What Type of Auto Insurance Is Required By Law in Canada?

Auto insurance is really important to have for any auto owner. According to Canadian law, it is legally required to have auto insurance if you want to drive on the road. If a driver fails to show his or her insurance papers, they will end up with fines and license suspensions. Also, vehicles can get impounded.

We know that it is kind of mandatory to have auto insurance for every driver in Canada. But there are various types of auto insurance out there. Do you need all of them or just specifically one or two? So in this writing, we are going to discuss what types of auto insurance are required by law in Canada. Keep reading this article!

Mandatory types of auto insurance:

Some types of auto insurance are mandatory and essential, according to Canadian law. These auto insurance will make up the basis of the auto insurance policy of Canada. So these mandatory types of auto insurance include;

Insurance of third party liabilities:

This type of insurance is essential for Canadian drivers. This will cover up the financial loss. If you, unfortunately, injure someone or damage another’s property or asset, and then this insurance will cover the loss. In most of the Canadian provinces, the liability coverage is more or less 150,000 CAD.

But only in Quebec, the amount is quite less, which is around 50000 CAD. When you are involved in such an accident, then the victim usually raises their claim for 1 million or 2 million CAD. If you don’t have this third party liability insurance, it would be hard for you to pay the full money.

Accident benefits:

This is another essential type of insurance in Canada. If you have any auto accident injuries, then this insurance will cover up all the hospital costs and medical bills. If you ever need any help like physiotherapy and dental care, it will also cover up the cost for these. So Canadian law makes it mandatory for all drivers of Canada.

Uninsured motorist:

Uninsured motorist covers up the vehicle damages from an auto accident. It also covers the medical bills and hospital costs resulting from an accident. The victim without insurance can be you or anyone from your family. This insurance is mandatory almost in all provinces in Canada except in Alberta.

Optional types of auto insurance:

Some kinds of auto insurance are not mandatory but optional. It depends on the car driver or the owner. It is better to have such insurance, but it will not create any problems if you do not have such insurance. Some optional auto insurance is given in the following:

Collision accident insurance:

When you are involved in an accident and are on the fault side or partially involved, this insurance will cover the damages. It will pay up for the repair costs of your damaged car and sometimes will replace your car. It is optional auto insurance, but if you’re a new driver, it is always better to have this insurance.

If you do not have that financial condition to repair your car and cover all damages bills, you will definitely need this insurance. This insurance requires you to pay a deductible when you buy this insurance. Then if something goes wrong, the insurance company will pay the rest.

Comprehensive Insurance:

This insurance will protect your car when it is unused. When your car will get stolen or when a tree will fall on top of it. This insurance will make sure the repair costs. However, it is optional if you are a new driver and cannot always afford the repair bills. Then you should go for this insurance.

This type of insurance also requires a deductible. When you sign the insurance agreement, you need to pay that deductible. It will depend on you. You can pay less amount as your deductible, and also you can pay more amount as your deductible. But remember, it is recommended to pay more like a deductible because the insurance policy will pay you more if you do so.

Benefits coverage by the auto insurance company:

There are plenty of advantages or benefits of having auto insurance. This will provide you supplementary care. Sometimes, accidents happen, and the consequences become very bad. That is why it is mandatory to have certain insurance. The benefits coverage by auto insurance include:

  • Hospital bill/costs resulting from an auto accident
  • Compensation of the lost wages and incomes
  • Rehabilitation
  • Attendant care and many more.

Things that require auto insurance:

If you want to sign for auto insurance, then you need to go through some process. And you will need some document that is required for auto insurance. Those things include the following:

  • your driving license
  • If you have any insurance, then-current insurance company name and documents
  • if you have earned any points from the learner’s permit, then previous tickets.
  • Also, if the previous claim if you have any form learner’s permit
  • All necessary information about your vehicle.

The Bottom Line:

Whether it is mandatory insurance or voluntary, car insurance will always be like a protection for your vehicle. When you sign an insurance agreement, there will be some optional features. Sometimes the insurance company will try to trick you with their business policy.

So always try to consult a professional, skilled someone (i.e.,auto insurance Kelowna) before signing all the important agreements. Whether it’s an important optional feature or not, you need to know if it’s right for you or not. Hopefully, from this writing, now you know the types of auto insurance required by law in Canada.