Navigating the details of car insurance can feel overwhelming. To equip Canadians with helpful information, we’ve answered the top ten most commonly asked questions about car insurance. Read on to learn how your car insurance rates are determined, the differences between comprehensive and collision coverage, insurance for car rentals, and more.
Car insurance rates are determined by many factors, making it difficult to know for sure when your rates might go down. While in the past, reaching the age of 25 typically caused car insurance rates to go down, this is no longer guaranteed.
Some of the factors that might influence your car insurance rates include:
Rental coverage is not automatically built into your existing car insurance policy, but it can be added to your policy in the form of a simple, low-cost rider. Before you rent, be sure that your insurance covers the specific car you plan to rent, as some riders only cover vehicles up to a specific value and only up to a certain amount of time.
Alternatively, you can opt to use the rental company’s insurance, which can be added to your rental fee for a specified amount per day of the rental period.
Any time you rent a car, you should make sure that you have insurance coverage. If you drive a rental car without coverage, you will be liable for any damage to the vehicle incurred during the rental period.
The colour of your car does not affect your insurance rates. However, details such as the make, model, and year of your vehicle will influence your rates. An expensive sports car that happens to be red may draw higher insurance rates than a sedan, but this is due to the make and model of the car, not the colour.
As with any bill, paying your car insurance in full and on time can help build credit. Similarly, missing payments can harm your credit score. However, there is nothing specific to insurance payments that enhances your credit score.
To insure a car, you will need to provide your broker with the following information:
To determine exactly what your car insurance covers, review your policy declaration documents, which will define the specifics of your coverage.
Various coverage options are available for purchase. Below are several examples of what car insurance may cover, depending what options you choose.
If purchased, collision insurance includes coverage for situations when your car is involved in a collision with another object. Depending on the deductible chosen and the claim situation, collision insurance can provide coverage for major repairs to your vehicle damaged in the accident.
Under collision insurance, “objects” include:
Collision insurance would cover damage to your vehicle for which you are at fault or if your car is involved in a hit and run accident. Common loss incurred in a collision could include damage caused by hitting a parked car, pothole damage, and other major car repairs required after a collision. Note: This will be subject to a deductible.
Coverages under comprehensive insurance could include loss or damage caused by incidents such as:
Note: This will be subject to a deductible
Many factors, such as the age of your vehicle, the number of vehicles you own, and how you use your vehicle will influence the kind of coverage you need.
A car insurance deductible is the amount you pay out of pocket when you make a claim. For example, if you have a deductible of $1,000 and the repair costs are $3,000, you will pay $1,000 out of pocket and your insurance company would cover the remainder (or up to the coverage limit, depending on the value of your car).
In Ontario, under the terms of your policy, you must report any accident to your insurance carrier or broker if there is any injury or property damage, regardless of who is at fault. Reporting should take place within seven days.
How long an accident stays on your driving record will vary by insurance carrier.
Car accidents can affect your insurance rates, but each case is different.
If you are using your vehicle as part of your job (aside from driving to and from your workplace), you will require business use coverage on your personal car insurance policy. For example, a real estate agent using their car to show properties would require business use insurance. When you discuss how you’ll be using your vehicle with your broker, be as thorough as possible so that they can help determine whether you need business use coverage.
Other uses of your vehicle may require commercial auto insurance. Some examples of where you will need commercial car insurance are if you are using your vehicle for:
If you are unsure whether you need business use or commercial insurance for your car, talk to your broker, who can assess your unique circumstances and help you determine your coverage needs.
Our Cowan experts are always available to answer any questions you might have about your car insurance. While exploring the details of your policy may be challenging, our brokers are here to explain your coverage specifics every step of the way.