based on the following grounds.
- Liability insurance: If you are held responsible for losses such as injury or death in an accident where your vehicle was involved, then the people who suffered due to this will receive the compensation by the insurance company. It also compensates the owner in case of an accident in curd due to other vehicles. But one thing to remember disclaims only have a certain settlement limit. If the damages in curd cost more than the settlement claim then the owner has to pay the claim from their pocket.
The liability insurance also does not cover the repair cost of one’s vehicle. It can be covered by buying additional insurance and services.
- Collision insurance: This insurance pays a senior if you have been hit by another car or have crashed your car into a pole. Many insurance companies in Canada include collision insurance as mandatory.
- Comprehensive insurance: comprehensive insurance also takes care of your vehicle in case of any damage but it is a special case of Collision insurance where is your car has not been hit by another car or crashed into some pole. comprehensive insurance covers the cost of repairing or replacing your car if the damage has been caused to it deliberately or by natural disasters.
- Damage to windshield due to falling debris.
- Vandalism or deliberate encounter.
- Theft or robbery
- Accidental benefits or bodily injury insurance: this insurance covers the expenses of your medical bills in case any physical harm incurs to you in an accident. Accidental benefits for bodily injury insurance is a mandatory part of your car insurance. The premium is paid as a part of driver’s license registration without any extra cover charge.
- Additional insurance coverage: These insurance are additional and imply to certain intangible damages like trauma or senior citizens on pension.
- Optional insurance coverage: this insurance coverage are specific from person to person and not all of the optional insurance can be bought by a person. this insurance is bought in case the basic policy is not covering the type of damage you anticipate to get into. these types of insurance are called Rider or endorsement in Canada. the reasons people by optional insurance coverage are due to some reasons which are mentioned below:
- In case of requirement of an emergency roadside assistance.
- In case any kind of physical damage has been incurred to a rental car.
- If you have rented a car or using an alternate transport service because your car is being repaired.
- Depreciating the asset to receive the full value that your car costs.
- To plead for forgiveness for not increasing your premium if you are held liable for an accident.
Insurance cost and Premium policy
How much does a car insurance cost in Canada and how the premium is calculated?
The cost of car insurance depends on a variety of factors which include the company you are getting it from. In order to get the car insurance in Canada you need to do exhaust research on available companies. There is no centralized Car Insurance Corporation or government health insurance company that offers a fixed price for your car insurance. While the factors may vary from company to company but some of these factors are common everywhere and are always taken into consideration while issuing license and insurance for a car. These factors that determine the cost of car insurance and it’s respective premium are mentioned below:
- Age: This factor is inversely proportional to the cost of your car insurance. The older you are the lesser your insurance cost is going to be and vice versa.
- Gender: When generally are involved in less damage increasing accidents as compared to men. Men are usually insured for about $1900.
- Driving history: if you have been in an accident in your past and were liable for your actions, chances are your insurance cost is going to be more than expected.
- Driving Experience: Canada does not consider driving experience from other countries. the counting is done in terms of your driving years in Canada. The more experienced you are the less your insurance is going to cost.
- Type of vehicle: Cars equipped with high safety features usually do not burn a hole in your pocket while insuring your car. The cheaper your car is, the cheaper your insurance is going to be.
- Vehicle usage: The more time a car spends on the road the more its chances of getting into an accident increases and so does the insurance cost.
- Winter tires: this is a new addition in the insurance policy. Being a cold country where the road gets slippery during winters, having a winter tire gets you a discount on your car insurance.
- Location: If you live in a crowded area in Canada your insurance cost is going to get high because a busy road is where the maximum number of accidents happened.
On average, every Canadian car owner gets insured for about $1300. Ontario has the highest insurance rates in Canada followed by Toronto and other cities. Four Points that are mandatory in terms of compensation structure for every City are:
- Statutory Accident Benefits Coverage: It safeguards you against your fault.
- Direct Compensation & Property Damage Coverage: In case there is a loss of your property kept inside your car at someone else’s fault.
- Third-Party Liability Coverage: A minimum penalty of $200,000 is charged in case someone gets killed in a car accident and their property gets damaged.
- Uninsured Automobile Coverage: To determine the identity of the liable person in case you and your family members face fatal damages.
How to settle an insurance claim?
- You get in an accident you need to raise a claim to your Insurance Company.
- The company will review the clean and decide to settle.
- Make sure that you pay the deductibles to proceed forward with the claim.
- Finally, the insurance company will decide how much you will get as a settlement after adding your deductibles to fulfill this amount.
In case you have a car loan then the insurance company will take the amount as much as your vehicle’s cost to your lender.
What remains uncovered by your car insurance?
If you have got the car insurance in Canada then it is essential to know what is covered and what is not covered under your agreement with insurance company. Car insurance does not cover the cost of your personal belongings and positions. In case someone steals something from your car the insurance company is not bound to pay for this nature of the loss.
Getting car insurance in Canada might seem an intricate job but it is highly effective and safeguards both the driver and the people involved in the accident. it protects you against Mini legal action that can be taken against you if found guilty. Insurance Company protects your rights and money as well. All you need to do this get your car insured and pay the premium on time. Always be smart in choosing your car insurance by making sure the premiums are low and not frequently increasing as per the company policy. Look carefully at the terms and conditions before getting your car insurance. We will be covering more informative articles on TheCarsInsider regularly, stay tuned.