Reasons you need auto insurance

Reasons you need auto insurance

You must have auto insurance if you have an auto or other vehicle.

Auto insurance can protect you against:

the obligation to pay for repairs to your car or other vehicle in the event of damage or accident
liability settlement if you are held responsible for an accident that caused damage to another person's vehicle or injured others
Insurance companies may also call auto insurance property and casualty insurance. P&C insurance also includes home insurance, business insurance and catastrophe insurance.

Recall
If you decide to lend your car to someone whose name does not appear on the insurance policy and that person has an accident, your own insurance record may be altered and your premiums may increase.
Who is covered by auto insurance
If you have a car accident, your insurance may cover:

the chauffeur
all passengers
other people involved
In some provinces, injured passengers or others involved in the crash who have their own insurance policies must make a claim under their own policy first.

The main driver is the person who drives the car the most.

Additional drivers are other drivers in the household who can use the car for their normal activities, such as going to school or to work. Your insurance policy should include a list of these additional drivers. If some of the additional drivers have a bad driving record, your premiums may increase.

Occasional drivers are those who only use the car occasionally.

What auto insurance covers
Protection is the maximum amount of money the insurance company will pay you if you make a claim for a loss or event covered by your policy.

Mandatory insurance
Canadian provinces and territories require drivers to have mandatory coverage. Some provinces may require more protection than others.

Liability insurance

Liability insurance covers loss, such as injury or death, that your vehicle has caused. If the costs of the loss or damage exceed the limit of your liability, you must pay the difference yourself.

Liability insurance does not cover the cost of repairs to your own vehicle. You should consider getting additional insurance to cover these costs.

Accident / injury compensation

Accident Benefits cover the costs of your own medical expenses and lost income if you are in an auto accident.

In Quebec, you are automatically registered for insurance that covers injuries. Premiums are paid upon registration of your driver's license. You don't have to buy more insurance.

Additional insurance protection
Your auto insurance can offer you other benefits as well.

Collision insurance

Collision insurance covers the cost of repairing or replacing your car if you are hit by another car or object. This is sometimes included in your mandatory insurance coverage.

Ask your insurance company for the protection included in your policy.

Multi-risk insurance

P&C insurance covers the cost of repairing your car or replacing it for other types of damage or loss. This may include:

vandalism
damage to your windshield
the flight
Property and casualty insurance does not cover damage or loss if you hit another car or object in a collision.

Ask your insurance company for the protection included in your policy.

Optional insurance protection
Depending on your driving record, you may not be eligible for all types of optional insurance.

You can buy more insurance to pay for risks that aren't covered in your base policy. Insurance companies call this insurance a rider.

You may also need additional insurance for:

renting a car or using another mode of transportation while your car is being repaired
repair of physical damage to the rental car
help on the road in an emergency
an accident amnesty, which prevents your premiums from increasing after a first accident for which you are responsible
depreciation to ensure you receive the full amount you paid for the car
Ask your insurance company what is covered, and what is not, under your policy. Learn about the risks for which you need additional protection.