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How much car insurance do I need?

How much car insurance do I need?

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Published by Leonardo Calcagno

Purchasing a car is more than having the freedom to go wherever you want to. It also means you are responsible for everything that happens while you are driving. If are involved in an accident, or your vehicle gets damaged by other factors, it can cost you a lot of money. Paying for car insurance every year can protect you when this happens and cover all the repair costs. In this regard, most people wonder, how much car insurance do I need? Here you will find the answer.

The question, how much car insurance coverage do I need? is very common. The reason why people don’t have a clear idea of how much protection they need to buy, is that it changes depending on where you live. Here in Canada, according to the law, all drivers should have minimum coverage. However, apart from the legal requirement, most car owners decide to purchase certain add ons to increase their protection.

Before you ask for quotes from different insurance companies, you must understand how much car insurance you need. That’s why in the following section we will explain the minimum required coverage. Then, we will also give you some additional policies you might want to consider purchasing. 

How much car insurance do I need?

If you ask an expert, “how much car insurance do I need?” chances are they will explain to you the insurance required by the law. But, then, they will offer you more options that will broaden your protection. The reason why insurance companies do that is that the minimum coverage has limits. In this section, we will focus on the basic coverage and what it offers.

Remember that the basic coverage can change depending on the province you live in. However, keep in mind that in Canada it is illegal to drive a car without proper insurance. In the unfortunate case that you get caught without the required coverage, you could get a $50,000 fine. But, in an extreme case, the officer can also decide to suspend your driver’s license for up to one year.

Whether you have a sports car or a family ban, the following are the four minimum insurances.

  • Third-Party Liability Coverage (TPL)

TPL covers you when you damage somebody else’s property, injure or kill a third party when driving. The advantage of purchasing TPL is that it will also protect anyone who drives your vehicle under your authorization. This standard insurance policy applies to all types of vehicles, including trucks, motorcycles and snowmobiles. 

The mandatory TPL coverage is $200,000, but we recommend carrying more than that. To be sure, ask your provider, “how much liability insurance do I need for my car?”. That way, they can consider which one will be the appropriate amount for your family. On average, most car owners carry a minimum of $1,000,000 on TPL insurance.

Apart from covering the damages, TPL will also take care of all the legal costs involved with your claim. If you have more questions about the TPL policy visit, Surex.

  • Statutory Accident Benefits Coverage

This policy covers replacement, medical care, attendant care and rehabilitation, among others. Everyone included in the insurance, such as your family members, can access the benefits. The great thing is that whether is determined it was or wasn’t your fault, the Statutory Accident Benefits will protect you. When you purchase this policy, in case you are hurt, you can receive up to 70 percent of your income.

  • Uninsured Automobile Insurance

The uninsured Automobile Insurance is a must-have according to the law. This policy will protect you in case you suffer a loss of a family member or your property is damaged by an unidentified vehicle. An unidentified vehicle is classified as a hit-and-run driver, or if you are involved in an accident with an uninsured vehicle. You can purchase this coverage to a maximum of $200,000.

  • Direct Compensation – Property Damage (DC – PD)

In case the other vehicle causes the accident, DC-PD will cover the costs for any damages and compensate you. The only way you can access the benefits of this policy is if you meet three conditions. First, it should be certified that the other driver caused the collision. The driver involved should have an insurance policy. Third, the accident happened within the province of Ontario. Due to the limits of this policy, most drivers decide to expand their coverage in case they are involved in an accident outside the province. 

Additional Coverage For Your Vehicle

Whenever you wonder, “how much car insurance do I really need?” You mustn’t settle down for the minimum. Accidents have expensive consequences, especially if somebody was injured. That’s why you need to make sure you are completely protected through add-ons to your policy.

  • Family Protection Endorsement

This is one of the most important additional coverage for your policy. The majority of insurance companies will even include it without you asking for it. The Family Protection Endorsement protects you, and other family members which are injured thanks to the negligence of an uninsured driver. Usually, this insurance will have the same value as the TPL policy. 

To understand how the Family Protection Endorsement works, imagine you get into an accident with your family. After the collision, the damages end up being $600,000, but the other vehicle has insurance only for $200,000. There is even the possibility that the driver doesn’t have protection. In that case, with the endorsement, you can recover the amount that is missing.

  • Additional Third Party Liability Coverage

If you have an experienced insurance agent, is crucial to ask them, “how much liability insurance do I need for my car?”. The majority of them will tell you that the minimum is $200,00, but they recommend $2 million. That might sound like a lot of money, but it will cover all your costs in case of an accident.

Final Thoughts

Every driver has wonder at some point, “how much car insurance do I really need?” The answer is the minimum plus some additional policies. The best way to choose the right coverage is by talking to your insurance agent or provider. On average, most people buy a $1 million policy, but we recommend $2 million to be safe. Before purchasing a policy, check the minimum requirements according to your province and ask for several quotes.

Photo by Dids from Pexels

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