Here’s some basic information about auto insurance to help you choose the coverage that’s right for you.

Standard coverage

First of all, you’re not allowed to drive without mandatory standard insurance coverage: Third Party Liablility, Accident Benefits, Uninsured Automobile Coverage and Direct Compensation Property Damage. If you’re caught without it, you could be fined or possibly lose you licence. In addition, if you’re at fault for an accident that causes damage to someone’s personal property or causes an injury of fatality, you could face a hefty bill.

There are two other standard coverages that insure damage to your vehicle : Collision or Upset and Comprehensive.

Optional coverage

Beyond standard mandatory coverage, you can select optional coverage options, depending on your situation and the type of car you have.

Ask yourself the following questions to determine the coverage that’s right for you.

Are you buying or leasing the car?

If your car is leased or financed, your leasing company will usually require that you add two basic coverages:

• Collision or Upset covers you if your car hits another object, or if your car rolls over or gets hit by an object. Without Collision coverage, if you’re entirely at fault in an automobile accident, your vehicle repairs are not covered.
• Comprehensive covers you if your car is stolen, vandalized, damaged by fire, or if windows are broken or cracked.

How old is the car?

If it’s less than five years old, you may want to add  5-Year New Vehicle Protection coverage. In the event that your vehicle is stolen (and not recovered) or written off in an accident, this coverage will waive the depreciation for up to two years.

If you own a car that is more than 10 years old, you may consider not including Collision or Upset and Comprehensive coverage. Your vehicle may not be worth much more than the premium charged for each coverage. It depends on how comfortable you are with paying for these damages yourself.

On the other hand, if your car is less than 10 years old, you may want to include both Collision or Upset and Comprehensive to cover the much-higher costs of repairing or replacing a newer vehicle. Depending on the age of the vehicle, you may choose to increase the deductible from $250 to $500 or more. Higher deductibles will help reduce your premium.

Do you often rent or borrow vehicles?

Liability for Damage to Non-owned Automobiles coverage protects you if you damage a private passenger vehicle or trailer that you rent or borrow anywhere in Canada or the United States. Depending on what kind of vehicle you are renting for personal use, this means you may not have to pay extra for the rental agency’s insurance.

Would you have alternative transportation if your car was damaged badly?

The Transportation Replacement option pays for a car rental, taxi or public transit when your car is in the shop because of a loss or damage that is covered by your insurance. It makes the whole inconvenient experience of being in an accident just a little more bearable.

What kind of items do you keep in your car?

Did you know that the only items that are covered under your auto policy are those permanently attached to your vehicle, like your car stereo? Any other items that are stolen from your car, like your CD collection, laptop, sports equipment, or cell phone, are covered under your home insurance. This means that if you don’t have home insurance, anything that’s not considered part of your vehicle isn’t covered.

To get an idea of the coverage you want and the cost, you can get a quote and then add or remove optional coverage and change deductible amounts to see how they affect your insurance premium.  However, make sure your quote includes all of the coverage you need. Take note of what coverage is included in the insurance premium so that you can more accurately compare quotes from different insurers.