Am I Covered? Auto Insurance 101

Every policy is different but there are some common situations to be aware of.  Ask your broker for more information about liability and how to obtain the right level of coverage.

Your vehicle insurance policy likely has some flexibility built in to ensure you are covered in different situations.  You should check your policy or ask your broker to be sure.

Renting a Car

If you drive a rented car or any vehicle that is not owned by you, your existing policy automatically extends accident benefits and third party liability coverage to your rented car.  These limits are the same as those on your own car.  You can purchase additional coverage by way of an annual endorsement of your own policy that provides physical damage insurance for any rented vehicle during the policy term.  It is important to note that this endorsement usually has a limit of $50, 000. So, if you rent a luxury car, you should be aware that the costs of repairs are limited.  This endorsement is simple to arrange and far more economical than the costly damage waivers offered by the rental companies.

Traveling outside the province or country

Your insurance will apply if you take your car on short trips to other provinces or into the continental U.S., as long as you engage in normal use of the vehicle.

Moving to another province

If you are relocated long-term or permanently, you must inform your insurer and arrange for new coverage that reflects the risks in your new location.

When the car is “in the shop”

Under most insurance policies, you are not entitled to a replacement vehicle while your car is in the shop for normal maintenance or repair.  IF you lose the use of your car because of an accident, then you might be entitled to a loaned vehicle depending on the situation.

When driving someone else’s car

If you borrow someone else’s car you are covered by the insurance on that car. However, if you are involved in an accident, the owner’s record, not yours, will be affected.  If you narrow a car on a regular basis, ask your broker to arrange a special clause in your policy to cover your use.

When someone else drives your car

Remember that when someone else is driving your car, you are still responsible for it.  Any at-fault accidents or claims will go onto your driving record and affect your future premiums.

Don’t guess… If you are not sure about your coverage, it’s better to give your broker a quick call than to guess.  Remember, if you’re not covered and an accident occurs, the insurer is not obliged to pay.

As always feel free to give us a call, email or stop by our office to chat with one of our brokers!