- Canada, the second largest country in the world, has three main types of car insurance.canada image by NataV from Fotolia.com
The last thing you want to do is crash your car and hurt yourself, or anyone else. However, in the event that this does happen, the ensuing expenses can be well beyond the average person's financial capabilities. Due to this reality the Canadian government requires every driver in every province and territory to carry a minimum amount of insurance. This mandatory insurance takes different forms in each province, with other, optional insurance available for purchase. - Each provincial government decides the parameters of the mandatory insurance requirements. For example, each province has a minimum third-party liability and medical payments, as well as extra expenses that also vary such as death benefits and funeral expenses. In 2010, the minimum amount for medical expenses ranges from a low of $25,000 in Nova Scotia to a vague "unlimited" amount in Alberta. In the same year, most provinces have this payout capped at $150,000, with the range of third-party liability ranging from $50,000 in Quebec to $500,000 in Nova Scotia. Providers of the mandatory insurance also vary from province to province. Four provinces have government agencies that are responsible for the mandatory coverage--British Columbia, Saskatchewan, Quebec and Manitoba--and drivers must buy their insurance through these agencies. This difference in policies and lack of choice for drivers has been the cause of much controversy for many years. All other provinces have an open market, which offers scores of providers for drivers to choose from.
- Collision insurance is an optional addition to the mandatory minimum insurance required in Canada. As the name indicates, this insures your car against collision with another vehicle, or object. The price of collision insurance depends on specific factors, including your age, province, type of car and driving record. Since this kind of insurance will potentially pay for damages to your car in the case of a collision, the year, make and specs of your car influence the price exponentially. The more expensive your car, or accurately, the more expensive the parts or repairs are known to be, the more you will pay for this type of insurance. Likewise, if you have a long history of repeated accidents that include collision, you will be considered high risk and your personal quotation will be high. An individual with no accidents on his record will pay less.
- In Canada, comprehensive insurance covers a range of possible outcomes for accidents and your car. Most significantly, comprehensive insurance usually incorporates what is sometimes sold as a separate insurance, namely, fire and theft. Thus, in the case of a fire that damages your car, or loss from theft, your car is covered and, depending on the exact parameters of the policy, you can replace your car. In addition, comprehensive insurance can include coverage of natural disasters such as earthquakes and floods. This type of insurance could be called the "full service" insurance as your car is often insured against total loss, in a variety of situations that range from collision to vandalism. Often special services will be included, such as tow trucks, road rescue, tire change, rental cars and more. Once again, the price to the consumer depends entirely on the car and the driving record of the individual operating it.
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