5 things to know about car insurance

1. Civil liability is mandatory

In Quebec, as soon as you own a car, the law requires you to take out civil liability insurance. This type of insurance is referred to as Section A in insurance jargon.

What is civil liability?

Your legal obligation to repair any property damage or bodily injury you unintentionally cause. Without civil liability insurance, you will be required to pay substantial compensation and legal fees out of pocket.

Civil liability insurance covers:

• compensation and defence costs from a court ruling
• damage to the other vehicle when you are not at fault.

You should take out $1 million in civil liability coverage. However, if you drive outside the province of Quebec, it's recommended you increase this amount to $2 million.

2. You can insure your car “two ways” by adding optional coverages

You can choose various Section B coverage options.

Section B1 – All perils. This covers all property damage to your vehicle, except what is specifically excluded from your policy.

Section B2 – Collision or upset. This covers property damage to your vehicle, resulting from a collision for which you are at fault, specifically:

• a roll-over accident
• a collision with another vehicle, the ground or an object, or a person or animal
• a hit-and-run

If you want to add this coverage, you must bundle it with B3 comprehensive (fire, theft and vandalism) or B4 specified perils coverage.

Section B3 – Comprehensive. This is better known as fire, theft and vandalism coverage and covers damage caused by:

• fire
• theft and vandalism
• glass breakage
• flooding, windstorms, hail, lightning or earthquakes
• riots or civil commotion
• flying or falling objects

It can be taken out separately or bundled with B2 collision and upset coverage.

Section B4 – Specified perils. This covers only the risks specified in the policy, and doesn’t include collisions, for example. The main risks covered are:

• Fire
• lightning
• theft
• flooding, windstorms, hail, lightning or earthquakes
• riots or civil commotion

It can be taken out separately or bundled with B2 collision and upset coverage.

3. Property damage may be mandatory

If your car is leased or financed, your creditor or lessor will require that your car be covered for collision and upset (B2), as well as for fire, theft and vandalism (B3).

4.Additional coverage

Depending on your needs and preferences, you may opt for one or more additional coverages. Two of the most popular endorsements are:

Replacement Cost (Q.E.F. No. 43A-E). If your new vehicle is a total loss, you will be able to decide whether to replace the vehicle or receive compensation. If your vehicle is a partial loss, damaged parts that cannot be repaired are replaced by new, genuine parts.If you insure a new vehicle and you want to protect your investment, this coverage is for you. If your new vehicle is a total loss, you have the choice of replacing it or receiving compensation. If your new vehicle is a partial loss, damaged parts that cannot be repaired are replaced by new, original parts.

Borrowed or short-term rental vehicle (Q.E.F. No. 4-27a), Civil liability resulting from damage to non-owned automobiles, excluding vehicles provided by an employer). This endorsement extends coverage under Section A (civil liability) for damage caused to or the disappearance of the non-owned vehicle (including equipment and accessories).

5. Customizing your insurance

You can always customize the deductible and coverage options to your needs and the level of risk that you are comfortable with.

What is a deductible?

The deductible is the portion of the claim that the insurer does not pay.

A higher deductible means a lower premium. You are paying more up front to pay less in the event of a claim. Conversely, a lower deductible means a higher premiums. You are paying less up front, but will have to pay more in the event of a claim.

If you have questions or need advice about car insurance? Talk to your insurer: it's their job to help you understand your coverage options and recommend what is best for you.