What is included in full coverage auto insurance?

If you recently purchased a new car or one that is considered a luxury vehicle, the minimum required coverage for car insurance may not be enough. This is where full coverage car insurance comes into play. To learn more about what's included in full coverage car insurance, stick around to find out!

What is full coverage car insurance?

All drivers in Canada require car insurance coverage. Depending on the province or territory you live in, the minimum coverage required will vary, but all include basic liability coverage (includes property damage, liability coverage, and bodily injury liability), underinsured and uninsured motorist insurance, accident benefits coverage, and direct compensation property damage coverage.

While basic coverage can work for many drivers, others prefer to have full coverage insurance. While there is no insurance policy called “full coverage,” most policyholders will use this to refer to all the mandatory coverage types mentioned above in addition to several optional coverages, specifically collision and comprehensive coverage, which offers further financial protection. As a refresher, here's what collision and comprehensive coverage entails:

Comprehensive coverage

Comprehensive coverage will pay to repair damage to your vehicle that is caused by an insured peril. You can choose which perils to include in your policy, including theft or attempted theft, lightning, vandalism, flooding, earthquakes, hurricanes, fires, a riot, explosion, falling objects, hail, windstorms, falling or forced landing of an aircraft, and more.

You may choose to include some of these perils, known as specified perils coverage, or all of these perils, known as all perils coverage, with your comprehensive insurance.

Collision coverage

If you get into an accident with another car or object on the road, no matter who is at fault for the accident, collision coverage can help cover the costs. Under the collision coverage portion of your car insurance policy, you can be reimbursed for the costs of property damage that resulted from an accident, including the repair of your damaged vehicle.

Other optional coverage

Beyond collision and comprehensive coverage, there are other additional coverages available to add to your overall car insurance policy, including the following:

Accident forgiveness

Accident forgiveness is an add-on that can be purchased with any car insurance policy in Canada. This type of coverage is often recommended for new drivers or those who are high-risk, as it prevents the insurance company from raising your rate after your first at-fault accident.

Waiver of depreciation

A waiver of depreciation is an add-on designed for leased or financed vehicles that are financed through a loan. Waivers of depreciation coverage pays the entire replacement value of the car with no depreciation for up to 24 months, however some companies will extend this up to 36 months.

Loss of vehicle use

One final add-on available to motorists in Canada is loss of vehicle use. This auto insurance policy can help cover vehicle accommodation expenses in the event your car is out of commission due to an insured risk or peril. This can cover public transit, the cost of Uber or a rented vehicle during the time that your vehicle is out of commission.

What does full coverage not cover?

In most scenarios, collision and comprehensive insurance will not provide coverage for the following:

• Damage to your vehicle that is caused by street racing or off-road driving.
• If you use your car for car-sharing purposes.
• Damage caused to your vehicle that is intentional.
• If your car gets damaged or impounded by law enforcement.
• Natural disasters or catastrophes.
• Using a vehicle for business use.

To get a full list of what your car insurance coverage will not cover, we suggest reaching out to your coverage provider and asking for the terms and conditions listed in your insurance documents.

Who needs a full coverage policy?

Full coverage car insurance offers numerous benefits, but it's not for everyone. Here is who may want to purchase full coverage auto insurance in Canada:

You own an expensive or new vehicle

Those who have new, expensive, or financed cars should seriously consider purchasing more than the minimum coverage mandated by law.

Cars on an auto loan or lease

If you have financing or lease your vehicle, you'll likely be required to purchase comprehensive and collision insurance as a condition of the agreement.

You live and drive in high-risk areas

Comprehensive and collision insurance add-ons are highly recommended for urban areas with high crime rates or severe weather conditions.

Drivers who use their cars everyday

Full coverage ensures that you can get quick repairs or replacements following a car accident if you use your vehicle every day and for important tasks.

You want peace of mind

If you want that added peace of mind, knowing that you are protected against unanticipated accidents, full collision coverage, and comprehensive car insurance are a must.

A young or inexperienced driver

Young or inexperienced drivers will undoubtedly benefit from full coverage due to a higher likelihood of accidents.

Drivers with longer commutes

If you have a long daily commute, comprehensive collision coverage is a great idea, given that you may be stopping frequently along the way to your destination.

What is the difference between full coverage and comprehensive insurance?

Full coverage incorporates different auto insurance policies, including auto liability coverage (property damage liability and bodily injury liability), uninsured motorist coverage, underinsured motorist coverage, and comprehensive and collision coverage.

In contrast, comprehensive insurance is a specific policy within full coverage that focuses on reimbursing the policyholder if their car is damaged by an insured event other than a collision. For example, if a tree falls on your car when you're parked at your friend's house, comprehensive insurance will reimburse you.

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How much does full coverage car insurance cost?

The cost of full coverage car insurance really depends on numerous factors, including the following:

• Where you live (and work - if you drive to work)
• Age
• Make and model of vehicle
• Driving record
• Driving experience
• Past claims
• Annual mileage
• Prior insurance coverage
• Marital status
• Your deductible(s)
• Local laws
• How you use your vehicle

While it’s impossible to provide an exact estimate on the cost of standard car insurance and full coverage auto insurance in Canada, you can expect full coverage insurance to be more expensive. This is due to the fact that full coverage auto insurance offers a much higher degree of protection than standard car insurance.

Why you should purchase full coverage car insurance in Canada

If you're unsure whether full coverage is right for you, take a look at some of the benefits this type of insurance offers:

1. Comprehensive protection when on and off the road: Full coverage is a great way to ensure your interests and vehicle are protected against unexpected risks.
2. Financial security: Repairing or replacing your car following an insurance claim can be very costly. Full coverage reduces these expenses, ensuring your finances remain protected.
3. Peace of mind: If you live in an area with high rates of theft, vandalism, or severe weather conditions, having this type of insurance policy can give you peace of mind.

What are the disadvantages of full coverage?

While this insurance offers numerous benefits, there are some aspects of the coverage that people may not like. Here are some potential drawbacks:

• For full coverage, you will need to spend more money than you would if you were buying a basic plan, which isn't doable for some people.
• Depending on your insurance company, you may be asked to purchase a higher deductible and coverage limits with this type of policy, which, again, will cost more than a regular plan.

If you're unsure whether full coverage is right for you, reach out to your insurance company directly for more information about the options available to you.

How to make full coverage auto insurance more affordable

At BrokerLink, we think that full coverage auto insurance should be affordable for all Canadians. Check out some of our best tips and tricks on how you can make your full-coverage car insurance more affordable moving forward:

Bundle your auto insurance coverage

Bundling your insurance coverage with the same insurance company is a great way to save money on your premiums. Most auto insurance companies offer discounts to customers who purchase various coverage options from them, and as a thanks, will reduce your premium. So, if you have home insurance, health insurance, or any other type of coverage, ask your insurance company about bundling your policies the next time you're up for a renewal.

Increase your deductible

To save money on your full coverage auto insurance, consider increasing the deductible. As you should know, the deductible is the amount you need to pay out of pocket in the event of an insurance claim before your provider will cover the rest.

The average car insurance deductible in Canada is $500. By increasing your deductible to $1,000 or more, you could save money on your full coverage auto insurance policy. Just keep in mind that it isn't the best idea for all motorists. Only those who can comfortably afford to pay for a more expensive deductible should a claim be filed should consider this option.

Pay for your full coverage insurance annually instead of monthly

If you can, consider paying for your full coverage car insurance upfront rather than on a monthly basis. Monthly or quarterly instalments on auto insurance usually come with administrative fees, which will increase the cost of each payment. Therefore, by paying for an entire year's worth of full coverage, you may be able to get a bit of a discount on your premium.

Ask about discounts

Your car insurance company likely offers a variety of insurance discounts for several scenarios. For example, some common discounts include completing a safe driving course, installing security features on your vehicle, being a member of a professional organization, and more. Next time you're up for renewal, make sure to ask about whether you qualify for any discounts!

Install safety devices on your vehicle

If you have safety features installed on your vehicle, such as anti-burglary alarms, dash cams, and other features that make your car safer to drive, your company may be able to offer some sort of discount to you as well.

Put snow tires on your car

Live in a part of Canada that experiences heavy snowfall throughout the year? Have snow tires installed on your own car to save up to 5% on your car insurance premium. Snow tires can mitigate the risks of driving in the winter, which can significantly reduce the risk of you getting into a car accident when it's icy and cold outside.

Work with an insurance broker

Working with an insurance broker rather than directly with an insurance provider can offer numerous benefits. Reputable brokerages like BrokerLink are experts in car insurance. We will take the time to understand your needs and budget before finding the best coverage at the lowest possible rate.

We can unlock discounts on your behalf, make you aware of rebates you didn’t know you were eligible for, help you shop around for policies from different types of insurance providers, and more.

Buy insurance with BrokerLink today!

Do you need full coverage car insurance? We've got you covered. With years of experience in the insurance industry, BrokerLink can help you get auto insurance at an affordable cost without sacrificing your level of coverage. We've got locations across Canada, so if we're in your neighbourhood, please feel free to come visit us in the office to work with one of our brokers face-to-face.

If you can't make it in, you can also reach out to us over the phone during our regular business hours. If you're looking for competitive insurance quotes in minutes, check out our online quote tool to get customized coverage tailored to your unique insurance needs!

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