More than 1,00,000 Canadians are injured in car accidents every year, around 1% of which prove to be fatal. Although the number might not sound like a lot, this is definitely not a chance you would want to take. Thus, it is always best to get some form of car insurance before you hit the road.
In this article, we would be throwing light on the four main reasons why you should get car insurance right away. Some types of insurance are not mandatory, whereas others are required by the law. We will help you understand why this is the case. Stick around to find out!
In case you want to explore on your own, feel free to visit Surex and inform yourself!
Minimum Mandatory Insurance
The majority of the countries set the minimum mandatory insurance coverage for your automobile. This is the type of insurance that you need to get to keep yourself and others protected. You would need to get this regardless of the type of model you are driving, the region you belong to, and any other factors.
The most common mandatory insurance is the Third-Party Liability Coverage. If you are involved in an accident, and if somebody else or their property is damaged, this type of coverage will make up for it.
According to the Financial Services Commission of Ontario (FSCO), you need to carry a minimum of $200,000 in Third-Party Liability coverage, which is required by law and cannot be avoided.
Why Is Car Insurance Mandatory?
Now that we have established that having car insurance is of great importance and to an extent legally required, we are going to list several reasons why this is the case:
Car accidents usually involve other people’s property as well. Depending upon the intensity of the accident, the expenses can be high enough to cause a significant financial drain.
With mandatory car insurance, this will no longer be a problem for you. You will get financial protection, as in you will not have to pay for the damage from your own pocket. The insurance company will cover the costs for you.
However, if you only get Third-Party Liability Coverage, you need to know that this does not cover your damage or medical bills. It rather covers these things for the other party.
Stress-Free after the Accident
All drivers like to believe that nothing bad will happen when they are driving. However, accidents occur quite often. Everybody wants to feel safe on the road. If something does happen out of no fault of your own, you’d like to know that you will not be the one to pay for the costs.
Put yourself in a situation where somebody is at fault for crashing into your car. Nobody dies, but you still have to get your vehicle fixed. This is when the other person’s insurance comes in. It immediately makes you feel safer, knowing that you do not have to worry about money and the stress you underwent.
Insurance Premiums are Tax Deductible
When it comes to the tax return and insurance, there are particular instances when you might be eligible to get some money back. If you are using your car for private purposes such as running errands, your insurance will not be tax-deductible.
However, if you are using your vehicle for business, you might be able to get a tax return. This happens, for example, if you are self-employed and you use your car as a delivery vehicle, or if you work for someone else and they do not pay car-related expenses.
Another instance where you might claim your auto insurance premium on the tax return is if your car has been stolen in recent months. Theft is not considered your fault, which is why you might find this option quite useful.
Protects Company’s Interests if the Vehicle Is Not Paid Off
Sometimes the vehicle you are driving is not yours because you have not yet paid it off. You might be paying in installments, leasing it, or driving a rental car. No matter which of these options is correct, the companies that own these cars have to protect their interests.
Usually, the mandatory insurance for these cars is not only Liability but Comprehensive or Collision Coverage as well. This is so because the company does not want to go through any loss that will not be compensated. It is only fair that we provide them with some kind of warranty.
What are Other Types of Coverage?
Third-Party Liability is obligatory coverage, but this does not mean you cannot get something that protects you and your property as well. There are many other types of coverage you should check out. We are going to explain two of the most commonly used options:
If you are at fault, unlike with Liability coverage, collision coverage will cover your costs as well. The insurance company is going to fix or replace your vehicle simply because you paid for this insurance beforehand.
This is quite similar to Collision, but it covers damages that occur for reasons other than the driver’s fault. For example, if somebody steals your car or something from your vehicle, the insurance company would cover the costs of the same
Is There Maximum Coverage?
Insurance is something that provides coverage against the uncertain future. However, how much coverage does a man require?
Keep in mind that there is also a maximum coverage in Ontario, determined by the law. This means that the most you can get at the same time are Liability, Comprehensive, and Collision insurance.
Either way, do not worry because this is more than enough to cover your damages. This covers other parties, your damages, and possible robberies or natural disasters.
We can conclude that there are several types of coverage, but not all of them are mandatory. The main reason for obligatory insurance is that the person who is not at fault does not have to pay for the damage.
Make sure to follow the law, and get your car insurance right away!