Looking for new car insurance can be confusing, especially when each province has different rules. In this guide, we answer the top 10 most common questions.
1. What Insurance Coverage Do I Need to Drive a Car in Canada?
Manadatory coverage varies by province. It may include Third-Party Liability, Accident Benefits, Uninsured Automobile coverage and Direct Compensation–Property Damage (DCPD).
If you have a car loan, the lender may require additional coverage to protect its investment. Lenders typically require collision and comprehensive coverage along with minimum liability coverage. Each provincial government in Canada sets the minimum liability insurance coverage for its drivers.
2. What Is Accident Forgiveness?
Accident forgiveness means the insurer agrees not to count your first qualifying at-fault accident against your rate at renewal. You must add accident forgiveness to your car insurance policy before an accident occurs.
Car insurance companies in Canada have different limits or exclusions in their accident forgiveness terms. Accident forgiveness also doesn’t usually transfer when you change insurance providers.
3. What Is a Car Insurance Deductible?
A car insurance deductible is the amount you pay toward a car insurance claim. For example, if you carry collision and comprehensive insurance, you may have two deductibles, one for each coverage. They can be different amounts. Common deductibles include $500 and $1,000.
In most cases, the insurance company subtracts the deductible from the claim payment. Agreeing to a higher deductible can help you pay lower car insurance premiums. However, it also increases the amount you must pay when making a claim.
Read More: Car Insurance Deductibles Explained
4. Why Do I Have No-Fault Insurance? Is That a Good Thing?
“No-fault” is one of the most misunderstood terms in Canadian insurance. Someone can still be held responsible after a collision. No-fault generally means that you deal with your own insurer for certain claims instead of the other driver’s company. The exact process depends on the province and your coverage.
Specific provincial rules determine fault. In Ontario, those rules are set out in Regulation 668 under the Insurance Act. They allow an adjuster to assign each driver anywhere from 0% to 100% of the fault, regardless of what the police report says.
Read More: A Guide to No-Fault Insurance in Ontario
5. How Does My Insurance Company Decide What My Car Is Worth After an Accident?
If your vehicle is declared a total loss, the insurer will generally pay its actual cash value rather than the cost of a new car. However, drivers of a new vehicle may be able to purchase a waiver of depreciation, known as OPCF 43 in Ontario.
The covered period depends on the wording of the endorsement, so you should read it carefully. The waiver of depreciation must be written into the insurance policy before an accident occurs. It cannot be purchased retroactively.
6. Can I Shop for New Car Insurance Before My Old Policy Expires?
Yes. There’s no reason to wait for an existing car insurance policy to expire before shopping for new car insurance rates.
When switching insurance providers before a policy expires, a cancellation charge might apply. Compare the coverage, deductibles, premiums and cancellation costs before switching.
7. What Is the Difference Between a Car Insurance Broker and an Agent?
Drivers in Canada can purchase car insurance directly from an insurance company, through an insurance agent or through an insurance broker. An agent generally represents one insurance company.
A broker has access to products from several insurance companies. The broker helps compare different coverage choices and costs. The choice of which car insurance policy to purchase is always yours.
In Ontario, brokers are licensed through the Registered Insurance Brokers of Ontario (RIBO), while FSRA licenses agents and insurance companies.
8. What Is the Best Way to Get a Good Car Insurance Quote?
The best way to get a car insurance quote is to compare offers from several insurers rather than contacting only one company. Rates can vary because every insurer evaluates your driving history, vehicle, location and coverage needs differently.
An insurance comparison platform such as MyChoice can help you compare available offers. Make sure each quote uses the same coverage limits and deductibles.
9. How Do I File a Car Insurance Claim?
After an accident, pull over safely and call 911 if anyone is injured. Contact your insurance company as soon as possible and provide key details about the incident, including when and where it happened, what occurred and information about everyone involved.
An insurance adjuster will review the claim, ask follow-up questions, assess the damage or injuries and guide you through repairs or settlement. Photograph the vehicles, licence plates and the wider scene if it is safe to do so. Exchange driver’s licence and insurance information with the other driver.
10. Who Can Drive My Car Under My Insurance?
Insurance generally follows the car when someone borrows it with your permission. Tell your insurer about anyone who lives in your household or regularly uses the vehicle.
If someone else has an accident in your car, your policy will generally respond first. An at-fault accident could affect your auto insurance rates. Coverage may be affected if the driver was excluded from the policy, unlicensed or did not have permission to use the vehicle.