Icy roads. Busy highways. Distracted drivers. Outright accidents.
These are all great reasons why you need to consider collision coverage. Your standard car insurance policy will cover you with accident benefits when you’re injured, and third-party liability insurance will cover the cost of being sued, but what about repairs to your own vehicle? Who pays that bill?
“In 2018, 67,580 vehicles in Ontario were involved in Fatal and Personal Injury Collisions.”
Based on these numbers, there were, on average, 185 accidents per day in Ontario during 2018. If you have the financial security to cover repairs and other costs out-of-pocket, it may be less of a risk for you to not have collision coverage.
For most of us, however, it’s just not a risk worth taking. Cars are just too expensive to replace with out-of-pocket funds.
Collision coverage is a type of auto insurance that covers the cost of your repair bills if you damage your vehicle in an accident by hitting an object or another car. The amount of coverage you have will depend on the coverage limits set in your policy, but take comfort knowing that many policies with collision coverage will cover you no matter who was at fault. If you weren’t at fault, then you’d be covered under “direct compensation property damage” included in your auto policy.
What kind of objects are we talking about?
Remember, collision coverage is specifically for damage to your insured vehicle. If you or your passenger(s) are injured in the accident, that would be covered under the accident benefits portion of your standard auto insurance policy.
Ontario requires drivers to obtain four types of auto insurance:, which count toward the 5 parts of an auto insurance policy (optional coverage being the fifth).
These are all part of any standard auto insurance policy regardless of collision coverage.
If you choose to add collision coverage to your auto insurance policy (which we highly recommend!) you’ll need to decide on two things:
Deductibles for collision coverage typically come in options of $500 and $1,000, but it’s possible to find higher deductibles. Your aha insurance agent can help you determine the right amount for your situation, but a few key factors to consider are:
Most of those factors dictate the deductible for a “normal” policy as well—that’s how car insurance works.
It’s important to note that collision coverage could be mandatory if you lease or finance your vehicle.
If you choose not to buy collision coverage, you’ll have to pay for all of the repairs to your vehicle out-of-pocket (in addition to other expenses, like a rental car). That could mean spending thousands of dollars that you did not plan to spend going towards one very expensive mistake.
Sometimes it might just be a scratch in the paint that needs to be buffed out, but consider the possibilities when it comes to day-to-day damage:
Those scenarios can happen to even the best drivers, which is why we encourage everyone to consider the cost of paying out of pocket compared to the cost of owning collision coverage.
While collision coverage is not one of the mandatory types of auto insurance in Ontario, we highly recommend that you have it for your protection and financial peace-of-mind. If you can answer “yes” to one or more of these questions, then you should give it honest consideration:
You probably don’t need collision insurance for an old car, since its value would be so diminished, but owners of newer cars and luxury vehicles could stand to lose a lot of money without it.
Collision and comprehensive coverage are both options you can add to your auto insurance policy, but what’s the difference?
Comprehensive coverage is also known as “other than collision coverage” because that’s what it covers, in a nutshell—a wide variety of known risks to your vehicle outside of events involving collisions.
Comprehensive coverage is meant for what we call “perils.” These include things like:
Evaluate your car’s worth to help you decide if collision coverage is right for you—and our team of trained brokers are always available to walk you through the decision by weighing the pros and cons with you.
Stay safe out there, friends!