Do You Have Enough Vehicle Insurance Coverage?

Even though auto insurance is required to drive in Canada, requisite coverage minimums differ by province. These minimum requirements cause many drivers to conclude this is appropriate coverage. Everyone’s insurance needs are exclusive to their own circumstances, and the minimum coverage doesn’t equal 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 issues, and discover the associated issues that you should be aware of. Your “take aways” will be a firm 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 bundled in every Canadian car 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. Most 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 from injuries sustained by you and your passengers from a traffic accident. The cause of the accident doesn’t matter in this regard. Statutory benefits cover rehab, hospital charges and associated expenses. They also compensate for lost income due to your injuries, and cover caregiver expenses. Statutory accident required minimums vary by province. In Ontario there is a required minimum of $100,000 coverage (besides “catastrophic” injuries)

Coverage from Uninsured Vehicles Although every Province and Territory has mandated auto insurance; many drivers on the road don’t have automobile insurance coverage. In order to protect motorists, insurance companies have added an ‘uninsured’ provision to their policies. This provision provides benefits to you and your family should someone without insurance get in an altercation with you involving damages. These benefits are also used if you’re involved in a hit and run altercation, and the offending driver takes off.

Direct Compensation – Property Damage Coverage This feature is mandated in Ontario. It provides benefits in the event your vehicle is damaged from the actions of another driver. There are a few prerequisites 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 auto involved in the incident must be covered by an insurer that is licensed in Ontario.

Identifying The Amount Of Coverage To Purchase Thus far, we’ve discussed the basic components of a car insurance policy as mandated in most provinces (with the exception of Direct Compensation – Property Damage coverage). This discussion missed the larger context of need. Millions of people are exposed to a financial loss because they are buying the minimum amount required by their province’s law. A single court judgment could potentially devastate these people financially.

Lets say you live in Nova Scotia and decide to invest in the 3rd party liability minimum requirement of half a million dollars. Say you are found to be at-fault for a traffic accident that leaves the other driver in a hospital bed for the rest of their life, and the damages cost 1.5 million dollars. Your insurance company would cover the first half million, leaving you with a hefty difference of a million dollars. A one million dollar debt would certainly have quite a negative impact on the lifestyle of you and your family.

Millions of Canadian drivers are exposed to this type of situation. Most drivers purchase the minimum required third-party liability, statutory accident benefits, and uninsured vehicle benefits without realizing they are vulnerable to a potential financial loss. Again, one accident could have a horrible impact on your lifestyle.

Many people aren’t aware that they can do online comparison shopping for car insurance rates. In comparing car insurance quotes, you can not only compare price but also coverage. You can often get better coverage for the rates you are presently paying. Comparison shopping for your insurance is smart.

Have a good look at your car insurance needs in light of your financial situation. Investigate how much it would cost to increase your limits to an appropriate level. Then, compare vehicle insurance online to find the most attractive package that accommodates your needs. You may be surprised by the bargains you uncover.

Before you renew your car insurance, be sure to shop around. Our car insurance quote can save you time, and give you options you might not have considered otherwise!