Top 5 Terms to Know About Car Insurance – Car insurance is not always simple. Here are five terms you should know. We demystify them for you.
The bounty
The premium is the amount you must pay to your insurer for your car to be protected. Determined by several factors, it can be paid monthly or annually and can fluctuate if your situation changes (e.g.: the addition of a secondary driver, after a disaster, etc.).
Of course, the amount of your premium is important, but you must also take into account the different protections obtained for this price when shopping for insurance.
The risk
The word risk, synonymous with “cause of loss” in auto insurance, is important, especially when we are talking about all-risk protection or named risks (or specified risks).
All-risk protection covers fire, theft, and vandalism as well as windshield damage. However, it does not cover wear and tear, for example, the replacement of brake pads. It is for this reason that we often speak of “all risks except” protection.
The designated risk – less expensive – must be mentioned in the contract, for example, theft or fire.
Beware of exclusions
All car insurance contracts have exclusions. The most common: is bodily injury already compensated by various laws or losses occurring while the vehicle was used for an activity other than mentioned in the contract.
Franchise
The deductible is the amount not covered by your insurer in the event of a claim. In other words, this is the amount you will have to pay in the event of an accident or disaster. The higher the deductible, the more you save when purchasing your insurance.
In these times when auto insurance is increasing, it’s a good idea, but it comes with risks. Will you be able to pay if this happens? Will claim to be worth it? Be aware that you should not pay a deductible if your insurer obtains information about the other party involved in the accident and the latter is declared 100% responsible for the accident.
The occasional or secondary driver
Do you share a car with your spouse or do you have a child old enough to drive? It’s worth adding him to your contract as a secondary driver to benefit from the same protections as you. This addition has a cost, but rest assured, it is significantly less expensive than insurance for a main driver.
Thus, a driver’s file will be opened, which will make it easier for your child to acquire their car and to insure it provided that their history is good.
If you do not wish to add your spouse or child to your contract, they will be considered as an occasional driver, that is to say as any person to whom you could lend your car from time to time and not regularly. regular. This option does not include any driving records.
“No fault”
Contrary to what many may think, no-fault does not designate the person responsible for an accident. In Quebec, no-fault means that all people involved in road accidents are covered by the public automobile insurance plan (SAAQ), regardless of fault.
For example, a person will be compensated by the public plan, even if they drank before getting behind the wheel or if they did not have winter tires the day after a storm in December.
As for material damage, it is the insurance companies of each driver who compensate them or not.
Always read your insurance contracts
It’s long, it’s written small and it’s rather dry, but reading your insurance contract is essential. If you have any questions, do not hesitate to ask your insurance agent or broker, do research on the Web, and bid with at least three companies before making your decision.
Each company has its strengths, so the one that protects your SUV may not be competitive if you opt for a sedan or electric vehicle. You have to shop around.
