Can Collision Insurance Protect Your Wallet on Canada’s Roads?
Did you know that in Canada, more than 1500 vehicle collisions are reported each year?
With such a rise in accidents, the question is: how can you ensure your financial security behind the wheel? The answer is collision insurance!
As the wise proverb goes, “Prevention is better than cure”, this insurance acts as a proactive step to reduce financial troubles. From slippery winter roads in Quebec to bustling city streets in Toronto, it can save grace in dire situations.
Let’s explore how collision auto insurance can prevent emptying your wallets!
How Much is the Social Cost of Collisions in Canada (2020 Statistics)?
The graph illustrates how much money society spends because of vehicle crashes in Canada. On the vertical axis, it lists the different parts of the total cost caused by collisions. The horizontal axis shows the percentage each part contributes to the overall total cost to society.
For more information, click here!
It’s clear that most of the costs from vehicle crashes come from fatalities (44.01%), then injuries (37.58%), and property damage (11.11%). Other costs involve health care, traffic delays, and out-of-pocket expenses.
What’s Collision Insurance and How Does It Work in Canada?
Definition: Collision insurance is like a safety net for your vehicle. It is a type of auto insurance that covers the cost of repairing or replacing your vehicle if it’s damaged in an accident.
Unlike other types of insurance that cover damage to other people’s property, collision auto insurance covers the cost of fixing your own vehicle, even if the accident is your fault. You pay a little bit of money, called a deductible, and the insurance company covers the rest of the repair costs.
Functioning: Let’s understand the functioning of collision auto insurance with an example!
Mr. Williams is driving down the road in Toronto, and suddenly, another car runs a red light and crashes into his vehicle. As a result, his car sustains significant damage to the front bumper. Without collision insurance, he would be responsible for paying for the repairs or replacement of his vehicle out of pocket.
However, if he has collision auto insurance, his insurance company will step in to cover these costs, minus his deductible. The ‘deductible’ is the cost you agree to pay before your insurance starts working.
For example, let’s say Mr. Williams has a $1000 deductible and the cost of repairing his car is $3,000. In this case, he would pay $1000, and his insurance company would cover the remaining $2000.
How is Collision Insurance Different from Collision Damage Waiver Insurance (CWD)?
CDW insurance coverage is offered by rental car companies. It relieves the renter from the financial burden of rental car damage or theft.
On the other hand, collision auto insurance pays for the damage to your vehicle in collisions, regardless of fault. While both cover collision damages, collision damage waiver insurance is specific to rentals and many do not cover all situations.
How Can a Collision Insurance Save Your Money?
Collision insurance can be the best way to protect your wallet from big bills if your vehicle gets banged up on the road. It can help you save money in the following three major ways:
Let’s discuss them one by one!
- Providing Financial Protection: The insurance offers financial protection in the following ways:
a) Minimal Out-of-Pocket-Expenses: If you do not have the insurance, you will be responsible for paying out of pocket to repair or replace your vehicle. However, collision insurance steps in to cover these costs, reducing your financial burden.
b) Vehicle Damage Cover: It offers extended coverage to a variety of accidents, including rear-end collisions, side impacts, and single-vehicle accidents. However, in case of collision damage waiver insurance, the rental vehicle may be covered for theft or even vandalism.
c) No-Fault Protection: Unlike liability insurance, which only covers new vehicles and property damage if you are at fault, collision auto insurance covers damage to your vehicle regardless of fault. This means that if you are involved in a collision that isn’t your fault, the insurance can still help cover the cost of repairs to your vehicle.
d) Deductible Options: The insurance allows you to choose your deductible, which is the amount you agree to pay from your own pocket before your insurance coverage kicks in. If you choose a higher deductible, you can reduce your insurance premium. This makes your insurance more affordable and you can save money in the long run.
- Helps in Long-Term Savings: The insurance also helps you to save significant money in the long run through the following ways:
a) Avoiding Future Costs: Investing in collision auto insurance can help you avoid future costs related to vehicle damage. By dealing with damage quickly and appropriately, the insurance can prevent minor issues from becoming major problems, saving money on potential repairs.
b) Vehicle Value Protection: Vehicles damaged in a collision and repaired without proper insurance may have a lower resale value and increased repair costs in the future. But by taking out collision insurance, you can ensure that your car is maintained to the highest standard. This maintains its value and reduces the likelihood of future repairs and maintenance issues.
- Offers Peace of Mind: The insurance also offers peace of mind to its owners because of the following reasons:
a) Financially Protected: Knowing that you are financially protected in the event of an accident gives you peace of mind. Whether it’s a minor bend or a severe collision, insurance can help alleviate the financial stress of sudden vehicle damages. This sense of financial protection can also be gained from CDW insurance coverage.
b) Quick Recovery: It also helps with quick repairs or replacement, allowing you to get back on the road sooner. This fast recovery allows the person to resume their daily activities seamlessly, reducing inconvenience.
c) Less Disruptions: Not having a car for safety reasons can disrupt your daily routine. But with collision auto insurance, you can rest assured. It helps you to avoid expensive debts and allows you to have funds quickly to repair or replace your vehicle.
Closing Remarks: Can Collision Insurance Save Your Money?
In a nutshell, collision insurance isn’t just a safety net; it’s a lifeline for your wallet on Canada’s roads. It shields you against surprises and ensures quick recoveries, giving you peace of mind behind the wheel. So, before you hit the road, make sure you’re covered – because in driving, preparation pays off.
People Also Ask
FAQ: Will my collision insurance cover damages if my car is vandalized?
Answer: Unfortunately, it typically won’t cover vandalism damages. For that, you’d need comprehensive insurance.
FAQ: Does collision auto insurance cover animal attacks in Canada?
Answer: Most collision auto insurance policies in Canada cover animal collisions, but it can vary by provider. The coverage may apply if you hit a deceased animal, but it might be considered an at-fault collision, possibly affecting your premium.
FAQ: Will my insurance rates increase if I make a collision claim?
Answer: Yes, making a collision claim could lead to higher rates. However, this depends on various factors such as your driving history and your insurer’s policies.
FAQ: How much does a collision damage waiver insurance cost in Canada?
The daily cost of CDW insurance coverage in Canada ranges from $9.99 to $39.99.
FAQ: Is collision coverage mandatory in Canada?
Answer: Collision coverage is optional in Canada. However, it might be necessary if you lease your vehicle. Adding collision coverage will increase your premiums but opting for a higher deductible can lower your rates.
FAQ: Can I purchase collision insurance without comprehensive coverage?
Answer: Absolutely, you can get collision insurance as a standalone policy, without comprehensive coverage. However, it’s generally advised to have both for more comprehensive protection against different situations.
