Why Do You Have to Have Auto Insurance?

Person reviewing documents in front of a car

Having car insurance is a legal requirement, and with proper coverage, drivers are financially protected in the event of an accident. Auto insurance is essential as it provides coverage for drivers, passengers, pedestrians, and their property should a collision cause injuries or damage to a vehicle.

In the article below, we will look at what happens if you are caught without insurance, what the legal requirements are for auto insurance in Alberta and what the recommended coverage is.

Driving Without Insurance

In Canada, it is mandatory in every province and territory for drivers to have auto insurance. In Alberta, if an individual is caught driving without auto insurance, the minimum fine is $2,875 and can also result in license suspensions and vehicle impoundments.

Auto Insurance is the Law

Auto insurance is mandatory in Alberta, and for good reason. Could you image if drivers did not have to carry insurance? What would happen if someone caused a collision that seriously injured another individual or their car or property and the driver did not have the means to pay for medical, rehabilitation, lost income and for damage to vehicle or property? Legally, the individual at fault would be personally responsible to cover the associated damage costs, however, most people in that situation would not be financially able to do so.

What Auto Insurance is Mandatory in Alberta?

Every driver is required to have mandatory PLPD insurance, which is usually referred to as third-party liability insurance and covers personal liability and property damage.

Accident benefits also cover occupants of the car, regardless of who is at fault.  ‘Uninsured Motorist’ coverage which will protect you if you happen to have an accident with an uninsured driver.

What Insurance is Recommended?

Above and beyond the basic legal requirement, there are three different types of auto insurance that Albertans can choose from which include Collision, Specified Perils, and Comprehensive coverage. These provide higher coverage amounts for a different range of items, giving peace of mind to drivers and protecting them financially should an accident occur.

Collision Coverage

Covers the cost of repairs to your vehicle in the event that damage occurs as a result of an accident with another vehicle or object. Collision coverage will pay for repairs and damage, regardless of whether or not you were at fault for causing the accident.

Comprehensive Insurance

This insurance will cover any damages to your vehicle that was not a result of a collision, such as theft, vandalism, fire, hail etc… As the name suggests, comprehensive insurance coverage provides the highest degree of physical damage coverage to an auto other than damage by collision.

Specified Perils

Although not as detailed as comprehensive insurance coverage, specified perils insurance will provide coverage to the perils that you choose to select for your personal policy, which is not a result of a collision. Options can include fire, vandalism or theft, however, if  damage is caused to your vehicle that has not been specified in your policy, it will not be covered.

Getting the Best Rate

At Bow Valley Insurance, we will do the shopping for you. As insurance specialists since 1979, we know which companies can provide you the coverage you need at the best possible rate. We will also help find any discounts that may reduce your rate such as driver training, being over the age of 45, customer loyalty, multi-vehicle policies and more.

Contact us for a free, no-obligation car insurance quote with one of our knowledgeable, experienced insurance specialists.