How collision insurance works in Canada

Collision insurance is optional, not mandatory, but you need to look at your financial situation. The big question will be, "Can you afford to replace your car if you're in an accident?"

Collision protects your car when you're in a moving vehicle and crash. Comprehensive covers your car when it's parked, protecting it from risks such as theft, vandalism, or a falling tree. Both of them are optional coverages that can be added to any car insurance policy in Canada.

The minimum requirement is $500, but some carriers may require more. When selecting your collision insurance deductible, we recommend at least getting a $1,000 deductible. If you're able to take on a higher deductible you can save even more on your insurance.

No, if your car is parked and something happens to it, you would need comprehensive car insurance coverage on your policy in order to have financial protection. 

Depending on your insurer, they may offer an option for accident forgiveness. If you’re in an at-fault accident and you have accident forgiveness, your insurer won’t increase your premiums for one accident. If you have a history of accidents, you may not qualify for this add-on to your policy. Accident forgiveness may come standard on a policy, be sure to ask about it when you’re speaking with your car insurance broker.

The rule of thumb is if the cost of collision insurance is 10% or more than your vehicle's worth, it's time to drop it. For instance, a $5,000 car that costs you $500 in collision coverage every year just isn't worth it. 

A higher deductible means you'll pay less for insurance annually, but you'll have to fork over that higher amount if file a collision insurance claim. If you can afford the higher deductible, go for it.