Home » 5 Reasons Why Car Insurance Is Mandatory in Canada and How It Can Protect You

5 Reasons Why Car Insurance Is Mandatory in Canada and How It Can Protect You

Many of us need vehicles to get from one place to another and even though cars are the most convenient means of transport, we can all agree that driving can be dangerous, too. Even if you have years of driving experience, always obey the traffic laws, and keep on top of your car maintenance, you never know when other drivers, pedestrians, severe weather conditions, or other natural events could cause a serious car accident that involves you.

This is where car insurance comes into play. If you live in Canada and have just obtained your driver’s license and bought your first car, the next question that pops into your head is probably, do you need to have car insurance? Well, the answer is yes, car insurance is mandatory in Canada and you need it to be able to drive. Even though it’s not federally regulated, it’s regulated by the provinces and territories, meaning that each region of the country has its own rules surrounding car insurance.

Below we take a look at 5 reasons why car insurance is mandatory in Canada and how it can protect you.

The Law Says So

In Canada, if you don’t possess car insurance, you’re not authorized to drive a car. Even if, at first, insurance payments seem costly, the monetary penalties of driving without car insurance could easily add up to thousands of dollars. For instance, fines are known to range from $5,000 to $50,000 in Ontario and you may get your driver’s license suspended and even face jail time in some jurisdictions.

Protect Yourself

One of the top reasons why car insurance is mandatory is to protect you and your car in case of an accident. If this happens, car insurance will come in handy because the standard car insurance plans in Canada cover bodily injuries. 

So, if you or another person involved in the accident requires immediate medical attention, your insurance provider will help cover the medical costs. They’ll be able to help pay for medical costs that aren’t covered by your health insurance policy, such as rehabilitation, prescription medications, or physical therapy.

Pay Now to Save Later

One of the other reasons why car insurance is mandatory in Canada is to protect yourself from the financial costs resulting from such collisions. In the event of an accident, having coverage will protect you from costly and unexpected expenses.

Obtaining a policy with liability coverage, collision coverage, and accident benefits can save you thousands of dollars in case an accident occurs. You can ask a local car insurance agent about customizing your policy so it fits your specific lifestyle and needs.

Accident benefits coverage can, for instance, help you cope with the inability to return to the workforce, the ongoing costs of caring for dependents, and much more. Your car insurance provider can even protect your assets from bodily injury lawsuits through your policy’s liability coverage.

Always remember though to be cautious of auto insurance myths and ensure that you’re correctly informed.

Protection Against Theft

When you drive a car regularly in Canada, you shouldn’t ignore the importance of car insurance, as statistics show that Canadian residents are also affected by auto theft. Nobody wants to experience their precious vehicle being taken away against their will but things do happen and you should be prepared.

If you have a break-in, your policy can cover repairs like damaged door locks and broken windows.

Obtaining comprehensive coverage is optional insurance coverage that protects Canadian drivers from a variety of unforeseen incidents, aside from car crashes. With this policy, your vehicle will be protected in case of damage caused by any insured perils. As the policyholder, you can choose which insured perils to include in your policy. Such perils can be anything from theft and vandalism to hurricanes, floods, and more.

Protects Businesses That Use or Own Vehicles

In Canada, many businesses use vehicles. Small family-owned businesses deliver products, offer home delivery services, perform home repairs and even provide transportation services. 

For this reason, car insurance is essential for those businesses that own vehicles, regardless of how reliable their company may be. With car insurance, drivers will get additional protection and be relieved to know they’ll be covered and that your company will be protected from any potential financial issues if an accident occurs.

In Closing

Car insurance in Canada is mandatory and it’s meant to be a financial protector for anyone involved in a car accident. Medical expenses, for instance, can be quite expensive and insurance will provide a cushion for those who may not be able to afford these services but need them. In addition, mandatory car insurance allows for compensation for collision victims.

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