Affordable Comprehensive Insurance Quotes

Are you still financing your car or are you leasing it? If you’re leasing it, your lender may require you to purchase comprehensive insurance coverage. If the car fully belongs to you, having some type of auto insurance is necessary to protect you from unexpected financial expenses, but purchasing comprehensive insurance is a matter of choice. 

In Canada, one of the many product considerations in the insurance marketplace is whether to buy comprehensive insurance. Whereas collision coverage comes into play because a driver gets into a car accident, comprehensive is a separate from collision. It helps cover different types of losses that are usually not the result of driving the vehicle.

Getting an insurance quote can help you save some money, but shopping for a reputable insurer can be daunting, especially when you don’t know what exactly to look for. Lucky for you, the sages at MoneyWizard.ca have discussed all the essential considerations.

What Is Comprehensive Insurance?

Comprehensive insurance is coverage that helps you pay for car replacement or repairs in the event that your car is stolen or damaged. This auto insurance coverage is commonly referred to as “other than collision coverage.” Typically, comprehensive insurance covers damage caused by fire, vandalism, or falling objects like a tree branch or hailstones. 

If you are shopping for auto insurance or you’re carrying out a review of your current insurance policy, you should consider comprehensive insurance coverage. This type of insurance is recommended, as it will help protect you from unexpected and significant financial costs if your car is damaged or stolen. 

What Is the Difference Between Collision and Comprehensive Coverage?

Collision insurance is an auto insurance coverage that helps make payments for your car repairs in the event that it is damaged following a collision with another vehicle or an object like a power post. It would also cover damage if the car rolls over.

On the other hand, comprehensive insurance policies cover a variety of financial losses that are not necessarily a result of driving the vehicle. These may include losses resulting from theft, vandalism, or falling objects such as tree branches. Other covered incidents could include losses resulting from natural disasters, such as floods and fires, or damage by animals. 

In the event of a claim—both collision and comprehensive coverage generally include a deductible—the amount that you’re responsible for paying in the event of a claim. Your lender generally requires these types of coverage if you’re leasing or financing a car. Otherwise, depending on your location, they are not mandatory. It is important to note that neither options cover damage caused to another person’s vehicle or medical bills. 

How Much Does Comprehensive Insurance Cost in Canada?

The average car insurance policy in Canada is $1,320, but this varies across regions. For instance, according to the Insurance Bureau of Canada, BC has the highest rates, averaging $1,832 per annum. The next highest average rates are in Ontario and Alberta, at $1,505 and $1,316, respectively. Rates are lowest in Quebec, with an average annual rate of $717. Along with these regional differences, the cost of comprehensive insurance varies depending on your driving record, age, and other factors. 

What’s the Deal with Deductibles?

When purchasing comprehensive insurance coverage, you get to select a set deductible. This refers to the amount of money that you’ll pay out of pocket before your insurer pays the rest of the claim. For instance, you may choose a deductible of $700. Should your car be vandalized during elections and the total amount needed for repairs is $1,800, you will be required to pay the $700 deductible, while the balance of $1,100 will be covered by your insurance company. 

Did you know that comprehensive coverage has a limit? A limit is the maximum amount that your policy will pay in response to a covered claim. Typically, the limit is the actual cash value of the car. For instance, if your car is stolen, your insurance company will reimburse you for your car’s depreciated value, minus your deductible. This means that the amount you receive from the insurance company may be less than the cost of buying a replacement vehicle. It is also important to note that your comprehensive policy’s deductible and its limit are separate from your collision policy’s deductible and limit. 

How Do You Choose your Comprehensive Coverage Deductible? 

Your insurer will offer comprehensive deductible amounts in set increments, for example $500, $1000, or $1,500. If you choose a higher comprehensive deductible, your premiums will be lower. This will help you to save some money upfront, but you might have to pay more out of pocket should the need for a claim arise. 

Conversely, choosing a lower comprehensive deductible means paying higher premiums for your insurance coverage. But, in the event of a claim, you may have to pay less out of pocket to cover repairs. It is always a good idea to discuss the different options with your agent so you can choose the deductible and limits that fit your specific needs. 

Is Comprehensive Car Insurance Worth It?

If you are leasing or financing your car, the lender is likely to require you buy comprehensive car insurance until you have fully paid off the car. Once your car is paid off, comprehensive coverage becomes optional. Even so, you should evaluate your finances and determine if you would be able to comfortably pay for repairs in case of damages or be able to replace your car if it is stolen. If not, then purchasing comprehensive car insurance may be your best bet. 

Deciding whether to purchase comprehensive coverage can also be based on the value of your car. An advisory from the Insurance Information Institute recommends that you take the amount you would pay in one year for comprehensive and collision coverage and multiply it by 10. If the value of your car is less than that number, then purchasing comprehensive or collision coverage for your vehicle might not be cost-effective. Once again, your insurance agent will give you the details that will help you determine whether comprehensive coverage is worth getting when deciding your car insurance policy.

When Should You Consider Dropping Comprehensive Coverage?

For a long time, the decision on whether to drop comprehensive coverage was pegged to the age and mileage of a car. If the car was five to six years old or when the mileage hit the 100,000 mark, then it was advisable that you drop the coverage. This often still holds true today. It would likely be cost-effective to drop either comprehensive or collision coverage, or both, if your car is old and has depreciated significantly in value but can still be on the road. This is because the maximum payout that you will fetch, which is the value of the car minus your deductible amount, will be extremely low and will not be worth the cost of the insurance over time.

The decision to drop comprehensive coverage can also be made based on the value of the car and the cost of replacement parts. An expensive vehicle might justify the cost of comprehensive and collision coverage for a number of years, as replacement parts could be so expensive that they exceed the deductible. This has become more common as technology has evolved and cars have become not just cars, but computers as well. 

If you own a classic or vintage car, there may be other considerations. Typically, there is classic car insurance for these types of cars, where the policies are based on the car’s “agreed value” rather than on depreciation. This value may be based on the car’s condition or the price of the special-order parts needed for its repairs. As such, your insurer will base their value determinations on the agreed value of the car and the average cost of replacement parts in the current marketplace. 

In all these scenarios, it is important to note that the value of your car may not be what you consider it to be. Computing its value in order to decide whether to drop comprehensive coverage should be done from the perspective of your insurer. For instance, if an accident totals your car, the insurance company will reimburse the actual cash value of the car, which is comparable to the wholesale price at auction and not the sticker price that appears on a dealer’s lot. Oftentimes, the determined prices are lower than the resale value of the car.

Insurers generally sell comprehensive and collision coverage as a single package. However, in the event that you have both the collision and comprehensive coverage, you might want to consider dropping one. The general consensus is that comprehensive coverage is a better value than collision coverage, so if you must drop one, drop the collision coverage. But before you drop it, think about your replacement plan should you lose your car due to a collision accident. 

Conclusion

Comprehensive insurance may not cover you under every circumstance involving your car, but it will help protect you from huge expenses resulting from damages or losses related to vandalism, theft, and natural disasters. By investing a small amount now, you can avoid costly expenses in the future. A comprehensive insurance policy will cover the costs of expensive claims in the event of an accident. It will also save you the time and hassle of negotiating with other drivers when you’re involved in an accident. Considering these factors, comprehensive insurance will contribute to your peace of mind. Consider getting an affordable quote from us today.