Auto insurance across Canada is pretty standard when it comes to the types of insurance available. Generally, you will have your mandatory car insurance and then you will have optional car insurance coverage available as well. Different provinces have different amounts of mandatory coverage. You will also find that there is a major difference in the price of insurance depending on where you live in Canada. However, there is minimal difference in the types of auto insurance coverage that are available across the country. In some provinces, you have to purchase insurance through the government, and in others, you are forced to buy through a private insurance company. However, no matter where you buy insurance from, you will find that the plans available are very similar.

Mandatory Insurance Coverage

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No matter where you get insurance in Canada, you are forced to get the mandatory coverage for your province. Usually, there are a few different types of insurance that are mandatory. Including the following:

Liability

Liability is a type of coverage that you need when personal injury occurs. Generally, liability is the thing that costs you the most money when you get insurance. Every province other than Québec has a minimum liability of $200,000. This liability presents the highest risk for an insurance company as it means that they are going to be paying out a huge loss. However, liability doesn’t get paid out too often and when everyone’s insurance policies are combined, most of the time, insurance companies end up turning a profit.

Medical Coverage

In Canada, it is generally stated that there is free healthcare. However, government healthcare benefits only stretch so far. In Canada, you still have to pay for medical services performed in other countries, for drugs and therapists as well as for medical equipment to help mobility. The prices of these things can be very expensive depending on the extent of your injuries. Luckily, you can pick up a medical coverage plan in any province in Canada to make sure that you don’t have to pay for any of your healthcare expenses. Usually, there is a mandatory amount of medical insurance coverage that you need.

Disability Coverage

You never know what the extent of your injuries might be. Due to this reason, you might want disability coverage. In most provinces, you are required to at least have some of this coverage. Disability coverage gives you compensation for when you can’t work as a direct result of an injury that you received in an accident. You will also use disability coverage for things like your mortgage, monthly bills, food etc.

Optional Insurance Coverage

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Comprehensive Coverage:

Usually, you are not forced to get a comprehensive insurance policy in Canada. Comprehensive insurance is almost always an extra insurance policy that you can opt into. This insurance policy covers you for when damage is done to your vehicle as a result of things other than a car accident. Think things such as tornadoes, earthquakes, vandalism etc. Usually, making a comprehensive coverage claim does not increase your insurance premium. This is due to the fact that damage that requires comprehensive claims are almost never the fault of the driver.

Collision Coverage:

This is the type of insurance that you will need in order to make sure that your vehicle is covered after you get into a car accident. Collision covers damage done to your vehicle no matter whether you or the other driver were at fault for the accident. Sometimes, if you make a collision claim and you are not at fault at all for the accident, you will not see your insurance premiums rise. However, it really depends on the insurance company that you’re dealing with and how risk-averse the company is.

Types of Insurance Systems

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Tort insurance system:

When a province uses a tort insurance system, this means that the drivers are allowed to sue. Depending on where you live in Canada, there might be a limit on the amount that you can sue the other driver for. In some provinces, you’re not allowed to sue for pain and suffering. In other provinces, you are allowed to sue for pain and suffering. The more that the province allows you to sue for, the larger the risk there is for insurance companies. Under a tort system, insurance companies do carry a large amount of risk, especially when there are no limits on the amount that the driver can sue for.

No-fault insurance system:

Under a no-fault insurance system, the insurance company is always at risk. With a no-fault insurance system in place, the insurance company always has to pay for damages when an accident occurs. No matter who caused an accident, to begin with, each insurance company is liable to pay for their own client’s damages. Some insurance companies do penalize drivers who get into accidents where it was not their fault. Other insurance companies do not punish drivers that get into accidents where it was not their fault. Generally, the more accidents you get into, whether it was your fault or not, the more risk you have of your insurance premiums rising.

Combination Of Tort And No-Fault Insurance System:

Some provinces use a mixture of these two different types of insurance systems. Some allow drivers to be able to opt out of the no-fault insurance policy and get a tort insurance policy. It really depends on where you are located in Canada. There are certainly benefits to both of these insurance systems. No system is perfect, which is why there are different systems depending on where you live.

To Conclude:

When you buy car insurance it is extremely important to make sure you get what you need. After an accident, you are not allowed to go back to your insurance company and asked for more coverage. When an accident occurs, you’re only allowed to receive the compensation for the coverage that you already have. If something occurs with your vehicle or happens to you or the other driver and you don’t have insurance to cover it, you are going to have to pay out-of-pocket for the damages.

Resources:

https://www.investopedia.com/terms/a/automobile-liability-insurance.asp
https://www.progressive.com/glossary/comprehensive-and-collision/
https://www.avivacanada.com/blog/2014/11-07/fault-or-no-fault-whats-difference
https://www.sunlife.ca/ca/Insurance/Health+insurance/Personal+health+insurance?vgnLocale=en_CA
https://www.canada.ca/en/financial-consumer-agency/services/insurance/disability.html