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Why you need car insurance?

Autoplex Alberta
Gripping Gears Blog
Why you need car insurance?
Autoplex Alberta

Why you need car insurance?

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In order, to own and drive a vehicle you are required to have insurance. Car insurance is mandatory in all provinces in Canada and some provinces require more than standard insurance coverage. Make sure to overlook your province's insurance requirements before buying or driving your vehicle.

Who does car insurance policy cover? 

Depending on your insurance policy, insurance companies will pay for claims of loss or events covered by your policy. Car insurance mainly protect you from: 

There are a range of insurance types to cover specific events. These are only a few examples of insurance types available.

Liability insurance: covers losses and damage to other vehicles. This does not include damage on your vehicle. 

Accident benefits: covers the costs of your own medical expenses and loss of income when you’re in a car accident. 

Additional insurance coverage - car insurance policies can provide additional benefits, such as comprehensive insurance and collision insurance. 

Comprehensive insurance: covers the cost of repairing or replacing your car due to other types of damage or loss. This includes:

This type of insurance does not cover loss or damage to your car if you hit another car or object in a collision. 

Collision insurance: covers the cost of repairing or replacing your car if it hits another vehicle or object. 

What a car insurance policy does not cover? 

Most types of car insurance policies do not cover the loss of personal possessions, such as theft from your vehicle. Typically home or tenant insurance covers these kinds of losses. 

However, it is important to thoroughly understand your insurance policy to know what is covered. 

How is insurance companies calculate premiums? 

First, what is a premium? Premium is the amount paid to get coverage. However, how do companies determine the rate of premium. The factors to consider premium are: 

Additionally, if you are shopping for a new vehicle, it is important to consider that some insurance companies consider the car model and type as a factor in calculating your premium. Therefore, it is important to select a vehicle that doesn’t negatively affect your insurance premium. 

These factors will consider the rate that you pay to have coverage. This will pay towards your deductible. What is a deductible? It is the amount of your claim agreed to be paid before your insurance company pays the remainder. 

How do you determine what policy to get?

Depending on what type of coverage you are needing. It is important to overlook different policies and companies to find the best coverage and rate. Comparing prices will allow you to find the lowest insurance premiums. Additionally, insurance companies offer bundle rates, for example, combining house and car insurance. This can provide additional options and savings.

What happens after you submit a claim? What are your car insurance settlement options? 

Repair or replace: the insurance company will cover the costs to fix or rebuild to the same condition before the vehicle was damaged.

Betterment: the insurance company will only cover repairs for the vehicle before it got damaged. Therefore, if there were additional issues or repairs needed before the accident then they will not be included in the coverage by the insurance company.

Write-off: if the damages on the vehicle are worth more than the value of the vehicle then the insurance company can "write-off" the vehicle. This means the insurance company will provide a cash settlement based on the value of your vehicle before the damage, instead of repairing the vehicle. 

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