Questions for your insurance representative about car insurance

To get off to a good start, here are a few basic questions you can put to your insurance broker before you buy car insurance. Please note that these questions are of a general nature and it is in your best interest to discuss the particulars of your insurance policy with your broker.

First: there are no stupid questions, and you should not be shy about asking any and all questions that occur to you.

A careful analysis of all these elements may save you a lot of money in insurance premiums.

Make sure you understand your insurance!

1. If I were to have a car accident tomorrow, what kinds of coverage would my car insurance provide?

In Canada, all vehicle owners must have basic car insurance. This is the law. This insurance, which varies from one province to another, always provides the following coverage:

  • a) Civil liability coverage (if you injure someone or cause damage to a third-party’s property with your car and are sued as a result);
  • b) Accident compensation coverage (covers your medical expenses and provides you with a temporary income – under certain conditions – if you are injured in an accident. In Quebec, compensation for physical injuries is paid out by the SAAQ).

Find out about the other types of benefits the basic compulsory insurance in your province may provide. You should also inquire about coverage amounts. Indicate what you use your car for. Other questions:

  • Do you carpool?
  • Do you drive groups of children to hockey games?
  • Do you drive in the United States a lot?

Make sure that your current civil liability protection corresponds with what you use your car for. Find out about any optional coverage your contract may provide.

2. What kinds of optional coverage are provided and which do I have?

Insurance which covers damage to your vehicle is optional (except in Manitoba and in Saskatchewan, where ” all-risk insurance ” is compulsory). The most common types of optional coverage are:

  • a) Collision coverage (who is responsible for paying for the repair or replacement of your car if it is damaged);
  • b) No collision or upset or multiple risk accident coverage (who is responsible for paying for the repair or replacement of your car if it is not damaged in either a collision or upset).

There are other types of optional coverage such as, for example, loss of use of vehicle, which covers the costs of renting a car while your car is being repaired. Find out more from your broker about the full range of coverage offered.

3. Do I need collision insurance? What if I own an old car that isn’t worth very much?

Collision coverage is optional in every province except Manitoba and Saskatchewan. If you own an old car, you may want to dispense with Collision coverage, especially if your car would cost more to repair than it’s worth, even for minor repairs. You should also figure out if you could absorb the cost of losing your car altogether.

4. Who is covered under my car insurance?

To avoid having your policy cancelled, the names of everyone with a driver’s licence living in your home, as well as the actual main driver must appear on your contract. Anyone with a driver’s licence who drives your car with your permission is covered. Remember, your insurance covers your car, so if you lend someone your car, you’re also lending him or her your car insurance. Don’t lend your car to anyone: if the person using your car causes an accident, this accident will be logged in your file, and your premium (what you pay for insurance) may go up.

5. How much is my deductible? What do you recommend?

Collision and Accident without collision or upset coverage include deductibles (i.e., the share of the damage for which you must pay). Find out how little or how much a higher or lower deductible amount will affect your premium. Don’t opt for a deductible that you won’t be able to pay out of your own pocket if you have an accident.

6. I used to drive more than 50 km a day to go to work but now, I care of my kids at home and I only use my car to run errands. Does the number of kilometres I drive have an effect on my car insurance?

Yes, the number of kilometres affects your insurance premium. Find out from your broker if the rate you are being charged corresponds to the number of kilometres you are driving. You may be paying too much or, worse, you may be under insured.

7. If I buy a new car, does the type of vehicle I choose affect the price of my insurance premiums?

Presuming that you have optional Collision and Accident without collision or upset coverage, the answer is yes. Insurers rate vehicles based on their accident rates and the cost of repairing or replacing a vehicle.

The CLEAR system (Canadian Loss Experience Automobile Rating) benefits motorists whose vehicles are less often involved in accidents and whose vehicles are not as badly damaged, with lower premiums. For example, some vehicles are more likely to be stolen than others, some are better designed and, therefore, less likely to be damaged, some cost more to repair, some protect their occupants better, etc.

For more information about car rating, contact the Vehicle Information Centre of Canada (VICC) at (1) 416-445-1883 and ask about the pamphlets titled Choosing your Vehicle, How Cars Measure Up, and Car Theft. You can also obtain these pamphlets on the VICC Internet site or by contacting us.

8. Will I have to take out a different type of insurance depending on whether I buy a new or a used car?

There is optional coverage intended for new cars called waiver of depreciation. As soon as a new car leaves a dealership, it starts to lose value. You can, however, buy insurance which will cover claims during a certain period, as though the car was brand new. This coverage is particularly handy when a nearly new car is stolen or seriously damaged. In Quebec, this type of coverage is called Modification to compensation.

9. I travel a lot and I rent cars all over the world. Do I have to buy the insurance provided by car rental companies?

If you often rent cars in Canada or in the United States, it may be in your best interest to buy additional coverage which will provide you, your spouse and any other designated driver, with civil liability insurance. If your policy does not include this rider or if you rent a car somewhere other than in Canada or the United States, such as in Europe, for example, you must buy the insurance provided by the car rental company. Contact your insurance broker for more information.

10. Which insurance companies have you contacted on my behalf?

Insurers differ from one another in their structure, size, approach and type of client they target. Some insurers specialize in certain types of insurance, while others don’t; some offer higher quality service than their competitors. Each insurer is unique and, therefore, their rates can vary. Shopping around is a good idea, but you should also compare the kinds of service being offered. Ask your broker about the various options he has looked into for you.

11. How can I lower my premiums?

The cost of car insurance premiums is based upon the likelihood that you will be involved in an accident or that your car will be stolen. Here are a few relevant questions:

  • What kind of car do you own?
  • Have you been issued speeding tickets?
  • Do you have a good driving record?
  • Do you use your car to drive to work or just for outings?
  • Where do you use your car and how many kilometres do you generally drive?
  • Are you the only person driving your car?

Note: the best way to lower your premiums is to drive carefully!

What’s more, some insurers offer discounts to:

  • Older insured persons
  • People who have more than one vehicle
  • People who have not made any claims for a while
  • New drivers who have taken an accredited driving course

Remember to ask about any discounts to which you may be entitled!

For more information about car insurance in your region, contact us, ask the Insurance Bureau of Canada (IBC) for the pamphlet titled Automobile Insurance in Canada, or visit the IBC Website.

The Insurance Bureau of Canada represents private insurance companies which insure your car, your home and your business. For more information about these questions or for questions about any type of insurance other than life insurance, contact your local IBC office.

Please note that this is our translation of a text produced originally in French by IBC and called .”Assurance automobile: questions à poser à votre représentant d’assurance”.