Auto insurance: what you need to know

What is compulsory insurance? 

What does it mean to be assured of "two sides" and what should you do when no insurer wants to ensure you? 

Public insurance and private insurance

First of all, all Quebeckers are insured by the Québec Automobile Insurance Corporation (SAAQ) public plan for bodily injury (injury, death, etc.). This plan covers all residents of Quebec, whether they have a driver's license or not. It covers injuries sustained in an accident involving a road vehicle in Quebec or elsewhere in the world. This means, for example, that a pedestrian or cyclist struck by a car may be compensated by the SAAQ.

You will be compensated whether you are responsible for the accident or not. In addition, you will not be able to sue or be sued in court for bodily injury. 

However, not all the damages are covered by the SAAQ, hence the obligation to have private insurance.

In Quebec, all private insurers offer the same type of contract based on the Quebec Police Formula. This font has two parts. Chapter A provides for civil liability, which is mandatory. Chapter B, which protects against damage to your own car, is optional insurance.

Liability insurance (Chapter A): an obligation

In Quebec, the law requires all car owners to have at least $ 50,000 insurance to cover their civil liability in Canada and the United States.

Often called "insurance on board", this insurance covers the damage caused by your fault to another person. More specifically, this insurance covers:

•             property damage to others with your car (eg, parking in your garage, damaging your neighbor's fence)

•             injuries and other bodily injuries caused to another person, and which are not covered by the Société d'assurance automobile du Québec or any other public plan.

In addition, in the event of a collision between your car and that of another person, your liability insurance covers the damage to your own car if you are not responsible for the collision. If you are, you will be covered only if you have taken out optional private insurance in Chapter B of your policy (see explanation below).

If you do not have this insurance and are arrested by the police, you may be fined and your driver's license may be suspended.

Optional private insurance (Chapter B)

This insurance may cover damage to your own automobile, including damage caused by a collision for which you are responsible. It can also cover the theft of your car.

In popular language, it is said that you are assured of "two edges". This insurance is not required.

Your coverage will depend on the types of coverage you have chosen. The types of optional protection offered in Chapter B can be :

•             damage to your automobile  in the event of a collision with an automobile or in the event of a rollover, even when you are responsible;

•             damage caused without collision  (including fire, hail, flood, vandalism, theft of the vehicle);

•             the All Risks. It covers all damage to your car except those excluded in the contract (eg, rust is excluded);

•             the specific risks. These are particular risks specified in your policy, such as an explosion or earthquake.

To be compensated in the event of damages not provided for in the previous protections, your insurer will propose "riders", that is to say, optional additional protection. You will, however, have to pay additional fees.

Premiums and franchise

Know, first of all, that your insurance premium is determined by different personal characteristics: age, sex, driving record, place of residence, type of vehicle, type of use, etc.

Financial stability, commonly known as the credit file, is also a factor that can be taken into account by some insurers.

The protections you choose could have deductibles. These represent the amount you will have to pay, in case of a claim.

Warning! You will not have to pay a deductible if you are not responsible for the accident, you will then be indemnified by the liability insurance.

Generally, the higher the cost of the deductible, the lower the monthly premiums will be.

Compare your car insurance when you buy

Know that insurance is a product that you are entitled to shop when renewing your contract. You can check with other insurers to see if they offer better prices or better protection. However, differences in premiums, deductibles, and coverage have to be compared to make an informed choice.

Renew or terminate your insurance contract

At maturity, your insurance policy will renew automatically under the same conditions, unless your insurer sends you a written notice at least 30 days before the due date.

In addition, you can cancel your policy at any time by sending your insurer a written notice. You do not need to provide a reason. If you paid your insurance premium in advance, your insurer will have to refund the amount paid in excess.

The insurer may terminate the contract within the first 60 days by notifying you in writing. The cancellation will be applicable 15 days after receipt of this notice. After 60 days, he can not cancel your contract unless you have paid your premium or your risk is getting worse. The insurer must then send you a written notice. The termination will be applicable 30 days after receipt of this notice.

In case of disagreement with your insurer, you can file a complaint with the AMF.

Difficulty to make sure? A remedy exists

You may have difficulty making sure you are, for example, in the following situations:

•             You have made several claims in recent years.

•             You have been a bad payer.

•             You have a criminal record.

As you are obliged to have insurance for civil liability for damages you cause to others, you are not exempt from this obligation if you can not find an insurer. What if you are in this situation?

The Insurance Information Center can help you solve this problem. To do this, it follows a procedure called the mechanism of access to car insurance. This mechanism is free and will guarantee you the minimum protection provided by law. An agent from the Center will find common ground with an insurer.

Warning! In order for the Information Center to help you, you must first complete certain steps.

You must have been refused by at least 5 insurers. To demonstrate this, be sure to keep track of your calls. Ask and note the names of the agents and brokers you are talking to. Also, keep the names and phone numbers of insurers.