Canada Insurance

Car Insurance in Canada

Car insurance in Canada is mandatory. If the policeman stops the car for any reason, you can be sure he will ask you for your car insurance. Penalty for its absence is $5,000. Size of the insurance payments depends on the insured sum, driver’s age and gender (women are considered to be more careful in driving and pay less), driving experience, and the number of penalty points for breaking traffic rules, as well as accidents due to the fault of the owner, reported to the police during the year.

The magnitude of the insured sum depends on the value of the insured vehicle and the magnitude of the damage that the car can cause. Therefore, owning a car worth $300 (such prices in Canada are defined for cars that still run well enough, but have poor appearance due to their age and mileage) does not mean that the insurance amount will be equally low. This car can cause an accident with a very expensive car which requires large expenditure on repair. The insured sum is reduced, but not much, if the owner makes a one-way car insurance. This means that in case of accident, caused by the car owner, expenses are covered only for the party which has suffered, and the cost of restoration of his own car the owner will compensate by his own means. Usually unilateral insurance is rarely profitable and only in case of very low-cost cars. In all cases the value of the insured sum is rarely below $500,000.

The insurance fee

The insurance fee is highly dependent on the age of the driver. If the person is a beginning driver aged 16 to 18, his insurance is maximal and can reach up to $300 a month. According to statistics, in this age, especially for men, the maximum number of accidents happens. With driver‘s age increasing, insurance fee falls rapidly, even if this is the beginning driver.

The insurance fee is also dependent on the experience and the driving conditions, confirmed by the insurance company. Therefore, to reduce insurance fees the driver must documentally show that he drove a car before for a certain period of time, and whether the previous insurance company had any claims against him. The insurance fee is substantially increased if the driver is penalized for violating the traffic rules, especially in case of accidents caused by him.

Penalty points system in Canada is based on the fact that for every traffic violation registered by police, depending on their severity, the driver pays a fine (he is handed a bill for which he must pay a fine in the bank during the week). Also he receives penalty points loaded in the police computer. Every year, when renewing car insurance, insurance agent takes the data from the police to check how many traffic violations and accidents the driver commited. Depending on the gravity of the violations and accidents, the driver faces increased insurance costs. Therefore, even in case of violations or accidents, the driver should try as much as possible to reduce his demerit points. It is useless and dangerous to try to “negotiate” with the police, offering them money. Police in Canada are very highly paid, and brought up in a solid respect for the law. So they will not take the driver’s money, and the latter risks serious responsibility for bribing an official. However, the driver can appeal to the court for the cancellation of penalty and do it either by himself or by hiring a lawyer. In most cases, either a policeman does not attend a hearing, and then the case is automatically resolved in favor of the driver, or the driver or his lawyer can convince a judge of a random violation, and the penalty is cancelled. Also, if the driver caused damage in the amount of not more than $700 to someone else’s car, a cheaper option should be calculated: to make repairs at his own expense and not notify the police and insurance company, or to cover repairs by insurance, which will cause significantly higher insurance costs next year.


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