When it comes to insuring your vehicle in Canada, the question of whether to purchase full coverage car insurance, particularly if you drive less, can be a tricky decision. Full coverage car insurance typically includes liability, collision, and comprehensive coverage. This article will explore the key considerations to help you determine if full coverage is the right choice for you.
Understanding Full Coverage Car Insurance
Full coverage car insurance is not a specific type of insurance but rather a combination of several policies that offer comprehensive protection. This usually consists of:
- Liability Insurance: Covers damage you might cause to others in an accident.
- Collision Insurance: Covers damage to your own vehicle resulting from a collision.
- Comprehensive Insurance: Protects against non-collision-related incidents, such as theft, vandalism, and natural disasters.
Assessing Your Driving Habits
If you drive less than the average Canadian, it is essential to analyze your driving habits. According to Statistics Canada, the average Canadian drives about 15,000 kilometers per year. If you’re significantly below this figure, you may be tempted to opt for less coverage. However, your risk exposure remains, regardless of mileage. Even infrequent drivers can end up in accidents, making it crucial to evaluate the likelihood of such events.
The Cost of Full Coverage vs. Limited Coverage
One reason many hesitate to purchase full coverage is the cost. Full coverage can be significantly more expensive than liability or a basic policy. Yet the peace of mind that comes with comprehensive protection may outweigh the higher premiums, especially if your vehicle has considerable value, is a newer model, or if you rely heavily on it for daily necessities.
Vehicle Value Consideration
Another factor to consider is the current value of your vehicle. If your car is older or has low market value, you might weigh the benefits of full coverage against the cost of premiums. If your car has a lower resale value, you may find that basic liability coverage is more cost-effective. However, if your car is relatively new or has a significant value, full coverage may provide essential financial security.
Potential Savings on Insurance
For those who drive less, some insurance companies offer discounts for low mileage. This means that even with full coverage, your overall insurance costs may not be as high as anticipated. It’s always wise to check with your insurance provider to see if they offer any discounts based on your mileage, driving habits, or vehicle safety features.
State Regulations and Requirements
In Canada, each province has its own regulations regarding car insurance. For instance, in provinces like Ontario, personal injury claims may require a minimum amount of coverage. Ensure you understand the regulations in your province to avoid potential legal issues.
Conclusion
In summary, deciding whether to buy full coverage car insurance in Canada when you drive less involves assessing your individual circumstances. Key considerations include your driving habits, the value of your vehicle, and potential discounts for low mileage. Conduct thorough research, consider all factors, and consult with a trusted insurance professional to make an informed decision tailored to your needs.
