The 4 Most Common Car Insurance Questions

As anyone who has sat behind a steering wheel knows, driving comes with a number of inherent risks, the most serious being the possibility of getting into a collision. And while you might be unable to prevent a crash from occurring, having proper car insurance can help mitigate the overall cost of such an unfortunate scenario.

Still, understanding all the nuances of auto insurance can be complex. With that in mind, here’s a breakdown of the basics that will help answer some of the most common car insurance-related questions.

1. Is Car Insurance Mandatory in Canada?

The short answer is “yes.” Like most developed nations, Canada requires all drivers to have up-to-date auto insurance to operate a vehicle anywhere within its borders. However, depending on which province you reside in, where you purchase insurance will differ. You’ll ether find your policy through private insurers, government-owned corporations or some combination of both.

2. What’s Considered Comprehensive Car Insurance Coverage?

All Canadian motorists are required to have a standard auto policy that includes third-party liability coverage. Liability insurance covers any injury or loss of life that you’re responsible for in the event of an accident. This includes payouts for lawsuits and potential property damage. An average amount of liability coverage for a single driver is between $200,000 to $1 million.

Accident benefits are also a required component of auto insurance coverage in Canada, except for Newfoundland and Labrador. These benefits cover an insured motorist’s medical expenses and loss of income if they are injured in a collision.

Keep in mind, however, you can always add additional coverage and benefits to your policy by including items such as:

· Collision insurance
· Vandalism and theft protection
· Windshield repair and replacement
· Rental car allowance
· Emergency roadside assistance
· A depreciation waiver

Be sure to talk with your insurance provider if you have a question on what your policy covers or common risks you might need additional coverage for.

3. How Much is Car Insurance Per Month?

This depends largely on the province or territory in which you reside. Whether you’re trying to find the cheapest rates or adjust for the cost of living, your best bet is to get specific with your location. For example, let’s say you’re planning a move to central Canada.

When speaking with an agent, one question you should be sure to ask should go something like, “On average, how much is car insurance in Ontario per month?” The more complete information you provide, the more accurate your quote will be.

For each Canadian province or territory, motorists can expect to pay an average car insurance premium of:

· British Columbia: $1,680
· Ontario: $1,445
· Alberta: $1,251
· Newfoundland & Labrador: $1,132
· Manitoba: $1,080
· Northwest Territories: $978
· Nunavut: $963
· Saskatchewan: $936
· Nova Scotia: $842
· New Brunswick: $819
· Yukon: $812
· Prince Edward Island: $796

4. How Do Auto Insurance Companies Calculate Their Rates?

Auto insurance companies use a combination of factors to calculate your insurance premium, including your driving history, the number of years you’ve been driving and where you live. Your gender and the type of vehicle you drive can also be factors in the cost of your premium.

Know the Ins and Outs of Auto Coverage

Understanding the ins and outs of car insurance coverage is important. Much like home and business insurance, auto insurance guards against large amounts of financial loss. So, whether you’re buying insurance for the first time or shopping around for cheaper coverage, understanding the basics can help you pick the best policy for your specific needs.

Thanks to Ana

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