Introduction to Car Insurance And Why It Is So Important To Have!
When getting into a vehicle you will learn that it is necessary to have car insurance. Car insurance protects you from any damages occurring while you are driving. The extent of damages covered in a collision will depend on the type of car insurance you select. The car insurance policy will have a detailed description of everything the policy covers if you are involved in a collision. So what is car insurance really and why is it necessary to have?
What is Car Insurance?
Auto insurance is required by law in Canada to operate a motor vehicle. The extent of the type of mandatory auto insurance coverage varies in each province. In the event of an accident or theft, auto insurance protects the driver and owner of the vehicle from incurring a financial loss. The contract of auto insurance is between the owner of the vehicle and the insurance company. The extent of damages or losses covered under auto insurance depends on the insurance policy. In exchange for having loss/ damages covered under the insurance, the owner of the vehicle pays a premium for the insurance. The auto insurance must include coverage for the primary driver as well as any additional drivers of the household who drive the vehicle on a routine basis.
Why do I need Car insurance?
While most provinces in Canada require a minimum of $200,000 of auto insurance coverage, Quebec requires only a $50,000 minimum of auto insurance coverage. It is recommended to have coverage for more than the minimum requirements of auto insurance. The law in Canada states that all motor vehicle owners must have liability coverage under their auto insurance policy. The liability coverage is to ensure the financial costs associated with medical bills and damages for all parties involved in a collision in the case that the driver is proved to be at fault for the accident.
What Are The Consequences of One opts Out of Auto Insurance?
There are hefty fines involved if the vehicle owner decides not to get auto insurance that can range from $5000-$50,000. If the owner of the vehicle is caught without having auto insurance they may also have their license suspended and vehicle impounded. If the uninsured is found at fault in a collision they will be held personally responsible to cover all medical costs and damages involved in the accident. The uninsured are viewed by insurance companies to be of higher risk and will have higher premiums attached to their auto insurance. The uninsured vehicle owners may not be able to obtain auto insurance resulting in them never being allowed to drive again if they can’t get auto insurance.
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