Coverage is the maximum amount of money the insurance company will pay you if you make a claim for a loss or an event covered by your policy. It can vary between provinces.
All provinces – except for Nova Scotia and Quebec – require you have at least $200,000 in third party liability coverage and accident benefits. Some provinces require direct compensation property damage, while others don’t. Only Alberta does not require uninsured automobile protection.
It’s useful to familiarize yourself with insurance terms and the different types of coverage available to you:
Third Party Liability - Liability insurance is mandatory across Canada and is the basis for all plans. It covers damage caused to another vehicle or person in a crash. It gives you compensation for medical bills, legal fees, and other related costs.
Accident Benefits - This form of protection is required across the country. It provides you with financial assistance if you are injured in an automobile accident. It doesn’t matter who is at fault. It helps to supplement medical costs not covered under your provincial health care plan. This includes things such as rehabilitation, attendant care, and even income replacement.
Direct Property Compensation Damage (DCPD) - DCPD is available in several provinces. It covers damage to your automobile, its contents and loss of use where another driver is at fault. It is only applicable in provinces where the coverage is mandated.
Uninsured motorist – This is protection against uninsured or unidentified drivers. It is mandatory in all provinces except Alberta. This covers you if you’re injured or killed by an uninsured motorist. It also applies if you’re the victim of a hit and run.
Collision - This optional coverage pays for damage to your vehicle caused by upset or a collision with another object. It would apply, for example, if you lost control of your vehicle on an icy road and hit a guardrail.
Comprehensive - Optional comprehensive insurance protects you against damage or loss because of non-driving events. This includes things such as high winds that cause flying debris to damage your car, falling trees, weather, theft, vandalism, and more. It includes all perils, except for collision, or damage caused by theft by a person residing with you or who repairs your car.
All Perils – This optional coverage covers all causes of loss except those directly mentioned as exclusions in your policy. It also covers loss or damage in the event your vehicle is stolen or damaged by an additional driver or someone in your household.
Specified Perils – This pays only for losses caused by perils specifically listed in your policy. These perils include such things as: fire, theft or attempted theft, lightning, hail, rising water, earthquake, windstorms, an explosion, riot, or civil disturbance, the falling or forced landing of an aircraft or its parts, the stranding, sinking, burning, derailment or collision of any kind of transport where a described vehicle is being carried on land or water.
Roadside Assistance - Emergency roadside assistance provides you with help if your vehicle breaks down or has mechanical issues. This includes boosting the battery, tire changes, locksmith services, towing, and more.
Optional coverages - Depending on your driving record, you may not be eligible for all types of optional insurance. You can buy extra insurance to pay for risks not covered in your basic policy. Called a rider or an endorsement, you may pay extra for this.
You might want to consider it if you’d need additional coverage for such things as renting a car, repairing a rental car, emergency roadside assistance, collision forgiveness (this keeps your premium from increasing for your first at-fault accident) and a waiver of depreciation to ensure you receive the full value of what you paid for your vehicle.