Auto insurance covers you for any physical damage that may occur due to an accident. It also covers you if you are liable for an accident and get sued by a third party.
Auto insurance is mandatory to drive your vehicle here in Canada. Without vehicle insurance you will be considered as uninsured motorist and if found guilty the penalty for driving without insurance can be $5000 – $10,000.
Here are the main coverages explained in a nutshell.
Third Party Liability Coverage (Mandatory Coverage)
This section of your automobile insurance policy protects you if someone else is killed or injured, or their property is damaged. It will pay for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. In the market the minimum liability coverage is provided generally for $1,000,000 or $2,000,000.
Collision
Collision covers you if you collide your vehicle with an object, or another vehicle or if your vehicle upsets. Collision coverage is mandatory if your vehicle is financed of leased. Generally this coverage has a deductible of $500 or $1000.
Comprehensive
Covers your vehicle if it gets stolen or there is damage on your vehicle due to theft or attempted theft.
Optional Endorsements
OPCF 20 (Loss of Use): Provides you coverage for rental vehicle when you have a loss and your vehicle needs to be fixed. Insurance company will provide you with a limit for this coverage, generally $1500, $2500, $3000 offered by companies.
OPCF27 (Coverage for Non-Owned Automobile): If you are driving a non-owned automobile, OPCF27 will provide you the coverage. This endorsement brings your current vehicle’s physical damage coverage and puts on a vehicle that you have rented. This coverage has a limitation applied to physical damage coverage up to $100K and generally is covered for 30 consecutive days. Applies to CANADA and Continental USA.
Accident Forgiveness: Will forgive your first at-fault accident if you maintain an accident free record for the last 6-7 years (varies from company to company). This coverage is not inter-changeable meaning if your accident is forgiven by company A, if you want to switch insurance company to company B, then company B will not honor the AF, and will rate you for the at-fault accident.
Minor Conviction Protection: Will forgive your first minor police ticket.