Car Insurance 101 - Discover How Car Insurance Works

What, Why, When, Who and How

Are you new to car insurance? Or just want to know a little more about it? We're here to help. Car insuranceInsurance may seem a bit complicated, but once you’ve got a handle on the basics, it gets easier and you can start making confident, informed choices for yourself. After all, knowledge is power.

What is car insurance?

Car insurance is your way of being able to cover the expenses that come up if you’re driving and you hurtinjure someone or damage someone’s property., or if you get hurt and need medical care. This is called Liability insurance in Quebec, and and, it's mandatory if you want to drive a car. You can also voluntarily add insurance that gives you coverage for damage to your car caused by collision, or protection against damage or loss from things like theft or vandalism.

Why do I need it?

Let's say you've injured someone. The costs of that person’s medical bills, hospital stay, rehabilitation, medication and other types of care can really add up. They’re off work and may need a source of income. Their spouse and/or dependants may need financial support. Most of us don’t have tens or hundreds of thousands of dollars lying around to cover those costs, so that’s where your Liability insurance comes in. If you’ve hit someone’s car, it’s the same thing. Their repairs need to be covered. Or, their car needs to be replaced. The insurance you pay into helps cover these expenses.

Let's say for example, that you've collided with someone's car while you're driving. The car you collided with may need to be repaired or, it may need to be replaced. Most of us don’t have thousands of dollars lying around to cover those costs, so that’s where your Liability insurance comes in. The insurance you pay into helps cover these expenses.

Who has to get it?

Every person who drives a car must have insurance.

In Quebec, every person who owns a car must have civil liability insurance.

When do I need to have it?

From the moment you’re handed the keys to the car you call your own, you need to have insurance. No matter how often you drive it, or how far you drive it, or even if you just have it stored in the garage, if you own it, you need to insure it.

How do I get it?

There are a few ways to get car insurance. You can go through an insurance broker who offers insurance products for various insurance companies. Or, you can go through an a certified insurance agent, who works for a single insurance company and only sells that company’s coverage. Or, you can buy coverage directly from an insurance company through their website or call centre, with the help of an insurance agent.

We’ll ask for some information about you, the car you’re going to drive, and your driving record. Here’s some of the information we may need from you:

  • Your name, address, gender and birthday
  • How long you’ve been driving
  • The make, model and year of your car
  • Whether you own or lease your car
  • How many violations are on your driving record
  • How many claims you’ve had

Why is it so expensive? How is the premium calculated?

Everyone’s insurance premium reflects their unique situation. When we calculate your premium, we look at a lot of factors, like the theft and crime rates in your area, how often and how far you’ll be driving, the type of car you’ll be driving, and your driving record. If any of these factors pose a risk for harm due to theft, collision, or vandalism, your premium willmight be higher. We also look at how long you’ve been driving.

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