Understanding Comprehensive Car Insurance

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What is comprehensive insurance?

Comprehensive insurance in Canada is an optional add-on insurers offer customers to extend their policy’s protections. Somewhat counter to the meaning of “comprehensive” however, comprehensive insurance does not cover any and all damages to your vehicle. It is an insurance extension that bulks up any given insurance policy with additional coverages. 

All Canadian provinces require drivers to get liability insurance and personal protection insurance. Both these forms of insurance focus on what happens in the event of a car accident by making sure drivers are able to pay for damages to their property, as well as any damages incurred to the third party. Comprehensive insurance for cars protects you from damages not linked to vehicular accidents. When we think about collisions, we tend to think primarily about accidents involving other drivers which are actually covered by collision insurance. Comprehensive insurance is often purchased by drivers to further protect their vehicles from collisions outside this context.

Is comprehensive insurance mandatory in Canada?

Comprehensive insurance is not mandatory in Canada. However, it is highly recommended. Most Canadian drivers have this coverage.

What does comprehensive insurance cover?

Essentially, comprehensive insurance comes into play for any damages to the car that are not related to the driver’s actions (often damages that occur when the driver is not present). While comprehensive insurance policies vary from one insurer to another, most insurance policies will look somewhat alike. Comprehensive coverage accounts for:


What is not covered?

Specific perils

Specific perils are a vital component of comprehensive insurance. When purchasing comprehensive insurance, each insurer will make a list of the basic “perils” covered by their insurance policy. As mentioned above, there are some standard perils included in comprehensive insurance (namely natural disasters, flying objects and theft/vandalism). However, you can add specific perils to your comprehensive insurance policy to maximize its coverage. For example, comprehensive coverage does not explicitly cover collisions with animals. If you are driving in places with large deer populations and risk hitting one with your vehicle, you may want to extend your coverage by combining comprehensive insurance with collision coverage. Collision coverage paired with comprehensive coverage guarantee your protection from all kinds of collisions.

Fully comprehensive car insurance

Fully comprehensive car insurance, also known as All Perils insurance extends comprehensive coverage to third parties. This means that even if you were not responsible for your vehicle’s whereabouts at the time it suffered any damages, your insurance company will still compensate you. For example, if your car was stolen by someone (including someone in your household who is covered by your insurance) and while it was gone was caught in a fierce hailstorm that shattered your windscreen, your insurance company would step in and cover the repairs.


Comprehensive insurance on a used vehicle

Car insurance for used vehicles can be tricky and ultimately depends on the value of your vehicle and the potential cost of repairing the damage to your car. Generally speaking, cars that are less than ten years old are more likely to be worth insuring. Just as you must use your own judgment and description to decide if the cost of comprehensive insurance will outweigh the cost of your vehicle. Could you get another vehicle for less money than you would pay for and increased premium? You should also think about whether your car is worth repairing in the event of a relatively minor incident (eg. a broken windshield), or whether it would make sense to bypass the cost of damage to your car and invest in a new one. If your car is totalled in an accident (eg. crushed by a tree), you would be entitled to the full monetary value of the car prior to the incident. However, you would also have had to pay for the insurance coverage. Given that the falling tree is a relatively low-risk scenario but the insurance premiums are a sure thing, it might make sense to forego comprehensive insurance and bet against the risk of the tree. To make a fully informed decision, you can contact your prospective insurance providers and request insurance quotes for their comprehensive coverage plans. 

Is comprehensive insurance worth it?

Like all auto insurance in Canada, comprehensive insurance can be expensive. Because it is not a form of mandatory coverage, it’s completely up to you to decide whether or not comprehensive insurance is worth the couple of hundred dollars it will add to your insurance policy. Let’s take a look at the benefits of comprehensive insurance to help you gauge your situation. 

  1. Reassurance: Many people opt to buy comprehensive coverage for peace of mind. This psychological factor might mean more or less to you and will depend on where you live, how much driving experience you have (more seasoned drivers will have a better point of reference for what risks they actually face) and, of course, your budget. 
  2. The cost of coverage: Comprehensive coverage will cost you a certain amount per month or year. If you do not have coverage, repairs will cost a large amount of money all at once. If you can afford to pay lump sums for repairs out of pocket, you may want to avoid the prolonged cost of comprehensive coverage. 
  3. Your car loan: If you have financed your car with a loan, you will most likely choose to purchase comprehensive coverage. Actually, “choose” is maybe the wrong word. Many lenders request that drivers purchase comprehensive coverage to minimize the risk of them losing money. 

These are some of the most prominent examples of the advantages of purchasing comprehensive insurance. Ultimately, it is more or less up to you to estimate your own risks of incurring non-vehicular collisions. Do you live in an area with frequent tornados or earthquakes? Are there any long standing construction sites near your work or home? Is there a rampaging moose population encroaching on your property? If the answer to any of these questions is yes, you may want to consider purchasing a comprehensive plan. (Remember: you can tailor the particular perils included in your policy to suit your circumstances). 

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