Car insurance is something we legally have to have on every vehilce, pay for monthly and it covers us everyday. But, when was the last time you checked to see what you had on your car insurance policy? Here at Cassidy & Young, we believe that understanding the nuances of car insurance is crucial for making informed decisions. We always advise full coverage but understand that certain circumstances dictate that you may require something other than that recommendation.
Here are the definitions of the most common coverages you will see on an auto policy.
Mandatory Coverage
- Liability – covers you for things like legal fees and cost of settling a claim if you cause an accident with your vehicle
- Direct Compensation – covers you if your vehicle and contents are damaged in an accident that is the fault of another driver
- Accident Benefits* – covers you if you are injured in a car accident (income replacement, medical, rehabilitation, funeral, etc.), certain exclusions may apply
- Uninsured Motorist – covers you for damage and injuries if you are in an accident with an uninsured or hit-and-run driver who is at fault
Optional Coverage
- Collision – covers you for the cost of repairs/replacement of your vehicle if you are in an accident that is at fault
- Comprehensive – covers you for fire, theft, lightning, vandalism, and flying objects like stone chips or glass repair
- All Perils – collision + comprehensive + covers you for theft by a person who lives in your household or an employee
- OPCF 20 Loss of Use – covers you a rental vehicle, public transit, etc. if your vehicle is stolen, damage or destroyed
- OPCF 27 Liability for Damage – covers you for damage to a car you don’t own while it was in your care and control, such as a friend’s vehicle or rental car
- OPCF 43 Limited Waiver – covers you for the loss of value or depreciation of a new car if it is damaged beyond repair, certain conditions apply
- OPCF 44 Family Protection – covers you for the difference between the at fault driver’s liability limit and your own liability limit if someone with less liability coverage than you injures you in an accident
- Accident Waiver – coverage that forgives your first at fault accident and will not affect your rate, certain conditions apply
For some of the optional coverage a deductible may apply.
A deductible is the amount of risk you would assume as the insured. For example, in the event of a collision that is your fault the insurer will pay out the amount of the collision less the deductible you have chosen. The most common choices are $300, $500 and $1000. The higher the deductible, the lower the rate and vice-versa.
Accident Benefits
The bottom line is that in the unlikely event you have an injury as a result of an automobile accident and need medical attention, accident benefits coverage is here to help.
It’s true that Accident Benefit coverage (sometimes called AB coverage) is mandatory. That being said, you have options! The “standard” amount of money available for these expenses is determined by the severity of your injury. There are 3 injury classifications: minor, catastrophic, non-catastrophic. Each of these severities come with their own limits on insurance.
We always recommend increasing your coverage to the maximum available – $3,000,000 for catastrophic and $1,000,000 for non-catastrophic (minor cannot be increased).
We hope no one needs these higher limits but the reality is that, likely today, someone in Ontario will be badly hurt in an automobile accident. At Cassidy & Young, we will always encourage you to explore all the coverage options available.
That is a quick summary to better understand the coverages on your policy! For more detailed information please visit our page on car insurance and as always, if you have more questions please contact us!
