Which car insurance policy is right for me?
Updated: Aug 11, 2022
A car insurance policy can offer coverage for many different types of claims. These include instances in which you have caused damage to another person’s property or injured yourself, other drivers, passengers or pedestrians.
In Canada, some auto insurance coverages are mandatory, while others are optional. Since auto insurance is regulated by the provinces and territories, you should always confirm what is legally required in your area. But, with few exceptions, all auto insurance policies must contain the following coverages:
Accident benefits: Includes coverage for injuries sustained in a collision. This includes medical care, rehabilitation and income replacement (if you or the other person is unable to work) for drivers, passengers and pedestrians involved in the collision. Accident benefits also cover funeral expenses and survivor benefits, if someone is killed in the accident. This type of coverage is mandatory in all provinces, except Newfoundland and Labrador.
Third-party liability: Provides compensation for drivers if they’re at fault in an accident and the other party is hurt or killed. It also covers damages to the other person’s property and related repair costs.
Uninsured auto insurance: Offers coverage for injuries and damages sustained through the fault of a driver who is uninsured or unable to be identified (in the case of hit-and-runs). Uninsured motorist coverage allows you to receive money that would have otherwise legally been recovered from the other driver’s insurance policy.
Direct compensation property damage (DCPD): In provinces with a no-fault insurance system (i.e. Alberta, New Brunswick, Newfoundland and Labrador, Ontario, Prince Edward Island and Quebec), DCPD means drivers deal with their own insurer to repair their vehicle and other damaged property, as opposed to seeking compensation from the other driver’s insurance company (when the other person is at fault). If you’re not at fault for an accident in a province without DCPD, you will have to seek property damage compensation from the other party’s insurance company.