This following information is for convenience only; it is not a legal document and it does not in any way modify your insurance policy; and it concerns only private passenger automobiles.  Please be sure to discuss your insurance requirements with our staff!  Read your policy carefully, and if there’s anything you don’t understand, just ask!  The words “automobile,” “car” and “vehicle” are used interchangeably.

 
FINANCIAL PROTECTION:

When you buy car insurance, you’re buying financial protection and peace of mind.  Your insurer uses the premiums of thousands of other vehicle owners to pay for the financial losses of those who are involved in collisions and other mishaps.  Insurance is a way of sharing risk. Your car insurance premium represents just a tiny fraction of your total financial risk when you own and operate a vehicle.  If you were to drive your car without insurance, not only would you breaking the law, you would be risking your savings, home and other assets. An insurance policy is a legal contract. It may contain certain terms that, in additions to their everyday meanings, have meanings that are unique to that particular policy or more generally to the subject of insurance.  There are regional variations as well.

 

AUTOMOBILE INSURANCE COVERAGES

Third Party Liability Insurance:  Third party liability insurance covers you if you vehicle injures someone else or damages his or her property…and you are held legally liable.  Should a claim against you be more that your level of coverage, you can be held personally responsible for the balance.  For this reason, most drivers purchase more than the minimum coverage required by law, $200 000.

 
Accident Benefits: This coverage provides compensation, regardless of fault, if you, your passengers, or pedestrians suffer injury or death in an automobile collision. Accident benefits coverage is compulsory in all provinces except Newfoundland and Labrador.

WHAT IS COVERED BY ACCIDENT BENEFITS?

·        Medical: Reimbursements for the cost of medical treatments not covered by and medical, surgical, dental or hospital plan or law and various rehabilitations costs.

 ·        Funeral: Payment towards funeral expenses of those killed in a car crash.

 ·        Disability income: A weekly reimbursement based on various factors such as the injured person’s employment status or net wages before the crash and degree of disability.  Limits, time periods over which payments are made, and methods and criteria for determining amounts paid vary considerable between provinces.

 ·        Death:  A payment following the death of an insured person; the amount will depend on the age, marital status and the number of dependants of the deceased.

 

Uninsured Automobile Protection:  Uninsured automobile protection is universal in Canada.

  • Bodily Injury: This coverage provides up to $200 000 if you are injured or killed through the fault of a motorist who has no insurance, or by an unidentified vehicle.  You receive payment under this protection through the Uninsured Automobile coverage in your policy – unless the Canadian province, territory or U.S. state where you were injured has a special fund from which to claim.  You will be reimbursed for the money you would otherwise be entitled to receive from the uninsured/ unidentified motorist.
  • Damage To Your Vehicle: Available coverage varies widely, form none in Alberta, to $25 000 in Ontario, $50 000 in Quebec and as much and $200 000 in provinces such as Manitoba.  Some jurisdictions require that the uninsured motorist be identified.  See a qualified broker, agent or insurance company service representative for more information.

 
First Party Liability Insurance:  This provides Physical Damage coverage (for collision, fire, theft, etc.) for your own vehicle.  Loss or damage from mechanical breakdown, normal wear and tear, rust, corrosion, and so on is not covered.

Collision Or Upset: covers loss or damage caused by collision with another object or by upset (usually rollover).

Comprehensive: covers loss or damage from any peril other than by what is covered as “collision.”  Some losses are excluded, however; examples include theft by a member of the household, damage arising from mechanical failure or corrosion, and the loss or theft off audio taped or compact disks not actually the player.

Specified Perils: covers loss or damage causes by fire, lightning, theft or attempted theft, windstorm, earthquake, hail, explosion, riot or civil commotion, falling or forced landing of an aircraft or falling aircraft parts, rising water, or by the stranding, sinking, burning, derailing or collision of any boat, railcar, truck, or other conveyance that is transporting the vehicle.

All Perils: covers all types of losses except those that are specifically excluded.  This is the broadest coverage available.

 
ENDORSEMENTS AVAILABLE:  A number of other options are available which tailor you policy to your particular needs.  Some of the more commonly purchased options coverages (known as endorsements or change forms) are.

Loss Of Use: This coverage pays a specified daily amount subject to an overall limit for rental of a vehicle while yours is being repaired.  This can be used for car rental, taxis, or public transportation.  If you have All Perils, Comprehensive, or Specified Perils coverage, your policy automatically gives a certain amount of Loss of Use coverage if your vehicle is stolen.

Waiver of Depreciation: When a new car is driven from the dealership for the first time, the market value begins to drop immediately.  However, you can buy insurance coverage for a new vehicle which, for a limited time, will compensate you for insured losses as if the car was brand new.  This feature can be particularly useful when a relatively new car is badly damaged or stolen.  

Family Protection Endorsement.  When a third party is at fault for a crash in which you or family members are injured there is always the possibility that the third party could be uninsured or have a low limit of liability.  It is possible to purchase an endorsement (not available in Quebec) to increase that limit to the same liability limit that you have on your own policy.  When you cannot fully recover your damages for bodily injury, this endorsement covers the difference between the value of your claim and the third party’s limit of liability insurance, subject to your own Third Party Liability limit.  This coverage applies only to you, your spouse and any dependent relatives of either.
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DOES MY AUTOMOBILE INSURANCE POLICY PROVIDE ANY COVERAGE WHEN I DRIVE SOMEONE ELSES CAR?

Under certain circumstances, yes.

A Temporary Substitute Automobile is one that you are using while your vehicle is being repaired or serviced (or when you car has been stolen).

The policy of the owner of the vehicle you are driving is primary (that is, it’s first in line to respond to claims).  Your policy would be called upon to pay only if the other vehicle did not have insurance or if the limits were insufficient to pay a judgment.  There is no coverage for damage to the vehicle itself, unless it can be proven that you were legally responsible for the damage.

It is important not to remove insurance coverage from a vehicle that has been destroyed or stolen before it has been replace by another vehicle.  By doing so, you would be eliminating the benefit provided for the temporary substitute vehicle that you may be operating at the time.

Coverage also applies to private passenger vehicles other than those describe in the insurance policy when driven by you or your spouse. Your policy will cover Third Party Liability, Accident Benefits, Uninsured Automobile and, in Ontario and Quebec, Direct Compensation – Property Damage.

Examples of when this coverage might be triggered if you are in a collision are:

  • You are driving a rental car on vacation;
  • You are driving a friend’s care at his or her invitation;
  • You have borrowed a visitor’s car for a trip to the store

 

 

·        Liability for Damage to Non-Owned Vehicles and Providing Other Coverages When Insured Persons Drive Other Automobiles.                                                       

This endorsement:

·        Extends Third Party Liability insurance from the normal “named insured and spouse” offered under the basic policy wording to other listed persons.  This extension is useful if the “insured” is a corporation.

·        Provides protections for your Legal Liability for damage to a non-owned automobile, including a rental car. This coverage is separate form the standard coverage for Temporary Substitute Automobile.