Auto Insurance 101: Understanding Liability

Did you know in Canada, you’re required to have liability coverage before you begin driving?

Whether you’re buying a new or used car and need insurance, or renewing your policy and want to be more informed, here’s what you need to know about liability coverage.

What is liability coverage exactly?

Liability coverage is what protects you and other drivers financially in case of an accident where you’re at fault. By having liability coverage, any damages, injuries or losses experienced by another driver or individual, will be covered. If you are a driver and sustain any injuries or damages from an accident, accident benefits will cover your expenses. You can learn more about what’s covered if you’re hurt in an accident.

Choosing the right amount of coverage

The minimum required liability coverage in Canada varies by province, but certain claims can cost well above the minimums. Although it’s your choice, having at least $ 1 million of coverage is highly recommended. This amount represents how much your insurance company will cover in the case of an accident. That said, the average auto claim can cost over $1 million, so you may have to pay any remaining costs out of your own pocket. For a small increase in your premium, getting additional coverage is well worth it.

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