Demystifying insurance: having one-way (or two-way) insurance
Article revised on 19 November 2018
Having “one-way insurance,” means having civil liability insurance. Among other things, this insurance covers property damage that a third party sustains in an accident for which you are responsible. Having “two-way insurance” means being covered not only for damage caused to a third party but also for damage to your own property.
Auto Insurance coverages:
The Quebec Automobile Insurance Act requires all car owners to purchase “civil liability” coverage. This insurance provides protection in the event of:
- Damage to your vehicle if you are not at fault and the responsible party has been identified
- Bodily injury or property damage caused to a third party for which you are liable in the event of an accident occurring in Canada or the United States.
Insurers generally suggest $1M of coverage. You can increase your coverage, especially if you travel outside Quebec. If you do, it is recommended that you increase your coverage amount to $2M.
In addition to civil liability coverage, you can opt for insurance that covers damage to your vehicle. Most popular coverages:
- “Collision or upset,” which covers damage that you sustain as a result of a collision in which you are at fault or when you are the victim of a hit-and-run
- “Comprehensive,” which covers damage such as fire, theft, vandalism and glass breakage.
Supplementary Auto Insurance coverages:
Based on your needs, certain additional benefits may prove worthwhile.
For example, how will you be able to get around following an accident that deprives you of your vehicle for several days? In this case, a Loss of use – Q.E.F. 20 benefit will prove very useful, because it will cover your automobile rental costs or your public transportation or taxi expenses. This benefit also covers additional accommodation expenses in the event of an accident that occurs far from home.
If you have a new car, you might want to protect your investment by adding Replacement Value coverage to your contract. This coverage will allow you to obtain a waiver of depreciation in the event of the total loss of your vehicle. In the event of a partial loss, the insurer will use new parts to replace damaged parts that cannot be repaired. In the event of a total loss, your indemnity will correspond to the cost of a new vehicle with the same features as those of the insured vehicle.
Another type of coverage, for Damage to non-owned automobiles – Q.E.F. No. 27 may also prove worthwhile. This additional protection covers damage to a borrowed or short-term rental vehicle. It often costs only a fraction of that offered by the renter.
So, what to choose?
Apart from the civil liability coverage that is mandatory in Quebec, your Auto Insurance can be customized to suit your needs in terms of choice of coverages and deductible amounts. It is up to you to determine the acceptable level of risk for your situation. In other words, if something were to happen to your car (accident, fire, theft, vandalism, etc.), would you be able to cover the full cost?
What does your Auto Insurance policy cover? Does this article help you understand about your insurance?
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