How Much Auto Insurance Do You Really Need?

How Much Auto Insurance Do You Really Need?

If you are buying car insurance for the very first time or your current policy is up for renewal, you may be wondering how much auto insurance you really need. It can seem confusing trying to figure out how much collision, comprehensive or liability protection you should have. This is why we always recommend reaching out to a trusted insurance professional at Bow Valley Insurance so that we can work with you to find the right policy for your specific needs.

It is also helpful knowing the facts about auto insurance before rate shopping. Understanding what the legal requirements are in Alberta for car insurance, what insurance is recommended and what the most common claims are can help you make an informed decision regarding how much insurance you really need. Keep reading below to find out what you need to know about auto insurance.

How Much Insurance is Required?

In Alberta, you must have insurance that will cover damage and injury to other people and their property which is known as Public Liability and Property Damage or PLPD. You also need coverage for medical expenses for yourself or any passengers injured in a motor vehicle accident, which is called Accident Benefits Coverage.

The lowest legal limit of PLPD insurance that you can carry is $200,000, however, it is highly recommended that you carry much more. Typically, most insurance professionals will recommend a minimum of $1,000,000 in liability or higher limit.  Why have so much liability protection? If you are ever at fault in an accident and the driver or passengers in the vehicle you collided with are injured, damages and expenses can quickly add up and can easily surpass the minimum coverage requirement for PLPD.

What Insurance is Recommended?

There is no one size fits all solution for auto insurance. It can depend on a number of factors including whether you own or lease your vehicle, how much your vehicle is worth and what damages you would be willing to cover out of pocket.

The two most common types of optional auto insurance are collision and comprehensive.

Collision: Collision coverage will pay for repairs and damages, regardless of whether you were at fault for an accident with another vehicle or object. Collision insurance will also cover the repair costs or replacement.

Comprehensive: Comprehensive insurance protection provides the most coverage for an auto insurance policy and will also cover damages to your car that were not a result of a collision, such as theft, vandalism, fire or damage caused by extreme weather like an earthquake or hailstorm.

Common Auto Insurance Claims

While there are plenty of different reasons that auto insurance claims are filed each year, some types are more common than others. It is helpful to know what the most frequently filed claims are so that you can make sure that you have the proper coverage on your policy. The most commonly filed auto insurance claims are for:

  • Theft of vehicle
  • Collision with another vehicle
  • Collision with animals
  • Hail damage
  • Vandalism

Vandalism

It is also important to note that your auto insurance may not cover the theft of items from your vehicle. If it doesn’t, typically your property insurance (whether it be renters, condo or home insurance) will.

Having the right insurance policy is essential if you are ever involved in an accident. Let an experienced professional at Bow Valley Insurance give you peace of mind by finding you the best policy for your needs at a rate that you can afford. Get a free, no-obligation quote today.