Safe Driving: The Different Types of Auto Insurance

Safe Driving: The Different Types of Auto Insurance

Before financing a new or used vehicle, you must consider a few other expenses month-to-month. For drivers in Canada, it is mandatory to purchase auto insurance. Depending on your driving history, age, and vehicle, alongside numerous other variables, this may prove to be a heavy cost to bear. When on the market for insurance, survey the different companies for competitive rates and deals. To do so effectively, you will also need to know the various types of auto insurance policies available.

Liability Insurance

In Canada, liability insurance is compulsory for vehicle owners. Essentially, this protects drivers from the destruction of another person’s property as a result of their driving. Damages may include injury or death, which is why coverage extends to medical bills and lost wages. Accidents benefits may be claimed regardless of fault.

Comprehensive Insurance

For events not related to a driver’s ability to operate a vehicle (i.e. theft or vandalism), this type of auto insurance covers repairs. Environmental damages may also be included in comprehensive insurance coverage, just as unanticipated or unavoidable circumstances, such as flying objects on the roadway, are often fully or partially taken care of.

Direct Compensation

In Ontario, Nova Scotia, and New Brunswick, drivers have the option to cover damages caused by another driver. Such a policy relies on insurer compensation, rather than funds collected from the driver at fault. Often, this type of insurance requires a deductible.

Collision Coverage

Relating directly to accidents and collisions, this insurance protects against damages as a result of another vehicle. Policy rates vary; however, this is often considered the most expensive policy.

Pay-as-you-Drive

Although not yet available in Canada, this is a form of insurance to watch out for in coming years. Essentially, pay-as-you-drive insurance measures several factors (i.e. mileage and frequency) to determine a consistent rate. Each time the driver takes the vehicle out, he or she is charged based on the distance traveled.

Uninsured Automobile Coverage

This form of insurance protects drivers from collisions with other uninsured drivers, covering any of the resulting damages or injuries.