Car insurance: what you need to know

What is compulsory insurance? What does it mean to be insured on “both sides” and what should you do when no insurer wants to insure you?

Public insurance and private insurance

First of all, all Quebecers are insured by the public plan of the Société de l’assurance automobile du Québec (SAAQ) for bodily injury (injuries, death, etc.). This plan covers all residents of Quebec, whether they have a driving license or not. It covers injuries suffered during an accident involving a road vehicle in Quebec or elsewhere in the world. This means, for example, that a pedestrian or cyclist hit by a car may be compensated by the SAAQ.

You will be compensated whether you are responsible for the accident or not. Additionally, you will not be abl to sue or be sued in court for the personal injuries caused.

However, not all damage is covered by the SAAQ, hence the obligation to have private insurance.

In Quebec, all private insurers offer the same type of contract based on the Quebec Policy Formula. This policy has two parts. Chapter A provides for civil liability, which is mandatory. Chapter B, which protects against damage caused to your own automobile, is optional insurance.

Civil liability insurance (Chapter A): an obligation

In Quebec, the law requires all automobile owners to have insurance of at least $50,000 to cover their civil liability in Canada and the United States.

Often called “one side insurance”, this insurance covers damage caused by your fault to another person. More specifically, this insurance covers:

property damage caused to others with your automobile (e.g. by parking in your garage, you damage your neighbor’s fence);

injuries and other bodily damage caused to another person, and which are not covered by the Société d’assurance automobile du Québec or other public plan.

In addition, in the event of a collision between your automobile and that of another person, your liability insurance covers damage caused to your own automobile if you are not responsible for this collision. If you are, you will only be covered if you have taken out the optional private insurance in chapter B of your contract (see explanation below).

If you do not have this insurance and you are stopped by the police, you could receive a fine and your driver’s license could be suspended.

This insurance can cover damage to your own automobile, including damage caused by a collision for which you are at fault. It can also cover the theft of your automobile.

In popular parlance, we say that you are insured on “both sides”. However, this insurance is not compulsory.

Your coverage will depend on the types of protection you choose. The types of optional protection offered in Chapter B may be as follows:

damage caused to your automobile in the event of a collision with an automobile or in the event of an overturn, even when you are responsible;

damage caused without collision (in particular fire, hail, flooding, vandalism, theft of the vehicle);

all-risk protection. It covers all damages to your automobile except those that are excluded in the contract (for example, rust is excluded);

specific risks. These are specific risks specified in your policy, such as an explosion or earthquake.

To be compensated in the event of damage not covered by the previous protections, your insurer will offer you “endorsements”, that is to say optional additional protection. You will, however, have to pay additional fees.

Premiums and deductible

Please note, first of all, that your insurance premium is determined based on different personal characteristics: age, gender, driving record, place of residence, type of vehicle, type of use, etc.

Financial stability, commonly referred to as credit history, is also a factor that may be taken into account by some insurers.

The coverage you choose may come with deductibles. These represent the amount that you will have to pay, yourself, in the event of a claim.

Attention! You will not have to pay a deductible if you are not responsible for the accident, you will then be compensated by the civil liability insurance.

Compare your car insurance when purchasing it

Please note that insurance is a product that you have the right to shop for when renewing your contract. You can therefore check with other insurers to see if they offer better prices or better protection. However, you must compare the differences in premium, deductible and the protection offered in order to make an informed choice.