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

Why get car insurance?

The purpose of auto insurance is to protect a vehicle’s owner against financial loss as a result of an accident involving that vehicle. Whether the insured’s vehicle is damaged or someone else suffers a loss, auto insurance will pay the loss to the party affected, based on the terms and conditions in the contract.

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.

“One way” coverage

A vehicle is said to be insured “one way” when it has only civil liability coverage. This means that only damage caused to others will be covered by the insurance contract, whereas any damage to your own vehicle will not be covered. This is the minimum required coverage and is appropriate when your vehicle is getting older and its value is so low that the owner is willing to bear the cost of the damage to the vehicle in the event of an accident.

“Two way” coverage

“Two way” coverage provides greater protection as it covers both damage you may cause to others and damage to your own vehicle. This type of insurance contract covers your vehicle in the event of a collision or rollover, as well as for other risks like theft, vandalism, hail or fire.

If your vehicle is starting to age and you want to save on your insurance policy without completely insuring it one way, you can also choose “in between.” This means that you insure your vehicle “one way” in terms of civil liability, and you add coverage for risks other than collision and rollover, such as fire, theft, vandalism and broken windows. This lets you reduce your insurance premium by removing just one part of the coverage, namely collision and rollover.

Choosing your insurance coverage

Your choice of coverage should be based on the vehicle’s current value and your ability to cover expenses in the event of an accident. Furthermore, as long as there is a creditor on the vehicle, it will need to be insured “both ways” to protect the creditor and meet its requirements. As a rule of thumb, if your vehicle is fairly new, don’t lose any sleep over it and insure it “both ways”—you’ll be able to drive with peace of mind.

Once you do these five things, you are now ready to tackle the winter. Also don’t forget to drive according to winter road conditions. Always keep the proper distance from the vehicle ahead of you and cut back on distractions.