Car insurance in Canada is primarily designed to protect you, your vehicle, and others on the road from financial loss after an accident or other covered event. The core coverage is third-party liability insurance, which is legally mandatory in every province and territory. This covers costs if you are found responsible for injuring another person or damaging their property. Beyond this, provinces have different mandatory add-ons, like Accident Benefits which cover your own medical expenses regardless of fault. Collision and Comprehensive coverage are optional but highly recommended for protecting your own vehicle against damage from accidents, theft, vandalism, and weather events.
The specific requirements and standard policies vary significantly by province. For instance, Quebec has a unique public insurance system for bodily injury, while other provinces use a private system. It's crucial to understand your provincial rules.
Here is a breakdown of common coverages:
| Coverage Type | Mandatory? | What It Typically Covers | Key Considerations |
|---|
| Third-Party Liability | Yes, across Canada | Bodily injury and property damage you cause to others. | Minimum limits vary by province (e.g., $200,000 in most, but $1-2 million is recommended). |
| Accident Benefits | Yes, in most provinces | Medical expenses, rehabilitation, income replacement, and death benefits for you and your passengers. | No-fault coverage; benefits are paid regardless of who caused the accident. |
| Uninsured Automobile | Yes | Protects you if you're hit by an uninsured or hit-and-run driver. | Covers bodily injury and, in some cases, vehicle damage. |
| Direct Compensation - Property Damage (DC-PD) | Yes, in no-fault provinces like Ontario | Covers damage to your vehicle and its contents if another driver is found fully or partially at fault. | Only applies in provinces with a no-fault system for property damage. |
| Collision | Optional | Pays for damage to your own car from a collision with another vehicle or object. | Typically comes with a deductible (e.g., $500 or $1,000) you pay before insurance kicks in. |
| Comprehensive | Optional | Covers damage to your car from non-collision events like theft, fire, falling objects, or vandalism. | Also has a deductible. Often required by lenders if you are financing or leasing your car. |
When choosing a policy, consider your vehicle's value, your driving habits, and your financial risk tolerance. Speaking with a licensed insurance broker can help you navigate the options and find the right balance of protection and cost for your situation.
