Is Your Vehicle Insurance Coverage Sufficient?
While automobile insurance is mandatory throughout Canada, minimum requirements vary by province. These requirements offer little help in suggesting befitting coverage amounts for motorists because each person’s insurance needs are unique to their personal circumstances. The danger is that each province’s requirements cause policyholders to invest in little more than the minimum. This lays the foundation for a potential financial loss.
What variety of insurance coverage should you have? How much is enough? Read on and we’ll take a closer look. Discover the integral issues that effect liability. The medical benefits, the effects of uninsured automobiles, and the other components that comprise a vanilla auto insurance policy. Although I can’t personally recommend the right amount of coverage for you, I plan to give you a better understanding of what to be familiar with. You’ll learn key items to be aware of in preventing yourself from unnecessary financial losses.
Third-Party Liability Coverage All Canadian insurance policies have a component devoted to 3rd party liability. It reflects the amount of financial protection you have in the event you are found responsible for injuring or killing another person, or damaging another person’s property. If a lawsuit is brought against you, this insurance will distribute claims up to your limit. Most provinces require a minimum of $200,000, but some require more. For example, Nova Scotia requires $500,000.
Statutory Accident Benefits This portion of your insurance pays for 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 pay for rehabilitation, hospital costs and associated expenses. They also compensate for lost income due to your injuries, and take care of caregiver expenses. Minimum statutory accident requirements vary by province. In Ontario there is a mandatory minimum of $100,000 coverage (besides “catastrophic” injuries)
Uninsured Vehicle Coverage In the event you are struck by an uninsured motorist, you have an ‘uninsured’ coverage feature to offset your damages. This feature covers the costs associated with you and your passengers. It is this coverage that is also applied in the event that you are involved in a hit & run accident, where the other driver takes off.
Direct Compensation Property Damage Under “Direct Compensation Property Damage” (DCPD), your own insurance company settles the cost of repairs to your car in an accident, determined by the degree to which you were not at fault. For example, if I was 25% at-fault and 75% not at-fault as determined by the insurance company, I would claim 75% under DCPD and 25% under collision coverage. In Ontario I would collect this from my own insurance company rather than chasing after the third party’s insurer.
How Much Coverage Should You Purchase Thusfar we have gone through the key components of an automobile insurance policy as mandated in most provinces (with the exception of Ontario’s DCPD coverage). This discussion neglected the larger question, which is your requirement. In purchasing the minimum coverage allowable in your jurisdiction (like millions of others) you are exposed to huge potential financial losses. One court verdict could potentially be devastating.
Lets say you live in Nova Scotia and decide to invest in the 3rd party liability minimum requirement of five hundred thousand dollars. Say you are found to be at-fault for a traffic accident that leaves the other driver bedridden for the rest of their life, and the damages total 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 your books.
If you choose to get the minimum insurance requirement in your province, you potentially are opening yourself up to huge financial risks. The minimum requirements are just that – minimums. Have a good look at your: third-party liability, statutory accident, and uninsured vehicle benefits. Given the growing costs associated with medical procedures and car repairs, you might decide that the minimum is not enough for your family’s needs.
It is wise to shop for car insurance quotes on a regular basis. Online comparison shopping can not only uncover the better rates but also the best values. You might discover that you can get more coverage for less money than you’re presently paying.
Take the time to review your auto insurance needs in light of your financial situation. Look into what it would cost to increase your coverage to an ideal 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.
If you have a clean driving record, you might like to get some car insurance quotes. If you’ve lost demerit points and been deemed a high-risk driver, high risk insurance quotes might be what you’re after.
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