Top 5 auto insurance topics poorly understood

We sometimes have trouble fully grasping auto insurance, even more when we shop for insurance or make a claim.

Here are some of the least understood topics by policyholders and information to help navigate those questions.

1. "Do I have to file a claim for a car accident involving minor damage?"

Whether or not to make a claim is entirely up to you. However, auto insurance policies require the you to report an accident, even if you have no intention to file a claim. For more information, you can read the article Report and claim: two very different actions.

2. "Am I covered when I’m involved in an accident with a car I don’t own?"

This is a common question, especially with car sharing becoming more popular.

• If you are not liable for the accident, the vehicle owner’s insurance will cover the damage.
• If you are liable for the accident, the loss occurrence may be covered:
  • either by the vehicle owner’s insurance policy, as long as the owner has the coverage under their policy;
  • or by your auto insurance policy, if you have one and have Endorsement 27 (meant to cover damage to a vehicle not owned by the driver).

Note that regardless of which insurer pays for the damages, the accident will be added to the driving record of the person who was at the wheel at the time of the accident.

If you want more information, you can consult the article Endorsement 27: coverage for damage to vehicles you do not own. 

3. "Can I appeal my insurer’s decision to declare my vehicle a total loss?"

Yes, you can always talk to and negotiate with your insurer. The process starts with an automobile damage appraiser who will assess the damage and estimate the cost of repairing the vehicle, considering the vehicle’s value at the time of the occurrence. The value is based on how old it is, its general condition and its market value.

If the repair costs exceed the vehicle’s value, it will generally be declared a total loss. Sometimes a vehicle is declared a total loss even if the damage estimate is lower than the vehicle’s value (for example, if the damage could affect the vehicle’s safety). Experience shows that for some damage, additional costs are often added to the repair costs once the work has started. 

YIf you disagree with the value of your vehicle set by your insurer, you can prove your vehicle’s value by providing supporting documentation.

You can also contact the Insurance Information Centre if you disagree with your insurer’s decision.

For more information, you can consult the article Total loss vehicle: what you need to know.

4. "I had a fender bender, but I don’t intend to make a claim. Should I report it anyway?"

By law, motorists must report all motor vehicle accidents, even if the damage is minimal. Even if you do not make a claim, reporting the fender bender ensures that your version of events will be entered in the Fichier central des sinistres automobiles, not just the version of the other driver involved in the accident.

For more details, consult the article Fender bender without any damage: should you report it?

5. "Does my liability in a collision affect the compensation I will receive?"

The compensation amount you’ll receive does depend on your liability in the accident.

• If you’re at-fault for the collision and your vehicle is damaged, you will only be compensated if you have Collision or All Perils coverage. In addition, you will have to pay the deductible listed in your contract.
• If you are not at fault, your insurer will compensate you, even if you do not have Collision or All Perils coverage. You will not have to pay the deductible.

The article Car accident: How your liability affects your claim provides clear details on how insurance works based on established liability.