Your vehicle is of a certain age and you are thinking about just insuring it “unilaterally”? What are the consequences of such a decision and, above all, what is the risk in the event of an accident?
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Motorists don’t always understand what it means to be ‘unilaterally’ or ‘double-sidedly’ insured, nor even the implications of that choice. To shed light on this topic, we must first understand what these terms encompass.
Chapters A and B of the insurance contract
“According to the Motor Vehicle Insurance Act, every vehicle owner must take out liability insurance. The minimum subscription is $50,000, but the majority of motorists are insured for $1 million or $2 million,” said Anne Morin, director of public affairs at the Insurance Bureau of Canada.
This liability insurance is the mandatory part of the motor vehicle insurance contract, also known as Chapter A. Thanks to it, you will be compensated if your vehicle is damaged in an accident for which you are not responsible. You are also covered if you are responsible for property damage and personal injury caused to others in an accident outside of Quebec. So with Chapter A you are “unilaterally” protected.
The auto insurance contract also includes an optional part, Chapter B, which lists a number of protections aimed at covering property damage to the vehicle. For example, all-risk protection, collision and rollover protection, etc. With this coverage, you are “mutually” covered and compensated for property damage, even if you were at fault for the accident.
Subscribe or not
Annie Morin advises that the decision to purchase insurance for damage to your vehicle (Chapter B) is a personal choice. However, before you make a decision, she recommends being aware that if you are responsible for an accident, this insurance will cover the damage to your car. Otherwise, you’ll have to dive into your wallet. “According to the latest statistical data, the average cost to repair a vehicle after a collision in 2021 was $6,092. This amount is constantly increasing and if you do not have insurance for the damage, you will have to pay the amount yourself to have your vehicle repaired,” she warns.
If the vehicle is leased or financed by a bank, the creditor usually requires comprehensive insurance (Chapters A and B) and you then have no choice as to whether you want to take out damage insurance.
TIPS:
Although each case is unique and it is important to carefully analyze your personal situation before making a decision, here are some things to keep in mind to guide you:
- If your vehicle’s value is low due to age and high mileage and your budget is tight, you may consider deviating from Section B. However, in the event of an accident that is your fault, you will have to bear your own costs and possibly take over the total loss of your car.
- If your car is new and still has a good market value, you are well advised to take out Chapters A and B (liability and damage insurance).
- An option might be to subscribe to Section B but exclude the most expensive protections such as all risks and collision and rollover protection.
- Another option: get damage insurance, but increase the deductible, which will lower your premium. But keep in mind that if you are responsible for the accident, the bill could be high.