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How collision insurance works in Canada

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What is collision insurance?

Matt Hands

Collision insurance pays for damage done to your car as a result of an accident, either with a stationary object like a guardrail, or with another person’s vehicle. It’s an optional form of coverage in every province except for Manitoba and Saskatchewan drivers. 

With collision coverage, your insurance company pays to repair or replace your vehicle, regardless of who was at fault. You're responsible for paying the deductible – the portion of money you have to pay before your insurance provider will pay the rest. You set your deductible amount. 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.

How much is collision insurance?

The cost will vary based on your insurance provider. Your insurance company will look at several factors including your driving history, the current value of your car, and your deductible amount. 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 its value is less, know that an older vehicle doesn’t necessarily get cheaper collision coverage. Read our blog for more info: Do you need collision coverage on an older car?

Are you considering collision insurance?

In under 5 minutes, you can compare multiple car insurance quotes with collision insurance coverage from Canada's top providers - it's that easy.

Do you need collision insurance?

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:

The value of your vehicle


The cost of your deductible


Your financial situation


What your insurance provider will pay


Examples of how collision insurance works

You're at fault in an accident and have collision insurance


You're at fault in an accident and have no collision insurance


You're not at fault and have collision insurance


You're not at fault and have no collision insurance


Frequently asked collision insurance questions

Is collision insurance mandatory?


What's the difference between comprehensive and collision insurance?


How much should my collision insurance deductible be?


Will collision insurance cover my vehilce if it's parked?


What is accident forgiveness?


When should I drop collision insurance?


Is it better to have a $500 deductible or $1,000?


Matt Hands, Business Director of Insurance

With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read more

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