Insuring your vehicle “one way” or “two ways”?

Why get car insurance?

Auto insurance exists to protect vehicle owners from financial losses caused by accidents. Auto insurance provides coverage if you have experienced damage to your vehicle or another person experiences a loss due to a collision. The insurance company will compensate the affected party, whether it's the vehicle owner or someone else.

The amount and type of car insurance coverage depend on the specific terms and conditions outlined in the insurance policy. By offering this protection, auto insurance helps reduce the financial burden that car crashes can cause.

Is auto insurance mandatory?

In Canada, auto insurance is mandatory. All vehicle owners must have liability insurance coverage as a minimum. Civil liability is protection that covers property damage or bodily injury that you may unintentionally cause to others. In most cases, insurers offer civil liability coverage in the amount of $1,000,000 or $2,000,000.

Keep in mind that, in Quebec, this civil liability protection does not cover your bodily injury. The Société de l'assurance automobile du Québec (SAAQ) provides mandatory no-fault public insurance coverage for bodily injuries resulting from car accidents. This coverage applies to Quebec residents who have sustained injuries in car accidents within Quebec, regardless of who is at fault, and extends to Quebec residents involved in car accidents anywhere in the world.

What is the difference between one-way and two-way insurance coverage?

Understanding the distinctions between one-way and two-way insurance coverage is key to making an informed decision about your auto insurance. Each type offers a different level of protection, tailored to suit various needs and circumstances. Whether you prioritize cost savings or comprehensive coverage, knowing what each option entails can help you find the best fit for your vehicle and personal circumstances.

“One way” coverage

A vehicle is considered to have "one-way" insurance when it only includes civil liability coverage. This type of insurance means that damages caused to others, such as their property, will be covered under the policy. However, any damage to your own vehicle will not be covered.

One-way insurance is the minimum coverage required by law and is often chosen for older vehicles. When a car's value has depreciated significantly, the owner might decide that it's not worth paying for additional coverage and would rather cover repair costs themselves if they are involved in a car accident. This approach balances legal compliance with cost considerations.

“Two way” coverage

"Two-way" insurance provides more comprehensive protection compared to "one-way" coverage. It not only covers damage you might cause to others, such as their property, but it also protects your own vehicle. This type of insurance is designed to cover your vehicle in case of a collision or rollover, ensuring you don’t have to bear the financial burden of repairs.

In addition, it includes coverage for other risks, such as theft, vandalism, hail, or fire. This makes two-way insurance a popular choice for newer or higher-value vehicles, offering peace of mind.

Is there an in-between insurance coverage option?

If your car is getting older and you want to save money on your insurance without dropping all coverage, you have another option. You can choose a middle ground. This means you’ll keep “one-way” insurance for civil liability, but you can add extra protection for specific risks like fire, theft, vandalism, or broken windows.

By doing this, you remove coverage for collisions and rollovers, which helps lower your insurance premium. It’s a great way to balance cost and protection, ensuring that you’re still covered for common risks without paying for full coverage that might not make sense for an aging vehicle. This approach gives you flexibility and lets you customize your insurance based on your needs and budget.

Choosing your insurance coverage

You should consider several factors when deciding what type of auto insurance coverage you need. Let’s explore them in more detail.

Type of vehicle

When choosing your car insurance coverage, it’s important to consider the current value of your vehicle and your financial ability to pay for damages if an accident happens. If you have a loan or lease on your car, your vehicle must be insured with full coverage to meet the creditor's requirements and protect their interest.

As a general guideline, opting for full coverage is a good idea if your car is relatively new or still has significant value. This way, you’re protecting yourself financially and ensuring peace of mind while you’re on the road. Knowing that both you and your creditor are covered allows you to focus on enjoying the drive without unnecessary worries.

Driving habits and style

Your driving habits and style play a role in determining the best type of auto insurance coverage. If you frequently drive in high-traffic areas, commute long distances daily, or often travel in regions prone to car accidents or harsh weather conditions, comprehensive “two-way” coverage might be a safer choice. The more time you spend on the road, the higher the chances of encountering situations that could damage your vehicle.

On the other hand, if you use your car sparingly—perhaps only for errands or occasional weekend trips—you might find that “one-way” coverage is enough for your day-to-day driving.

As for your driving style, err on the side of caution. Defensive drivers who obey traffic laws, maintain safe following distances, anticipate hazards, and avoid risky behaviours are less likely to be involved in car incidents.

Techniques preparing for driving in various weather conditions, minimizing distractions, and avoiding aggressive maneuvers can drastically reduce the risk of accidents. By prioritizing defensive driving habits, you can keep yourself and others safe.

Local risks

Where you live also impacts the type of insurance coverage that suits your lifestyle. If you’re in an area with high rates of car theft or vandalism, adding coverage for these risks could be essential—even for older vehicles. Similarly, regions prone to extreme weather may require additional protection to safeguard your vehicle from costly damages.

If you live in a quiet area with low crime rates and minimal traffic, you might feel more comfortable choosing a less comprehensive policy. Assessing local risks helps ensure you’re adequately protected against the most likely causes of damage to your vehicle in your region.

Driving record

Your driving record and driving history influence your insurance coverage and premium. A clean driving record with no car accidents or traffic violations can make you eligible for lower premiums, making it easier to afford comprehensive two-way coverage.

However, if you have a driving history with several car accidents or infractions, your premiums may be higher, and you may want to choose more basic one-way coverage to mitigate monthly insurance costs.

And there you have it. Now that you have a better idea of the advantages of one-way and two-way insurance coverage. If you still have questions, don’t hesitate to reach out to your auto insurance provider. You can use online calculators to obtain a no-obligation auto insurance quote.