Liability and other mandatory car insurance

Sometimes known as “first party insurance,” the “no fault” system has been instituted in several provinces in an effort to:

• Help control court costs when claims are disputed
• Provide prompt financial assistance for accident victims
• Stabilize insurance premiums

Under the “no fault” system, everyone involved in an accident submits a claim to their own insurance company. This means that if another person is at fault for an accident, you would still submit your claim to your own insurance company. Additionally, if you are not at fault but had to pay a deductible, your insurance company may seek to recover your deductible from the at-fault driver.

Every car insurance policy includes protection against third-party liability—and for good reason. Liability coverage, also called third-party or civil liability coverage, helps protect you financially if you or another driver on your policy are found legally liable for injuring someone or causing damage to another person’s property or automobile while operating a vehicle. In this type of situation, your insurance would pay any legitimate claims against you up to the limits of your liability coverage and also pay for expenses related to settling the claims.

While every province requires a certain amount of liability coverage, the minimum amount required is unlikely to be enough if the courts order you to pay a substantial amount of money in damages.

Tip: At RBC Insurance, we recommend that you purchase at least $1 million in coverage as a starting point. However, you many need more. Talk to an RBC Insurance Advisor for advice on the right amount for your situation.

Collision coverage helps pay for the cost of repairing or replacing your vehicle up to the actual cash value if it collides with another vehicle, the ground, or an object in or on the ground (such as a guard rail).

Comprehensive coverage helps pay for the cost of repairing or replacing your vehicle up to the actual cash value if it is damaged by unexpected situations such as falling or flying objects, vandalism, fire, theft or attempted theft, a natural disaster, or a riot or civil disturbance (but not collision).

Tip: Although collision and comprehensive coverage are optional by law, your vehicle’s leasing or financing company (if applicable) may require that you have it. We also recommend that you purchase both of these coverages unless your car is very old—and not worth more than a couple thousand dollars—or you can afford to pay out-of-pocket whatever amount might be required to repair or replace your vehicle.

In addition to collision and comprehensive coverage, which are recommended for most situations, there are two other coverages known as All Perils and Specified Perils.

• All Perils coverage includes the protections provided by both collision and comprehensive coverage and also insures your vehicle against loss or damage should it be stolen by someone living in your home or by someone you have hired to drive, service or repair your vehicle.
• Specified Perils coverage insures your vehicle against specific situations only (such as fire, theft or attempted theft, some natural disasters, riots or civil disturbances). In most cases, we do not recommend insuring your vehicle with just specified perils coverage.

Also called “riders,” endorsements are additional (sometimes optional) enhancements that allow you to customize your car insurance policy by increasing or even reducing the amount of insurance coverage you would receive in special situations.

One example of an endorsement is the popular Family Protection endorsement, which provides significant financial protection—up to the limits of your liability coverage—if you or your eligible family members are injured or killed in an accident caused by an uninsured, under insured or unidentified (e.g. hit and run) at-fault motorist.

A claim is a request to an insurance company for payment for loss, damage or injury as covered in an insurance policy.

Your deductible is the amount of money you are required to pay out-of-pocket towards any claim you make under your car insurance policy.

For example: If your vehicle sustains $2,000 worth of damage in an accident and your collision deductible is $500, then you would be responsible for paying the first $500 and your insurance company would pay the remaining $1,500.

You can choose a different deductible amount for your collision coverage and your comprehensive coverage.

Tip: If you can afford to make a higher out-of-pocket payment in the event of a claim, then choose a higher deductible. You’ll pay a lower premium as a result.

Yes. Since your driving record affects your car insurance coverage and premium, your insurance company needs to know the facts of your accident.

Furthermore, if you were involved in an accident with another vehicle, the driver of that vehicle may claim from his or her insurance company—who will, in all likelihood, communicate with your insurance company about the accident. It is important to note that not all accidents will result in premium increases.

Moving—even within the same town or city—can affect your car insurance premium, so be sure to call us at 1-877-749-7224 before your moving day.

Also keep in mind that car insurance laws are different in every province. If you’re moving to a different province, let us know and we will help make sure your policy complies with the laws in your new province².

See the Claims and Service page.

Yes, particularly if they’re less likely to be stolen or, statistically, if injuries suffered in certain vehicles are less severe. Vehicles that are less expensive to repair will also typically cost less to insure.

Tip: If you’re shopping for a new car and are looking for the better insurance value, we can give you a no-obligation quote for each of the models you’re considering.

Yes! You can insure the following types of vehicles through us:

• Motorcycles
• Class A, B or C motorhomes
• A wide range of recreational trailers
• Collector cars¹
• Snowmobiles and all terrain vehicles (ATVs)
• Boats and personal watercraft

Because each person’s situation is unique, there isn’t a single answer to this question. However, using statistics and complex formulas, insurance companies usually calculate your car insurance premium by taking into account where you live, the type of vehicle you drive (and how you use it), your driving and claims record, other drivers on your policy and the amount of coverage you want.

There are several ways to save on your car insurance.

Depending on the province you live in², there are some discounts that may apply to you automatically—for example being claims-free for a certain time period or qualifying as a mature or experienced driver. In other cases, there are specific things you can do to qualify for other potential discounts. This includes:

• Save when you insure more than one vehicle through us⁴
• Save on your car insurance policy when you purchase a homeowners, condo or renters insurance policy through us⁵

Most likely, yes. Your driving record is one of the factors insurance companies consider when calculating your car insurance premium. The more experienced you are and the fewer claims and accidents you’ve had, the lower your premium is likely to be.

You have several choices for paying your car insurance premium including: a major credit card (Visa, MasterCard or American Express) or preauthorized withdrawals from your bank account. Your Advisor will work with you to set up the payment plan method that works best for you.

You may use a Visa debit or MasterCard debit for your initial payment, but have to select one of the options above for any future payments.

To take advantage of this easy payment option, simply give us your bank’s transit and institution number, as well as your account number (a void cheque is not required) when you complete a pre-authorized chequing payment form. You can even choose the date you’d like your account to be debited each month.