Four Tips for Choosing the Right Auto Insurance Coverage

Couple speaking with their Insurance agent

In a previous article we discussed the basics of auto insurance, learning what it is and the different types of coverage options or enhancements.

Auto insurance helps to protect you if you are in an accident and you are held liable for the injury to or death of other people. It can also provide added coverage in the event of an unexpected incident. Here are a few more elements to consider when purchasing insurance for your vehicle.

Do I Need Insurance if I Have a Learner’s Permit?

While many provinces have different names for the various driving classes needed to operate a vehicle, the short answer is yes.

Owning auto insurance is not exclusive to ownership of a vehicle. There are situations in which you may not own a car (i.e., a teen driving their parents’ car) but if you regularly drive a car that belongs to a relative or friend, it is your responsibility to ensure that you’re listed on their car insurance coverage. Consider asking to be listed as an occasional driver as the coverage cost may be significantly lower, but you’ll also need to understand any parameters or limitations within the policy.

Who Can Drive my Car Under my Insurance?

If you are the primary driver of your vehicle, it is your responsibility to disclose any licensed people that will have regular or occasional access to your car. If someone is only taking your car for a short period of time in a unique situation, they may not need to be added as an operator.

Remember, if you lend your car, you lend your insurance. Meaning, you’re able to lend your car to anyone you choose but ultimately, they are driving around with your insurance and their actions can impact your policy if something happens.

What Should I Set for my Auto Insurance Deductible?

Your deductible is the portion of the claim you pay. For example, if you have an accident which causes $2,000 in damage to your car and you have a $500 deductible, you will pay the first $500 and your insurance company would pay the remaining $1,500. Many auto insurance companies have various options for the deductible. While it might be tempting to pay a smaller amount in your deductible, this will reflect how much your insurance costs. The less you pay in your deductible, the more you pay for insurance premiums (and vice versa).

How Much Third-Party Liability Protection do I Need?

To answer that question, let’s first define what third-party liability protection is. This form of protection is a mandatory coverage for auto insurance policies and protects you if you are in a collision and you are held liable for the injury to, or death of, other people. It also covers damage to their vehicle. There may be a minimum amount of third-party liability coverage required by your province, but speak with your insurance provider to understand what that means.

This article only provides you with a basic understanding of what a new driver needs to know about auto insurance. Should you have any additional questions about the parameters of each of the topics, be sure to speak with your local agent.

This information has been provided for your convenience only and should not be construed as providing legal or insurance advice.