9 FAQs about car insurance

Car insurance can be a tricky issue, your bank account may suffer if you don’t know much about insurance.

Here are FAQs to help you understand how the car insurance works.

What is car insurance?

The basic operating principles of auto insurance are the same as those of other categories of insurance. The amounts paid by a large number of people are used to compensate the insured who contribute to the same fund. These amounts correspond to your insurance premiums , which are higher or lower depending on the type of insurance chosen.

What's the difference between public and private insurance plans?

Insurance plans are regulated by provincial governments and differ from province to province. Some provinces have only a public plan, administered by the state, others have only private insurers. 

In a public system, the government normally covers the entire compensation for accident victims. In provinces without a public plan, private insurers compete to offer the most advantageous coverage possible.

Is this a guarantee to sue the person responsible for an accident?

There's no guarantee on this issue. It depends on the type of plan in the province where you live. In a no-fault regime, you cannot sue another driver for damages. 

It is the government or your insurer that compensates you. In a tort regime, you can sue a driver for additional compensation.

Are insuring high-end cars more expensive?

Not necessarily. It is important to specify that all car models are insurable. However, you should expect the auto insurance premium to be higher for some models. The value of the vehicle is one of several factors that influence the cost of insurance. 

Does the color of cars influence the cost of car insurance?

Several criteria influence the price of insurance (for example the car body type), but colour is not a factor taken into account in the calculation. 

Will the car insurance premium increase if involved in an accident?

Most insurers have a policy of forgiving the first accident. In addition, the type of claim and your level of responsibility in the accident can have an impact on the increase in your premium.

Does insurance payments need to be made on time?

Failure to pay your premium may result in the termination of your insurance policy by your insurer. 

Generally, the latter will give you a chance to remedy your default, but if you do not remedy it, your contract may be terminated according to the terms and conditions provided for therein. It is therefore always preferable to make your payments on time!

In the case of a disaster, is a vehicle repaired with original parts?

It all depends on your insurance contract. The car can be repaired with new original parts, recycled parts, reconditioned original parts or similar new parts. 

Is the insurer automatically renewed or need to be done manually?

Your insurer is not obliged to renew your contract. Of course, he can end the contract as he wants, but he must notify you in advance. 

Insurers often do this by means of a written notice explaining the cause. Note that default is the most common cause.

In a word, read your insurance contract carefully, especially the clauses that confuse you so as to protect the rights you deserve.