3 ways car insurance can help protect you

A cartoon of two cars colliding

For many families, a car is a must-have. It helps get you from point A to point B in less time. While many drivers grumble about paying for car insurance coverage, car insurance can protect you financially if you’re involved in a serious collision. You work hard for your money. The last thing you want is to be sued by a fellow motorist when you’re involved in an accident and have to pay damages out of pocket.

Let’s take a look at three ways car insurance can help protect your finances when you’re behind the wheel.

Protecting you from liability claims

Car insurance can protect you against liability claims. Imagine for a moment you’re involved in a serious car accident, injuring a fellow driver and causing damage to their vehicle. Without liability coverage, you could end up paying a substantial amount of money out of pocket in damages if the injured driver decides to sue you in court.

Not only is liability coverage money well spent, it’s required by law. The minimum amount required depends on the province or territory in which you reside. Although there’s no magic number, it’s generally a good idea to have at least $1 million in liability coverage. For example, let’s say you’re ordered by the court to pay $700,00 in damages, but you only have coverage for $500,000, you’ll have to pay $200,000 out of pocket. I’m all for saving money on auto insurance by shopping around, and looking for opportunities to save is a worthwhile thing, not buying enough liability coverage is a case of penny wise, pound foolish.

Protecting you from injury or death

Secondly, car insurance can protect you from injury or death. Similar to liability coverage, it’s the law in all provinces except Newfoundland and Quebec to have a certain amount of accidental benefits coverage. If you’re injured in a car accident (regardless of who is to blame), accidental benefits coverage can help by replacing any lost income during this time, as well as pay for any medical expenses related to your accident. If you’re killed in the accident, it can provide financial support to your spouse and children. If both your spouse and you are killed, it can even cover childcare costs during this time for any dependant children.

Protecting you from motorists without car insurance coverage

Last but not least, car insurance can protect you when you’re involved in a collision with a motorist without coverage. Imagine being involved in an accident through no fault of your own and thinking the at-fault driver’s insurance is going to cover the claim, only to find out they’re driving without auto insurance. The good news is that in every province except for Quebec, you’re protected in this situation. In fact, it’s the law to buy a minimum amount of this coverage. Furthermore, you’re protected if you’re involved in a hit and run, where you aren’t able to get the insurance information from the other motorist.

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