Car insurance and law in Canada
The law is clear. Every Canadian car owner must have auto insurance in order to drive their car. It is mandatory in all regions and provinces. If you are caught driving without insurance, your license may be revoked, your vehicle may be confiscated and you may face a hefty fine.
In Ontario, for example, fines range from $5,000 to $25,000 for a first offense. You must also pay an additional 25% penalty (for example, an additional $2,500 if you receive a $10,000 fine). Repeated violations may result in a fine of up to $50,000.
Even if you get lucky and get away with a small fine, your future rewards will increase exponentially.
Each county has its own rules and regulations regarding compulsory coverage, but there are some commonalities. All Canadian auto insurance policies must include the following:
- Third Party Liability (TPL) – If you are liable for an accident that causes someone to be injured, killed, or their property damaged, TPL will help you cover the legal costs against you up to the amount covered. The minimum coverage required is $200,000, but most drivers opt for at least $1 million. In Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island, the NPT includes a component called Direct Compensation for Damage to Property (DCPD). If you’re in an accident through no fault of your own, DCPD coverage means your insurance company will pay for the repairs without having to ask the other driver to pay you back.
- Uninsured Driver – Financial protection in the event of death or injury caused by an uninsured driver or as a result of an accident by another person. It also covers damage caused to your vehicle by an uninsured driver. Insurance for uninsured drivers is mandatory throughout Canada.
- Accident Benefits (AB) – This coverage is required everywhere except Newfoundland and Labrador. If you are injured in an accident, this coverage will pay you income compensation, medical care, and even funeral expenses if you are injured, no matter who is at fault.
Although Third Party Liability, Uninsured Driver and Accident insurance is mandatory nationwide, there are a few additional insurances you can add to your policy to increase your coverage for an additional fee.
The most common additional coverages are accident and comprehensive insurance. This is actually mandatory in Saskatchewan and Manitoba and is usually required by a lender (such as a bank) if you have taken out a loan to pay for your car in another province.
Collision insurance. This insurance covers repairs if you hit another vehicle or object, even if it’s your fault or someone else driving your car. If your vehicle is damaged beyond repair, the collision damage liability exemption will help you pay for a replacement.
- Comprehensive Coverage – Covers the costs of repairing damage caused by vandalism, theft, fire, natural disasters, and other hazards, even when the vehicle is parked and unattended.
- Specific Risk Coverage: Financial protection for you against the specific risks listed on your policy (such as fires and earthquakes).
- All risk coverage is the broadest coverage available. Includes both collision and full coverage.
You can add claims to your policy to increase your coverage. Some of the more common recommendations are listed below:
- Loss of Vehicle Use – Covers transportation costs if you are involved in an accident and your vehicle is temporarily unavailable for repair.
- Damage to Vehicles You Don’t Own – Covers you if you damage your rental car.
- Depreciation – recommended if you have a new car. This ensures that you receive the full value of your vehicle after it has been written off.
- Family Protection – takes effect if you are involved in an accident with a driver who does not have insurance or coverage that is lower than yours and insufficient to meet your claim.
- Accident pardon – This is an approval offered by some insurance companies. If you buy it, they won’t count your first crash.
What coverage is needed?
In addition to deciding what coverage to include on your policy, you also need to decide what coverage you need. Each province has a minimum required amount, but it is not always sufficient. When determining how much you need, consider the value of your car and the financial impact of a serious accident.
With a large number of auto insurance coverage options available, it’s important to do your homework before purchasing a new policy to make sure you have the right types and coverage limits. We encourage you to shop around and use our free auto insurance comparison service to get multiple offers tailored to your needs.
auto insurance claims
Nobody wants to be in a difficult situation, but unexpected situations happen and it’s good to know what to expect.
What do you do after a car accident
If you are involved in a traffic accident and someone is injured or property is damaged outside of the county, you must notify the police. Police access to the scene of major incidents involving death, criminal activity, or damage to public property. For less serious crashes and as long as your car is safe to drive, some cities have collision centers where an officer can check your car for damage within 24 hours.
Immediately after an accident, it is important to observe the following rules:
- Stay on stage.
- If it is safe to do so, take the vehicle out of service to avoid injury or other damage.
- Write down the location, time of day, weather conditions, visible damage, and any other details you think are relevant to the incident.
- Gather information about the other driver, including their name, address, license number, insurance company name, and policy number.
- Get the contact information of the witness and the name and badge number of the police officer who witnessed the incident.
- Take pictures of the damage to your car and everyone involved in the accident.
- Take pictures of your surroundings and note the property damage caused by the accident.
- Report to the police.
- Report the accident to your authorized auto insurance agent.
We recommend that you report the accident to your insurance company as soon as possible, regardless of who you think is at fault. The insurance company will appoint a person who will deal with your insured event.
What to do if your car is damaged?
If your vehicle is damaged, the type of compensation you receive will depend on your liability and the type of coverage you have.
when it’s wrong
- Whether you are guilty or not depends on the assessment made by the insurance company. The conclusions are based on a set of defect identification rules covering dozens of incident types. You can find 0% to 100% fakes; Anything above 25% will likely raise your interest rate.
- Insurance companies take the blame without the involvement of the police. You may not be breaking any laws, but you can still be guilty of an accident. Similarly, a fine issued by the police does not always mean that the insurance company is at fault.
- If you have accident insurance and you are involved in an accident in which you were convicted, you will be covered up to the policy limit minus the deductible. If you do not have accident coverage, the insurance company will not cover the cost of repairs.
Everything works differently when it turns out that you are not mistaken. If you have Outright Indemnity – Damage Damage coverage (mandatory in Ontario), you will be covered up to the no-fault percentage of your policy limit, even if you do not have collision coverage.
If you are involved in an accident with an uninsured motorist, you can file a claim for damages to your vehicle under the Uninsured Drivers section of your insurance if the person can be identified.
If your car is damaged, the insurance company will decide whether to cover the cost of the repair, or if the damage is so severe, they will cancel it right away. In the event of a cancellation, you will receive the cash value of your vehicle at the time of the accident.
Your insurance company will provide you with a list of preferred body shops for repairs. You can choose what suits you best, but if there are problems with the repair, you will have to fix them yourself. Do not make any repairs until the insurance company has reviewed your claim and authorized the work.
What do you do if you are in pain?
If you are injured in a traffic accident, you may be entitled to personal injury compensation regardless of who was at fault. Keep all medical records, prescriptions, and other supporting documents. Your insurance company will tell you what else you need to settle your claim.
Claims not related to the accident
If your car is damaged in the absence of an accident (such as vandalism), your compensation will depend on your insurance coverage. If you have full coverage for all perils or specific risks, you will be covered up to the limits of the policy, minus the deductible. This also applies if the vehicle is stolen but the items inside the vehicle are not always protected.
When can a complaint be dismissed?
It is important to note that no matter how much insurance coverage you have, the insurance company will most likely reject your claim if it involves criminal conduct, including the following circumstances:
- Accidents caused by drug or alcohol use.
- Incidents that led to a criminal conviction (eg hit and run or negligence).
Contrary to popular belief, your premium will not increase if you apply. However, if an error is discovered during the application process, premiums may increase. Too many claims can cause the insurance company to overcharge your deductible or, in extreme cases, cut your coverage.