Full Coverage Insurance – What is it and Should you Have it?
August 27, 2021
Having the right auto insurance coverage in place is important for your financial security. Some types of auto insurance are required by your provincial government and could also be required by your lienholder if you have financed your vehicle.
In addition to these mandatory coverages, you may have heard the term “full coverage” auto insurance. If you are wondering what full coverage means and if you should have it, you are not alone. The term can be confusing, so we have simplified it in this article.
Read on to learn what full coverage auto insurance is. If you should have it, then reach out to us at Duliban Insurance Brokers for more information.
What is Full Coverage Insurance?
Full coverage insurance is a term often used to mean a policyholder who has all of the applicable parts of auto insurance coverage in place. This includes mandatory coverages you may need to have on top of your additional coverages. The term “full coverage” can mean something a little different to every individual since, in each province, coverage limits and requirements differ.
In general, full coverage means having all mandatory coverages as well as additional endorsements on top of the required ones. There are generally four areas of required coverage in Canada:
- Third-Party Liability – Third-party liability coverage exists to protect other people and property from injuries and damages.
- Uninsured/Underinsured Driver – Uninsured and underinsured driver coverage is meant for situations where you are involved in an accident with someone who does not carry sufficient insurance or who has no insurance. It also applies in hit-and-run situations where the other driver cannot be identified.
- Direct Compensation – Property Damage – This is coverage to pay for property damage from an auto accident regardless of fault.
- Accident Benefits – this coverage is designed to fill gaps from healthcare when drivers and passengers are injured in auto accidents. If there is medical and rehabilitation treatment rendered that is not covered by provincial health care, this portion of auto insurance applies. The driver’s insurance company pays this benefit to avoid delays in determining fault from affecting health care to injured people.
In addition to the coverages described above, many people add collision and comprehensive coverages to these mandatory ones to create full coverage insurance.
Collision, or Upset, Coverage – Collision coverage is designed to protect your vehicle against damages sustained in accidents – with other vehicles or with fixed objects like fences or walls, as well as overturning.
Comprehensive Coverage – Comprehensive coverage pays for damages caused by perils other than collisions or upsets. For example, damage to your vehicle from storms, fire, theft, lightning, and hail fall under comprehensive coverage, as well as incidents involving animals like hitting a deer.
Should I get Full Coverage Insurance?
Whether or not full coverage insurance is right for you is a decision to research and consider with your agent. Depending on your situation and personal circumstances, you may decide having full coverage is worth the additional expense in premiums you will pay for the full coverage.
Premiums are More Expensive With Full Coverage Insurance
As you might expect, having full coverage insurance is more expensive than having a basic insurance policy. This is because you are protected against more perils and typically have higher coverage limits, along with additional coverages, when you purchase full coverage insurance. Those extras come at a price, but there are ways to reduce the cost of your full coverage insurance.
Be a Safe Driver: Having and maintaining a safe driving record is a way to keep your insurance costs down. Having even one ticket or infraction on your record can increase your auto insurance premiums for several years. Safe driving is good for your wallet and everyone’s health and safety. The Canada Safety Council offers a defensive driving course to help keep drivers safe on the roads – consider taking it and enrolling your teen drivers, too.
Apply all Applicable Discounts: Ask your agent to check all applicable discounts you may be eligible for on your auto insurance. You probably already know about bundling your auto and home policies and taking advantage of good student discounts, but there are often less obvious ways to save money on your auto insurance. For example, enrolling in your carrier’s paperless billing program or paying your premium in an annual payment rather than monthly can net you a discount.
Play With Your Deductible Amount: Try increasing your deductible to see how it affects your auto insurance premium. You can see how retaining more risk lowers your premiums; however, be sure you are comfortable with the deductible level you select. If you cannot afford your deductible, that could create other problems in the future so make sure you carefully consider the right deductible for your needs. Some carriers have programs and offer endorsements to reduce your deductible over time if you remain claims-free – this could be valuable if you select a higher deductible to save money on premiums.
Maintain Your Good Credit Score: Keeping up with your good credit score is a good way to help keep your auto insurance premiums as low as possible. Some provinces do not use credit scores, while others do, so maintaining your credit score will help protect your premium where it is used.
How do I Purchase Full Coverage Insurance?
As with any insurance purchase, do your research first to understand the coverages and limits you would like. Shop around to compare rates since premiums, policy terms, and conditions vary from carrier to carrier. We can help you to easily compare your options to save you time and money when shopping for full coverage insurance. There are many full coverage insurance carriers to choose from, and we work with 25 of the top-rated carriers in Canada.
Final Thoughts
Having full coverage auto insurance can be a great option if you want to be insured as fully as possible. It comes with a price, though, so shopping around to find the best rate is helpful. Whichever coverage level you select, be sure to understand the terms and conditions of your policy to know what is covered.
Every insurance policy has conditions and exclusions, so make sure you work with your agent and read your policy.
How do I Learn More?
To learn more about full coverage insurance, contact the experts at Duliban Insurance Brokers. Our licensed experts will be happy to answer any questions you have.
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