Do you need more than basic auto coverage?
Auto insurance: we all need it if we have a car that we plan to take on the road. But how much auto insurance do you need? Some of us need more than others, depending on the purpose of the vehicle and our family situation. Did you know that we’re all required to have a basic auto insurance amount depending on the province where we reside? It’s true.
When purchasing car insurance for the first time or shopping around to compare rates when your policy is up for renewal, you need to ask yourself if the basic mandatory provincial auto coverage is enough. You also need to ask yourself if you might need more coverage.
What is basic auto coverage?
Each province requires all drivers on the road to be insured for a minimum amount of car insurance for each vehicle they own. If you have an accident and don’t have the basic coverage, you could find yourself paying big fines.
Insurance is often seen as a product that no everyone uses, but we all pay for. That’s true, but you can’t look at the cost of insurance premiums as a waste of money. You have to look at the expenses as protection in case of an accident, theft, or damage to your car. Paying monthly insurance premiums is probably a lot cheaper than having to replace your car if it’s stolen, or paying medical bills if something worse happens.
What does basic auto insurance cover in Canada?
The required minimum amount of auto coverage varies per province. Check with the department of motor vehicles before purchasing insurance. Your car dealership and insurance agent should also be aware of the mandatory minimums. The minimums apply to all drivers who own or lease a car.
In the province of British Columbia the car insurance program is called Autoplan insurance. It requires all drivers to have minimum coverage for third party liability, accident benefits underinsured motorist protection as well as hit and run coverage.
Autoplan also offers additional coverage to include things like collision, specific perils, rental vehicles, and new vehicle protection. Of course, these additional types of insurance can also be purchased through a private third party insurance company. Other provinces have their own plans, or offer you the chance to go through another company.
Do I need more than the basic auto coverage?
Deciding if you need more auto coverage truly depends on how often you use the car, the age of your car, your personal financial situation, and the main reason you use the vehicle.
If you keep personal items in your car, or have added upgrades like an expensive stereo system, you may want to purchase additional specific perils coverage to replace particular items in the car. If you use your vehicle primarily for work purposes, you might need additional insurance for the business use of a vehicle.
If you don’t have enough savings to cover the damage and medical costs in case of an accident, you may want to purchase additional third party liability coverage or excess underinsured motorist protection.
The best thing to do is talk to a professional and be open and honest about the use of the vehicle. A licensed insurance agent can help determine the best coverage options. If the monthly cost is a little bit higher than expected, don’t ask yourself if you can afford the payments. Ask yourself if you can afford not to have additional car coverage.