How Much Automobile Insurance Coverage Is Enough?

March 8, 2017 · Posted in General Articles on Car Insurance 

Car insurance is a Canadian driving requirement, although minimum coverage specifications vary by province. These requirements don’t suggest fitting coverage amounts for shoppers. Everyone’s insurance needs are unique to their own situation. Mandatory minimums don’t address real-life requirements, rather they encourage minimalist protection. This establishes an environment where the probability of financial loss is heightened for every driver.

What variety of insurance coverage should you have? How much is enough? Read on and we’ll take a closer look. Discover the integral issues that effect liability. The medical benefits, the effects of uninsured autos, and the other pieces that comprise a vanilla automobile insurance policy. Although I can’t personally advocate the right amount of coverage for you, I plan to give you a better understanding of what to be aware of. You’ll learn key items to be aware of in preventing yourself from unnecessary financial losses.

3rd Party Liability Third party liability coverage is in included in every Canadian car insurance policy. This is your financial protection should your actions be deemed accountable for damaging someone else or their property. You are covered up to your maximum should a lawsuit find you financially responsible for your actions. Most provinces require a minimum of two-hundred thousand dollars worth of third party liability coverage, but mileage may vary.

Statutory Accident Benefits Any expenses from injuries you sustain from a traffic accident fall under this portion of your insurance policy. This is regardless who is found to be at fault for the accident. The cause of the accident is irrelevant, and this benefit covers things like rehabilitation and medical expenses. It also covers reimbursement for wage losses, and caregiver expenses. Minimum requirements vary by province. In Ontario the minimum requirement is $100,000 outside of “catastrophic” injuries.

Coverage from Uninsured Vehicles Although every Province and Territory has compulsory auto insurance; many motorists on the road don’t have insurance coverage. In order to safeguard drivers, insurers have added an ‘uninsured’ feature to their policies. This provision provides benefits to you and your family should someone without insurance get in an altercation with you involving damages. These benefits are also used if you’re involved in a hit and run accident, and the offending driver successfully gets away.

DCPD (Direct Compensation Property Damage) Direct Compensation Property Damage is the coverage used to repair your vehicle in the event you are involved in an accident in which you are held not found responsible for some of the ‘fault’. Your collision insurance coverage covers your fault, and DCPD covers someone else’s fault.

Identifying The Amount Of Coverage To Get Thus far, we’ve discussed the basic components of a car insurance policy as mandated in most provinces (with the exception of Direct Compensation – Property Damage coverage). This discussion evaded the larger context of need. Millions of people are exposed to a financial loss because they are buying the minimum amount required by their province’s law. One court finding could potentially devastate these people financially.

Suppose you live in P.E.I. and decide to invest in the $200,000 minimum third-party liability requirement. As the result of unforeseen circumstances, you are found ‘at fault’ for an altercation that results in the paralysis of another driver. Suppose you are found accountable for $2,000,000 in damages. Your insurer is responsible for the first $200,000, so therefore you are left with a $1.8 Million dollar tab. This sequence of events would financially devastate the average consumer with the minimum required liability coverage.

In getting the minimum coverage requirement, millions of Canadian drivers are opening themselves up to some huge financial risks. We get into car accidents every day, and the cost of the average accident goes up every year with inflation. We need to be vigilant that we have necessary third party liability, accident compensation, and uninsured vehicle benefits. Otherwise we open ourselves up to unnecessary risk, and potentially disastrous repercussions.

The paradox is that most Canadians don’t bother to shop for lower auto insurance rates on a regular basis. Many Canadian drivers would find that some insurance brokers can provide better coverage (i.e. higher limits) for the same rates they are currently paying.

When you have a chance, consider your minimum car insurance coverage alongside what you presently pay. Have a look into what it would cost to raise your compensation to a level less risky. Online comparison engines can make quick work of this, and you can often get real-time updates as you tweak your coverage. Have a look at how much coverage you have right now, and think about what would be a comfortable risk level. Look into the cost difference as it’s usually a small adjustment in your premiums. Usually you can find better coverage for less than you’re paying. Take the time to review your auto insurance needs in light of your financial situation. Investigate how much it would cost to increase your coverage to an appropriate level. Then, compare auto insurance quotes online to find the most attractive package that accommodates your needs. You may be surprised by the deals you find online, and see who’s got the best package of cheap rates and high coverage.

Get car insurance quotes and compare the coverage of local brokers competing for your business. Find out who best represents your financial interests, and see whose rates shine through.

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