Across the country, car insurance is required by law whether you own your vehicle, lease or are financing it. While leasing or financing your vehicle is not likely to have an impact on your insurance premium, the type of coverage that you require may be different than if you own your vehicle outright.
Below, we will discuss the six different types of car insurance coverage that are available in Canada as well as what coverage is required if you own, lease or finance your vehicle.
Accident Benefit Coverage
This can cover costs involved in the recovery process if you are injured in an accident such as medical and rehabilitation expenses as well as can cover income replacement.
Third-Party Liability Coverage
This coverage is designed to protect you in the circumstance that you are legally responsible for causing injuries to someone or damage to their property in the event of a collision.
Uninsured Motorist Coverage
Will protect you if you have been involved in a collision caused by a driver that does not have liability insurance or has an inadequate amount to cover the costs involved.
Will cover damage to your car that was not a result of a collision. It could cover such items as fire, theft, vandalism, lightning, earthquakes, falling objects and more.
This protection covers the cost of replacing or repairing your car if you have been involved in a collision. There may be a range of deductibles that you can choose for collision coverage.
Additional Optional Coverage
There are a number of other optional coverages such as roadside assistance, rental vehicle costs and more which are available.
If you are leasing or financing your car, you may be required to purchase additional coverage. Generally speaking, these are the types of coverage you need whether you own, lease or finance your car.
- Uninsured motorist
- Third- party liability
- Accident benefits
Finance or Lease:
- Uninsured motorist
- Third-party liability
- Accident Benefits
Each of these coverages is subject to the limits set out in your policy and terms and conditions. Although there are minimum mandatory limits, you may wish to increase your coverage limit to ensure that you have the protection that you need.
Financing or leasing a car will not affect the cost of your insurance but you will need to advise your broker which category you are in, as it can impact how your claims are paid out in the event of an accident or loss.
If you have recently purchased a new vehicle or signed a lease agreement, contact a professional at Bow Valley Insurance to compare rates to get you the best price possible for the coverage that you need.