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Car Insurance 101: Understanding Basic Coverages

Last Updated: Feb 2021 | Categories: Car Insurance

Car accidents

For some mind-boggling reason, Canadians aren’t educated about car insurance in school or university. It’s not even a key topic in driver training classes! Considering the number of Canadians that drive, and the fact that it’s illegal to have your car on the road without insurance, this seems a bit crazy to us.

It leaves people unsure of what type of insurance they need or the best way to go about getting it when it’s time to buy their first policy.

That’s why we’re developing an Insurance 101 blog series – to help people understand car insurance and their unique insurance needs!

Our first topic: an overview of the three basic insurance coverages – liability, collision, and comprehensive.

1. Liability Coverage

Liability coverage (also known as “PLPD” which stands for “Personal Liability & Property Damage”) is the only coverage that is legally required in every province in Canada. It covers any damages you may cause to other people or their property when driving your vehicle. This includes damages to other people’s cars, homes, yards and belongings, as well as any medical bills that may result from an accident you’re considered “at fault” for.

2. Collision Coverage

This optional coverage pays for repairs to YOUR vehicle if you’re in an at-fault accident, including accidents with other vehicles or with stationary objects (you’d be surprised how often that happens!). If your car is written off in the accident, this coverage will kick in to replace it. Collision coverage can be expensive, so many people decide not to add it to their policy if their vehicle is old or would be relatively inexpensive to replace.

3. Comprehensive Coverage

Comprehensive coverage is also optional. It covers damages to your vehicle that are not caused by a collision. If you hit a deer or your car is broken into, vandalized, or damaged in a natural disaster like a hail or wind storm, your comprehensive coverage will pay for the repairs. If your vehicle is stolen, your comprehensive coverage will pay to replace it with one of similar value.

Looking for Advice About Which Coverage Is Right for You?

If you want to talk to an expert about the car insurance coverage that’s right for you, give the qualified team at Cheep Insurance a call! One of our brokers would be happy to have a chat and provide some advice about your unique situation.

Give us a shout at 1-866-92-CHEEP or (902) 463-1675. Our team is ready to assist you! Plus, we have the tools and knowledge to find you the best price available for your unique insurance needs.