Alberta Car Insurance 101- Part 1
Whether you are a new driver, new to Canada or you just need a refresher on what-means-what with car insurance. Learning about car insurance in Alberta can be confusing so we wanted to make sure people had the true definitions of what each coverage is. Educating yourself will allow you to make great decisions.
What is Vehicle Insurance?
Car Insurance, also known as auto or vehicle insurance, is a contract between you (the insuree) and an insurance company (the insurer) where you agree to pay a premium to the insurer and they agree to pay the insuree for any loss to due a claim that is stated on your insurance policy.
Who is Covered for Vehicle Insurance?
Insurance covers the drivers, passengers, pedestrians and anyone involved in the claim.
What is Covered for Vehicle Insurance?
Vehicle insurance covers a variety of things. Medical injury, property damage, and Third Part Liability.
What is Basic Insurance?
In Canada, it is required by law that each driver has a minimum amount of insurance on their vehicle. You cannot drive a vehicle without the minimum amount of Third Party Liability and Accident Benefits. The minimum amount of third party liability in Canada is $200,000.
What is Third Part Liability?
Third party liability is insurance coverage that covers the insuree if they are at fault.
What is Accident Benefits?
Accident Benefits covers the insuree and passengers with medical costs, loss of wages if you or passengers are injured in a car accident.
There are also several optional car insurance coverages. This means over and above the basic insurance required by law to operate a vehicle. Incorporating additional insurance is extremely important to add to your policy.
Additional Vehicle Insurance Coverage in Alberta
Extended Third Party Liability (TPL)
In addition to the basic third party liability, an insuree can purchase more of this type of coverage. This coverage protects you from any costs against you if you are at fault for a vehicle accident. TPL will protect you financially up to the amount you have chosen on your policy.
Collision insurance protects you if you are at fault for a vehicle accident and you cause damage to your vehicle.
Specified Perils Coverage
Specified Perils vehicle insurance covers you for any type of claim not related to collision. Examples of these types of claims would be, Fire, theft, vandalism, hitting an animal, weather and falling objects. on your policy, specified perils are listed for what you are covered for.
Comprehensive protects you from all coverages not including a collision. Comprehensive car insurance, just like the way it sounds covers you for a wide variety of non-collision coverages such as:
- Natural disaster
- Falling objects
Loss of Use Coverage
Provides you with a rental vehicle or other sources of transportation while your vehicle is being repaired.
This is part 1 of car insurance 101 describing basic auto insurance to additional coverages. Check out next week’s post for more information on additional insurance coverages.
We encourage all insured drivers to purchase additional auto insurance to protect yourself from financial responsibility. Contact your broker today with any questions you may have.