What is Comprehensive Insurance in Canada?

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In the event of an unforeseeable tragedy, such as illness, injury, disability, or even death, your family can be faced with tremendous emotional stress and financial hardship.

Buying insurance is something every one of us has heard about before – for life, health, even starting a new business, or buying a new car.

Unfortunately, we often neglect to buy insurance, thinking that we don’t need it because we are in good health or adequate drivers. Contrary to some beliefs, insurance is vital regardless of our health, financial situation, or level of driving proficiency.

Essentially, insurance acts as a safety net that protects you and your family financially should something disastrous happen. This article will discuss what comprehensive insurance is, what it doesn’t cover, the necessity of it, and how to file a comprehensive insurance claim.

What is Comprehensive Insurance?

An insurance policy that provides coverage for certain damages to your car that are not due to a collision with another vehicle is called comprehensive insurance. An automobile policy that offers comprehensive coverage is additional, which means it can be added as an optional protection.

However, if you are leasing or financing your vehicle, then comprehensive insurance will be required. In any case, the best way to get the maximum protection is to combine comprehensive coverage with liability and collision coverage.

Comprehensive insurance provides coverage when your vehicle is involved in an accident with a third party. Here are several examples to consider that would be covered under comprehensive insurance:

  • Your vehicle is spray painted or vandalized
  • Your vehicle is stolen and then recovered
  • You hit an animal while driving
  • A tree falls on top of your car after it is struck by lightning
  • A fire, hailstorm or tornado destroys your vehicle

A comprehensive insurance policy covers the entire vehicle in the event of theft, natural disasters, or any incident that is out of your control. For example, comprehensive insurance will cover damages caused by a rogue shopping cart in a parking lot on a windy day.

In many cases, a comprehensive insurance policy is just as important as collision coverage when your vehicle has been damaged and you need help fixing or replacing it.

Another example where one might need comprehensive insurance could be; you notice your windshield is damaged because of hail when you leave for work one morning. You imagine that all windshield damage is covered by your minimum insurance policy, right? Wrong.

In the case of hail damage, you would need comprehensive insurance coverage on the vehicle before the incident occurred. On the other hand, if your windshield was broken during a traffic accident, depending on who is at fault either your collision insurance or the other driver’s insurance would cover the damage.

Your windshield can be damaged in many ways and this is a good argument for getting both comprehensive and collision insurance on your vehicle.

What is not covered under comprehensive insurance?

You are not reimbursed for everything that is beyond your control with comprehensive coverage. It is possible, for instance, if you were not at fault, that your claim would be handled by direct compensation property damage (DCPC) in provinces where this is allowed or by third-party liability insurance.

It’s also important to keep in mind that comprehensive insurance covers only vehicle-related costs, so an accident claim won’t cover any medical expenses. It is imperative to remember that this coverage applies only to your own vehicle on the policy and not to someone else’s.

As part of your overall insurance package, comprehensive insurance compliments collision insurance perfectly to protect you from some of the scenarios mentioned above. 

Comprehensive vs. Collision insurance

There are a few differences between collision and comprehensive coverage that you should be aware of before purchasing either option. Collision insurance covers if your vehicle gets in an accident, whereas comprehensive covers non-collision related factors such as hail, storms, fires, and theft. For complete coverage from accidents, you would want to get both collision and comprehensive.

It is possible to opt out of collision insurance coverage, but it works in conjunction with comprehensive coverage. For example, some people may not cover their cars for collisions.

By not paying collision insurance, you can save money when the cost of your collision policy is 10% or more of the car’s value. So let’s say, for example, your vehicle is only worth $40000, you’ll save money if you cancel collision insurance, but you will not be covered in the event of an accident.

However, if you opt for comprehensive insurance and something happens like theft, you will be covered. It is crucial to know the difference between comprehensive and collision insurance to make informed decisions regarding your coverage.

Is comprehensive insurance necessary?

While comprehensive insurance isn’t mandatory, it is recommended. It is easy for vehicles to accumulate damage. For example, estimates for hail damage can easily be in the thousands.

Whether the damage is to fix a small dent in the bumper or replace a whole windshield it can be costly. Often, people find that although they plan for unexpected expenses, it isn’t always possible to budget for them; comprehensive coverage for those scenarios can enable you to pay only your deductible.

Depending on the neighborhood you live in, your risk of theft and damage can vary considerably. At the same time, regional weather conditions may also determine whether you’re at a higher risk of damage. 

Insurance companies typically encourage drivers to maintain full coverage for their vehicles. Liability insurance, collision insurance, comprehensive insurance, and personal injury protection are some of the types of coverages available.

What do you need to file a claim?

If you need to make a claim, start by calling your insurance provider and speaking with an agent. The following information should be provided, if available:

  • Reports of damage
  • Images and/or videos
  • Relevant contact information of those involved
  • Time and date of the accident
  • Reports from the police 

If you have to file a claim, the insurance company will guide you through the process. There will usually be an adjuster assigned to the case, and any damages to your property will need to be assessed.

For repairs, your deductible will be taken from the amount of your claim and the difference will be reimbursed by the insurance company if you are approved. 

All in all, you never know when an accident is going to occur. But having comprehensive coverage can make dealing with unexpected things a bit easier and ease the financial burdens associated with the damages.

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.