You’ve obtained your driver’s license, so you can now drive on your own, but remember, you must insure your car to be allowed to drive it.
A car insurance is a complex product. It is important that you carefully review insurance policies and compare them to see which one is the best for you.
In this article, we will explain how insurance policies are calculated, which one can be the best for you and why you have to subscribe an insurance.
WHAT INSURANCE COMPANY TO CHOOSE?
There are many car insurance companies that could be appropriate for you, so take the time to compare their prices and benefits.
Find below a list with the most popular car insurance companies in Canada:
WHAT TYPES OF COVERAGE ARE MANDATORY?
Whether you are leasing, financing, or you own your vehicle, some car-insurance options are mandatory. Though they may vary from one province or territory to another, there are some of them common to all regions.
• Third-party liability insurance:
This protection in useful if you injure someone or damage some else’s property.
• Direct compensation:
Damage to your vehicle is covered if you are not responsible.
• Non-Third-Party Insurance Coverage:
Medical expenses and damages are covered if an uninsured driver is held responsible.
• Compensation for Accidents:
No matter who is responsible, any medical or other expenses you are entitled to are covered.
THEN, WHAT ARE THE OPTIONAL TYPES OF COVERAGE?
The types of coverage below are optional, but depending on your needs, may be very interesting to consider:
• All-risk insurance coverage – This is the highest level of coverage available.
• Specified Perils Coverage – Protects your vehicle against specified perils such as loss by fire, flood, hail, or theft.
• Comprehensive – It covers all other insured damages to the vehicle (except for collision and release).
• Collision or upset – Covers damage to your car caused by a collision on the road with a vehicle or object.
• Accident Forgiveness Coverage – With this option, your auto insurance will not increase if you are found to be partially or fully at fault in an accident. This only applies if you have not had an at-fault or partially at-fault accident in the last 6 years.
• Non-stop driver protection – With Grand Touring Protection, you can travel in Canada and the United States with peace of mind.
• Replacement Cost for Total Loss – Get the full replacement value of your vehicle in the event of theft or extreme damage.
HOW IS CAR INSURANCE CALCULATED?
We strongly advise you to think about what kind of coverage you need, because insurance companies take several factors into account when calculating your car insurance. Here are some key factors that insurance companies consider when calculating your coverage:
1. Your car
The brand, the model and the year of your vehicle can have an impact on your car insurance. For example, you don’t need comprehensive insurance if your car is over 10 years old.
2. Frequency of vehicle use
This consists of the number of miles you drive each year. If you don’t drive a lot, you might pay less.
3. Your driving record
This takes into account how long you have had your driver’s license, whether you’ve had penalties under the highway code (e.g. speeding), the number of at-fault accidents you have taken part in, etc.
4. Where you live
Your car insurance will cost you less if you live outside a big city and if you have a car park.
SOME OTHER TIPS…
Most insurance companies will offer to pay your contribution monthly to spread out the amount, which can be very high.
Also, remember to shop around for insurance each year to ensure you always get the best price on the market.
Now that you know everything you need on car insurances, you are able to choose one wisely. So, drive safely, respect the rules, and enjoy!