Overview

The basic car insurance may cover the driver, all passengers, and other people who may suffer injuries in the accident. In some provinces, injured people with insurance coverage should first claim under their policy. There are three types of drivers from an insurance point of view:

• Principal driver – One who drives the car most of the times
• Additional driver – Listing of Additional Drivers is necessary if other individuals in your family drive the car routinely for work or school. Their driving record will increase the car insurance premium
• Occasional drivers – If someone uses your car from time to time

The Car insurance in Canada aims to protect you from the following:

• Cost of repairing your car and other vehicles in case of an accident
• The cost of liability claims arising out of injuries to other people or damages to other vehicles if you are held responsible for the accident

Policy coverage

You may consider the following types of coverage while shopping for car insurance:

• Liability coverage – This type of coverage is mandatory across Canada. It ensures protection if you are liable for the injury or death of people or damages to the property. Liability insurance will also protect you from medical expenses or loss of income because of the accident as accident benefits.
• Collision coverage – It will cover damages to the car in the event of a collision with some object or vehicle, even if it is your fault.
• Comprehensive coverage – It covers all types of events that may result in damaging your vehicles like fire, floods, theft, vandalism.

Some optional insurance coverage types may be available as per your driving record. These aim to cover risks not covered by your basic car insurance policy. You will be paying an additional premium for these riders.

• Cost of repairing damages to a rental car
• Cost of car rental or alternative transport if your car is under repairs
• Collision forgiveness prevents the premium from increasing following your first car accident
• Road-side assistance in case of emergency
• Depreciation assures reimbursement of the total value of the car

Factors that may affect car insurance premiums

Several factors will determine the amount of car insurance premium. Apart from your age and the number of years of driving experience, the car insurance provider will check your driving record for a history of accidents or traffic violations. Having a clean driving history will qualify you for lower premiums.
The car insurance provider will also consider the amount of time you drive the car as a long time behind the wheel will attract a higher premium. Similarly, the type of car is another deciding factor as newer cars will have higher premiums than older ones. A car with high safety ratings will also lower your car insurance premium ratings. Car insurance premiums may vary between two insurance providers.
Get in-depth information on risk coverage available under the policy before purchasing particular car insurance. Car insurance policies do not cover theft of personal possessions from the car. Several insurance providers offer discounts to clients for combining home and car insurance. Discuss with your broker about the insurance ratings as cars with higher insurance ratings attract lower premiums. This information will be helpful while shopping for your car.