Collision insurance

Everything you need to know about collision insurance in Canada

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What is collision insurance?

Collision insurance pays for damage done to your car as a result of an accident, either with a stationary object such as a tree or pole or with another person’s vehicle. It’s optional on your car insurance policy in every province except Manitoba and Sakatchewan.

But what if your car is parked and a tree falls on top of it? You can add comprehensive car insurance to your policy so insurance will pay for its repair. You can customize your policy to better suit your needs and budget. If you run into a tree, you want collision insurance.

A car insurance policy is mandatory in Canada, but not all are created equal. The standard minimum car insurance policies are there to support you financially in case of injury or harm (accident benefits), other people’s vehicles or property (third-party liability insurance), and in case someone hits you, but doesn’t have insurance (uninsured motorist).

How does collision coverage work?

With collision coverage, your insurance company would pay to repair or replace your vehicle, regardless of who was at fault. You would still have to pay for the deductible - this is the portion of money you have to pay before your insurance provider will pay the rest. The amount of the deductible is up to you. A higher deductible is one way to save on car insurance, but it also means you’ll pay more should an accident occur, before receiving any payment from your insurer. Typically, people will set a deductible between $500 to $1,000, but it can go as high as $5,000.

Do you need collision coverage?

If you lease or finance a car, your lender will require collision coverage. If you own your car, collision coverage is optional. Before declining or removing collision from your car insurance policy, consider these four main factors:

Examples of how collision insurance works

What is the difference between comprehensive and collision insurance?

Collision and comprehensive are often mentioned in the same breath because they are both common additions to a car insurance policy, but they are different products.

As we said, collision coverage covers damage to your car when it’s in a collision. Comprehensive covers damage to your car when it’s not in a collision. Comprehensive protects your car when it’s stationary. For instance from weather events like wind, fire, hail, or flood. If you’re a victim of vehicle theft or vandalism, an explosion, or even if an animal hits your car - that’s when you want comprehensive insurance.

Much like collision, comprehensive insurance is optional unless you have financed or leased your car. Comprehensive insurance is also mandatory in Saskatchewan and Manitoba.

To decide whether you should have comprehensive or not depends on the same factors listed above such as the value of your car, the cost of your deductible, and whether or not you can afford to buy a new car should yours fall victim to one of the incidents.

How much is collision insurance?

The cost will vary based on your insurance provider. Your insurance company will look at several factors in determining how much it will cost you such as your driving history, the current value of your car, and of course the amount of your deductible. If you have a clean driving record, it should be minimal. If you’re looking for a number, expect to add 10-20% to your existing policy, but again, understand that it depends on your insurer and their tolerance for risk.

If you have an older car and think your collision will be less since it’s value is less, consider all the other factors that come into play. Your insurer may look at things like how often your vehicle is stolen, your deductible, your driving history, and your age. All this to say, an older vehicle doesn’t necessarily get cheaper collision coverage.

How to buy collision insurance

If you have an existing policy you’re happy with and you have no reason to switch providers, give you car insurance company or brokerage a call and ask them how much it will be to add collision insurance to your existing policy. If you’re unhappy with the number, feel you pay too much for insurance as it is, bought a new car, or are shopping for car insurance quotes, you can simply enter in your postal code above and start comparing quotes from several suppliers and see how much collision insurance will be to add on.

FAQs about collision insurance

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