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Automobile insurance is necessary in order to drive in Canada. Every driver has it, but that doesn’t mean it isn’t confusing. When it comes to your car insurance, it’s important that you ask the right questions and do the proper research to get the best premium. This means knowing certain terms so that you get the best price possible. Before you meet with your agent or compare your car insurance rates through a site such as https://insurancehotline.com, make sure you know these five definitions.
1. Comprehensive Insurance
Comprehensive insurance encompasses damage done to your vehicle from non-accidents. Things like falling objects, vandalism, natural disasters, or theft are covered by this type of insurance. You’ll want to look carefully at this part of your policy because it’s possible that even if you have comprehensive insurance, it may exclude damage that you have accidentally done to your car.
For example, someone throwing a rock at your vehicle and cracking the windshield is covered under comprehensive insurance, but driving into a pole and damaging your vehicle may not be. Check with your provider to make sure that you are covered, especially if you live in a location where this kind of damage to your vehicle is more likely.
2. Claims Or Accident Forgiveness
Accident forgiveness stops your premium from going up after your first accident. This kind of addition to your policy could be a real money-saver, especially if you’re looking to insure a first-time driver, who is 12 times more likely to get into an accident than drivers with more experience.
3. No-Fault Insurance
No-fault insurance means that in the event of an accident, both parties will go through their own insurance regardless of who is at fault. However, this does not mean that both parties pay equally. If you are at fault in a collision, you will still have to pay more than the other driver, including your deductible, and your insurance costs will go up once your renewal date arrives.
4. Statutory Accident Benefit Coverage
This is actually a very important section of your policy, and it means that you are covered in the event of an accident or injury, regardless of who was at fault in the accident. Standard auto insurance in Canada covers third party liability, uninsured automobiles, direct compensation-property damage, and accident benefits. Statutory accident benefit coverage is legally optional in some provinces, so you’ll want to make sure that you’re covered in the event of an accident.
5. Effective Date
This one is easily explained, it’s the date your policy begins, however it could be problematic if you switch providers. Make sure that your policies line-up if you are switching, and pay attention to this date. If you are pulled over during a period when you are not insured, you could be fined up to $5000.
When it comes to your insurance, make sure that you understand the terms used to identify types of coverage within your policy. If you notice that you require one of the services on this list, but your current insurance policy doesn’t cover it, check with other leading insurance providers on the market. You could find the same coverage at a reduced rate.
Ryan Yarbrough is a small business consultant, speaker, and the manager at Davis Financial Services, a small business consulting firm.