Many of us like the independence that having a car provides. However, with the ability to drive a vehicle comes responsibility. Every province and territory in Canada requires that you have insurance if you want to drive a car. In fact, if you drive without insurance, you run the risk of losing your driver’s license.
Car insurance is a necessary expense for Canadians, but it doesn’t have to be overly costly. If you are careful about your coverage, and you take the time to compare your options, you can find cheap car insurance that provides you with adequate coverage at a reasonable cost.
What Auto Insurance Coverage Do You Need?
First of all, you want to make sure that you have all of the auto insurance coverage that you need. Canadian drivers are required to have basic liability coverage. This is coverage that kicks in when you damage someone else’s property, or if you cause injury to someone else. The idea is that your insurance pays for such damage or injury when the accident is your fault. That way, someone else isn’t paying (financially, at least) for your mistakes.
Other typs of insurance include the following:
- No-fault: This is insurance that protects you if the other driver is at fault and you don’t want to go through the hassle of contacting his or her insurance. It also protects you and pays the bills for your own injuries and damage if the accident is your fault.
- Collision: This is insurance that covers damage to your own car. It doesn’t even have to be damage by another car.
- Comprehensive: Other types of insurance won’t cover non-accident typs damage. With comprehensive, you receive protection in the event of natural disasters, fire, theft, and vandalism.
- ERS: Emergency Road Service is all about helping you get back on the road. If you breakdown and need a tow, or if you need light repairs made, this coverage will take care of the costs.
How to Pay Less for Auto Insurance
If you want to pay less for auto insurance, the key is in your driving behaviours, as well as in the coverage that you have. The higher the coverage amount you require, and the more coverage you ask for, the higher your premiums will be. However, you can get a break in the cost if you are a safe driver. If you aren’t at fault in accidents, and if you don’t have traffic violations, you will have lower premiums.
Your premiums are also influenced by what type of car you drive, where you live, and the deductible that you set. You want to make sure that you have adequate coverage so that you are protected from paying big in the event of an accident, no matter who is hurt — and no matter who is at fault.
A higher deductible, meaning that you pay more out of pocket, can help you keep a lid of regular premium costs. If you are worried about paying a higher deductible, you can start an emergency car fund in order to help you afford the cost so that you aren’t running into problems when it comes to pay your higher deductible.
In any case, the risk of not having car insurance is too high. You need some coverage in order to make sure that you are adequately protected.
Miranda writes for a number of financial web sites. Her blog is Planting Money Seeds.