As commonplace as car insurance is in Canada, there’s nothing common about it. A policy can be specially fitted to suit your driving needs. And while it’s true that there are some coverages you must have, there are others you can opt to have to ensure you’re protected even further.

You might be surprised at the choices you have when you get your car insurance coverage!

Common car insurance coverages

People often think of car insurance as being ‘one size fits all’. This is a myth! The truth is, there are many different types of car insurance coverages that when bundled together, make up your policy. What these coverages are called and whether they’re required or not may vary by insurer and where you live.

The following are some of the most popular:

1. Accident benefits coverage

If you’re hurt in a collision, accident benefits coverage is a key part of your policy. It helps to offset many medical costs tied to your recovery. It can also provide aid for lost income if you can’t go back to work, as well as funeral fees if the worst happens.

Accident benefits is required across Canada. The only exception is Newfoundland and Labrador, where drivers must opt to have it included. In some provinces, like Ontario, you can buy extra coverage where needed.

2. Liability coverage

If you’re in an accident, liability coverage is vital if you’re sued. This coverage is used to defend you against lawsuits as well as pay any settlement or judgement if you lose.

Liability coverage is mandatory. However, the minimum you need varies by province. It ranges from $50,000 in Quebec to $500,000 in Nova Scotia¹. That said, many drivers carry $1 or $2 million in coverage.

Why so much more? Well, lawsuits can happen after a collision. And, they can get really pricey. If someone is injured or killed, the cost – including any settlement — can be significant. It’s simply more money than what most people could ever pay out of pocket. That’s why the higher your liability limit, the better protection you have against a serious financial hit if the worst happens.

3. Uninsured automobile coverage

It’s against the law to drive without insurance. Some drivers risk it, though, putting you at risk too! If an uninsured driver causes a collision, this part of your policy kicks in when you submit a claim. It can contribute towards your medical and rehab costs, funeral expenses if needed, and repairs to your vehicle. It’s also there for you if the driver flees the scene.

Uninsured automobile coverage is compulsory in many parts of Canada. It’s required in BC, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Ontario, and PEI.

4. Direct Compensation Property Damage (DCPD)

The cost to fix a vehicle after an accident can be pricey. And, when the other driver is at fault for the crash, your DCPD will cover the cost of your vehicle’s repairs.

Sound familiar? You’re not wrong if DCPD sounds a lot like collision coverage. The main difference between the two is fault. If the other driver is to blame for the collision, the claim goes through your policy’s DCPD. If you’re at fault, the claim goes through your collision coverage (if you have it). Another key difference is DCPD often doesn’t have a deductible, while collision does.

In Alberta, Nova Scotia, PEI, and New Brunswick, DCPD is required. In Ontario, DCPD isn’t required – but it hasn’t always been that way. The rules changed in early 2024 making it an option when it was previously mandatory.

5. Collision coverage

Good drivers can have bad days. If you’re involved in an at-fault accident and your car needs repairs or is a ‘write-off’, collision coverage can lessen the financial hit. But only if it’s included in your policy. Collision is optional and not everyone chooses to add it.

Like every rule, there’s an exception. Collision coverage may be required if your car is leased or financed. Why? Because the lender wants to protect their financial interest in your car and having this in place means repairs are more likely to happen.

6. Comprehensive coverage

Theft. Fire. Vandalism. Fallen trees and branches. There are many non-collision reasons your car could be damaged. When this happens, you would turn to your policy’s comprehensive coverage. Just like collision coverage, though, comprehensive is optional, unless you’ve financed or leased your car where it may be required by the lender.

7. Accident forgiveness

At-fault accidents happen. Luckily, for most drivers they don’t happen a lot. Because of this, as a perk many insurers offer first-time accident forgiveness. It’s an add-on to your policy that protects you against a rate increase after your first at-fault collision.

There are a couple of things to keep in mind with this offering:

• Not all drivers are eligible. You usually have to be collision-free for six years to qualify. This applies to all drivers listed on the policy.
• If a second at-fault accident follows, you could be rated for both collisions, plus any others that may occur.
• Eligibility will vary from insurer to insurer – so will the amount you could see your premium go up.

8. Ticket forgiveness

Despite what some drivers say, not everyone has had a ticket! In fact, many drivers haven’t. To reward these safer drivers, some insurers offer ‘ticket forgiveness’. It’s an add-on to your policy that protects you against a rate increase after your first minor ticket. And, like accident forgiveness, there are a few things to keep in mind:

• Only drivers who’ve been ticket-free for three years qualify.
• If you get a second ticket, your rate will likely be affected by both going forward (as well as any others you may get).
• Tickets that are major, serious, or criminal in nature are excluded from being forgiven and will factor into your rate.
• Eligibility will vary from insurer to insurer – so will the amount you could see your premium go up after a second ticket (again, if you get one).

What’s your type of car insurance?

When it comes to car insurance, you have options. You can customize your policy to fit your needs. There’s no ‘one size fits all’ policy anymore and that’s a good thing.