Collision insurance can provide drivers with invaluable peace-of-mind. However, it isn’t mandatory in Ontario and, in some cases, it may not be necessary. By taking an evaluative look at your current insurance coverage, the cars you drive, and your financial situation, you can determine whether adding collision insurance is in your best interest.
What’s the benefit of having collision insurance coverage in Ontario?
Being involved in a car accident is stressful. Of course, the health and well-being of everyone involved is the first and foremost concern. From there, ensuring you have a working vehicle, and have the ability to manage the repair costs of the accident, inevitably becomes a key priority. To protect yourself from the financial burden an accident can bring, adding collision insurance gives you extra coverage and security. Even if you are at fault, the repairs or replacement costs will, for the most part, be covered.
What does collision insurance cover?
Quite simply, collision insurance covers the damages to your insured vehicle caused by hitting another vehicle, an object, or resulting from a roll-over.
The primary benefit that collision insurance provides is the peace-of-mind of knowing the financial impact of an accident has been minimized. Regardless of who’s at fault, you’ll be covered for the repair or replacement of your vehicle. This becomes even more valuable if the other driver is uninsured. In the instance of a hit-and-run, where your vehicle has been hit by someone who left the scene, you can rest assured that collision insurance will be there to cover your damages – just make sure you report it to the police.
What’s not covered? In general, collision insurance only covers damage to your own vehicle that occurred while it’s in motion. Coverage does not include:
- Damage to someone else’s vehicle that’s over and above what’s covered by liability insurance.
- Damage that occurred while the vehicle was parked, such as from a falling tree, an animal, or natural disaster.
- Medical bills that occur as the result of an accident.
Learn more about coverage in the event of an accident by checking our our post: Do I still need to pay for my deductible if I am not at fault
What’s the difference between comprehensive auto insurance and full coverage, or all-perils, auto insurance?
Comprehensive insurance ensures your vehicle is protected while it’s parked. The tree branch that lands on your car during a nighttime storm, is the kind of damage that comprehensive insurance would cover.
Vandalism is another example. If you’re about to head home from work and realize your windows have been broken, paint has been damaged, or tires have been slashed, your comprehensive coverage would take care of these expenses.
As a rule of thumb, collision insurance is your coverage when you’re driving; comprehensive insurance provides coverage for damages while your car is parked.
All-perils, or full coverage auto insurance is an all-in-one package that provides all the coverage a driver needs or wants. It includes third party liability coverage, which is required by law in Ontario, both comprehensive and collision coverage, as well as additional optional coverage a driver may want.
Why should I consider having collision coverage in Ontario?
The value of your vehicle should be your primary guide when considering collision coverage. If you’re driving an older vehicle that may only be worth the amount of your deductible, collision insurance won’t be in your best interest. If you have a newer or luxury vehicle, an accident could result in costly repairs or replacement – making collision coverage worth the investment.
Your personal financial situation is also an important consideration. If an accident occurs, do you have the means to comfortably manage the sizable expense of an unexpected auto repair? Assessing the potential stress that could be incurred from managing the cost of the repairs, will help determine the value of having collision coverage.
How much collision insurance should I have?
The best way to determine how much collision insurance you need is by assessing the value of your vehicle. Having insurance coverage that greatly exceeds your vehicle’s worth will only result in excessive premium expenses that you don’t need. Similarly, if you have a newer or higher-valued vehicle, not having enough coverage could leave you with a larger-than-expected repair bill if an accident occurs.
Your local insurance provider should give you the option to choose the amount of collision deductible when you purchase auto insurance coverage.
Alt: Your local insurance provider should give you the option to choose the deductible amount when you purchase auto insurance coverage..
Is collision insurance better than comprehensive?
Collision and comprehensive insurance are different – even complementary to each other. Since comprehensive insurance protects you from damage to your vehicle while it is parked, conceivably this may cover more insurable situations than collision insurance. However, collision insurance provides protection and peace-of-mind while the car is in motion. Together, both give you the security of knowing an unexpected repair will be covered.
How to File a Claim for Collision Insurance Coverage
Having some understanding of the auto insurance claims process can help make the ordeal of an accident a little easier.
The first question most have after an accident is whether to call the police. If any injuries have occurred, or if damages look to exceed the $2000 mark, you are legally obligated to do so. You should also call the police if you believe the driver involved is under the influence of alcohol or drugs. If you’ve determined that this is a minor accident where no injuries have occurred, you can report the accident within 24 hours to a Collision Reporting Centre. Be sure to capture all of the key information of those involved, and details of the accident itself. Record the other driver’s name and licence number, licence plate number, as well as insurance policy numbers.
Your insurance agent really can make this difficult situation a lot easier. Many drivers are reluctant to involve their insurance providers after an accident, particularly after smaller ones, but their knowledge of the process, as well as your policy, will be well worth the call. They will help you determine whether a claim is warranted, and provide you with the next steps.
Once you and your agent have initiated the claim, you’ll be contacted by a claims adjuster. This could be in person or over the phone; they will guide you through the process and, in most cases, have you fill out a Loss Claim form. This form assembles all the necessary information from the accident – the make and model of your car, your policy information, the other drivers involved, as well as information about the accident itself.
After your claim has been filed, the level of your settlement will be determined and issued.
Frequently Asked Questions About Collision Insurance
When should I drop collision insurance?
Although a number of factors should be considered, a quick guideline is when the value of your vehicle approaches the cost of your deductible, collision insurance no longer becomes worthwhile.
Do I need collision insurance for a rental car?
Assuming you want coverage in case of an accident, yes, you should have collision insurance. Covering major vehicle repair bills out-of-pocket would be a daunting challenge for most drivers. Checking with your insurance provider to see if your current policy provides you with rental-car coverage is a wise decision prior to renting. The rental company will also offer an insurance package to provide coverage during the rental period.
Do I need collision insurance if my car is paid off?
Prior to paying your vehicle off, your lender may require you have collision insurance. Once you’ve paid it off, it becomes your choice. The value of your vehicle will be the key factor in determining whether collision insurance is warranted. A newer and/or higher-valued vehicle could incur significant repair or replacement costs if you are involved in an accident. It would be best to talk to your local insurance agent to assess whether collision insurance is a cost-effective option for you.
If I don’t have collision coverage am I still covered if someone hits me?
Assuming you are not considered to be at fault for an accident, you would have coverage for repairs. However, in the case of a hit-and-run, you would need to have collision insurance to be covered.
Let’s discuss whether collision insurance is right for you.
We would be happy to discuss your current situation and determine whether collision insurance makes sense. Give us a call at 1-800-516-6275, or book an appointment with one of our experienced insurance agents, and we will ensure you have the right amount of coverage for your needs.