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Collision insurance – the auto coverage you need this summer

Summer driving doesn’t necessarily mean safe driving – so before you hit your weekend road trip, make sure you have the right coverage in place. Compare auto insurance quotes with us to find your lowest rate today.

One common misconception is that winter driving is more dangerous than summer driving, but that isn’t always the case. Warm weather doesn’t just bring out more families for road trips, but with the added factors of teen driving and construction projects, vehicle collisions aren’t all that surprising. 

So before you drive off to your cottage this summer weekend, you’ll want to make sure you have the proper vehicle protection in place with collision insurance. 

What is collision insurance?

Collision insurance is a type of coverage on your auto insurance policy that pays for the repair or replacement of your vehicle in the event you get into a driving accident. To make a collision insurance claim, the accident must be with either another vehicle or an object, such as a tree or street sign. This coverage is optional in all provinces in territories in Canada, except for Saskatchewan and Manitoba, but highly recommended.

With collision insurance, you’ll also need to set a deductible on your policy – this is the amount of money you’ll be paying out-of-pocket before your insurer foots the rest of the bill. Let’s say you hit another car while making a sharp turn, and your repair bill totals up to $1,000. If you have a $500 collision deductible, your insurance provider will meet you with the other half.

What’s the difference between collision and comprehensive insurance?

While collision insurance protects you against accidents while driving, comprehensive insurance covers damage incurred while your car is parked – essentially, non-collision-related events. This can include damage to your vehicle due to theft, vandalism, and falling objects (i.e. trees & hail).

How does no-fault insurance work in Canada?

Collision insurance is a key part of the no-fault auto insurance systems in Canada. A no-fault system doesn’t mean you’ll never be deemed at fault after an accident. Instead, it means you’ll only be dealing with your own insurance company, regardless of fault.

While some form of no-fault insurance may exist in other parts of the country, the following information is applicable to provinces that operate with direct compensation for property damage (DCPD) coverage: Alberta, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

Direct compensation for property damage means you’ll only be going to your own insurer for collision claims, even if another driver was the one that caused the damage. But this doesn’t mean you’ll always be covered – if you’re at fault, DCPD only pays out your claim if you have collision coverage. If you’re not at fault, however, your car insurance company will still pay for the damages whether you purchased the coverage or not. 

Are you at fault in a collision?

Do you have collision insurance?

Are you covered?














The one exception to this is a hit-and-run claim. If you’re not at fault and you don’t have collision insurance, but you can’t identify the driver who hit you, your insurance company might not cover the damages. That’s why opting in for collision insurance is a good idea – no matter how good of a driver you are, there’s still a chance your bill could be left unpaid. And having protection against a collision in any scenario can give you the peace of mind you need while driving. 

How much does collision insurance cost?

The cost of car insurance differs depending on your individualized factors, such as your location, vehicle model, and driving history. But with collision insurance, one thing is for sure – increasing your deductible will decrease the cost of your coverage.

To estimate the cost, we can look at a hypothetical driver using’s car insurance calculator. In the case of a 35-year-old female driver with a clean driving record, an auto policy consisting of a $1 million liability limit and no collision coverage costs approximately $109 per month. This number is the average of the three lowest rates offered, assuming most drivers will select an insurance company on the cheaper end. 

Once collision insurance (with a $500 deductible) was added to the policy, the monthly average rate became $141 – meaning, collision insurance costs about $32 each month for this specific driver. When the deductible was increased to $1,000, the average monthly rate became $138. So by doubling the deductible, this driver was able to save about $3 on her monthly auto insurance bill.

Because of the small savings, setting a higher deductible might not always be the best idea. Instead, you should factor in how much you’ll be able to pay out-of-pocket if you’re ever in a car accident and choose your deductible from there. 

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Do I need collision insurance?

Not everyone needs collision insurance. If you’re able to cover the repair or replacement cost of your car on your own, you may find the add-on unnecessary. This is often the case for drivers of older vehicles – if your car is only valued at $1,000, it probably doesn’t make sense to be paying for collision coverage with a $1,000 deductible. 

When to not drop collision insurance

But if you’re like most other drivers, and you wouldn’t want to cover repair or replacement expenses on your own, you should opt-in for collision coverage. Maybe you could afford to fix a small scratch on your door, but if your vehicle is declared a total loss, purchasing a brand new car won’t be easy without an insurance payout.

Besides this, here are some other cases in which you shouldn’t drop collision coverage:

  • You have a history of getting into car accidents.
  • You’re a new driver, or a new driver regularly takes out your car. 
  • You don’t like to take financial risks and enjoy having peace of mind when driving. 
  • You lease or finance your vehicle (purchasing collision coverage may be required).

Do I need to buy collision insurance for a rental car?

If you’re planning on renting a vehicle for a road trip this summer, you may be wondering whether you need to purchase collision insurance for the car. Rental companies typically offer a loss damage waiver (LDW) or a collision damage waiver (CDW) for a price – it’s not exactly an insurance policy; instead, by signing the agreement, the car rental won’t be able to pursue comprehensive or collision-related damages from you. But do you really need this?

LEARN MORE: Rental car insurance – everything you need to know

While it’s always a good idea to protect yourself financially, you might not need to purchase the agreement if your credit card already offers coverage for rental vehicles. But be sure to read the fine print as there may be exclusions and limits to your protection.

The other alternative is adding an endorsement to your personal insurance so that the coverage on your own policy will apply to vehicles you operate but don’t own, including rental cars. In Ontario, Quebec, Alberta, and Atlantic Canada, this is known as endorsement 27 (OPCF27, QEF27, or SEF27) – legal liability for damage to non-owned vehicles

Provided you already have collision insurance on your personal policy, the endorsement ensures the rental car will also be covered against collision damage. But as always, keep in mind that there can still be limits and exclusions. For instance, you may only be protected within Canada and the United States, and your insurer could potentially cap your payout to a limit. 

The bottom line

Just because the roads are clear in the summer, doesn’t mean you’re safe from a car accident. To learn more about collision insurance, be sure to reach out to a licensed auto insurance broker in Canada. And once you’re ready to opt-in for the coverage, make sure you’re getting the best rate on the market by comparing auto insurance quotes with us. 

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