Questions & Answers about Coverage, Claims & Deductibles
Get helpful tips and review the basics of auto insurance:
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Q. What is "no fault" auto insurance?
A. Sometimes known as "first party insurance," the "no fault" system has been instituted in several provinces in an effort to:
- Help control court costs when claims are disputed
- Provide prompt financial assistance for accident victims
- Stabilize insurance premiums
Under the "no fault" system, everyone involved in an accident submits a claim to their own insurance company. This means that if another person is at fault for an accident, you would still submit your claim to your own insurance company. Additionally, if you are not at fault but had to pay a deductible, your insurance company may seek to recover your deductible from the at-fault driver's insurance company.
Q. What is liability coverage?
A. Every auto insurance policy includes protection against third-party liability—and for good reason. Liability coverage, also called third-party or civil liability coverage, helps protect you financially if you or another driver on your policy are found legally liable for injuring someone or causing damage to another person's property or automobile while operating a vehicle. In this type of situation, your insurance would pay any legitimate claims against you up to the limits of your liability coverage and also pay for expenses related to settling the claims.
While every province requires a certain amount of liability coverage, the minimum amount required is unlikely to be enough if the courts order you to pay a substantial amount of money in damages.
Tip: At RBC Insurance, we strongly recommend that you purchase at least $1 million in coverage. Plus, if you are leasing or financing a vehicle, your leasing company or lien holder may require at least that much coverage to protect their interests.
Q. What are collision and comprehensive coverage?
A. Collision coverage helps pay for the cost of repairing or replacing your vehicle up to the actual cash value if it hits another vehicle, the ground, or an object in or on the ground (such as a guard rail).
Comprehensive coverage helps pay for the cost of repairing or replacing your vehicle up to the actual cash value if it is damaged by unexpected situations such as falling or flying objects, vandalism, fire, theft or attempted theft, a natural disaster, or a riot or civil disturbance (but not collision).
Tip: Although collision and comprehensive coverage are optional by law, your vehicle's leasing or financing company (if applicable) may require that you have it. We also recommend that you purchase both of these coverages unless your car is very old—and not worth more than a couple thousand dollars—or you can afford to pay out-of-pocket whatever amount might be required to repair or replace your vehicle.
In addition to collision and comprehensive coverage, which are recommended for most situations, there are two other coverages known as All Perils and Specified Perils.
- All Perils coverage includes the protections provided by both collision and comprehensive coverage and also insures your vehicle against loss or damage should it be stolen by someone living in your home or by someone you have hired to drive, service or repair your vehicle.
- Specified Perils coverage insures your vehicle against specific situations only (such as fire, theft or attempted theft, some natural disasters, riots or civil disturbances). In most cases, we do not recommend insuring your vehicle with just specified perils coverage.
Q. What is an endorsement?
A. Also called "riders," endorsements are additional (sometimes optional) enhancements that allow you to customize your auto insurance policy by increasing or even reducing the amount of insurance coverage you would receive in special situations.
One example of an endorsement is the popular Family Protection endorsement, which provides significant financial protection—up to the limits of your liability coverage—if you or your eligible family members are injured or killed in an accident caused by an uninsured, under insured or unidentified (e.g. hit and run) at-fault motorist.
Q. What is a claim?
A. A claim is a request to an insurance company for payment for loss, damage or injury as covered in an insurance policy.
Q. What is a deductible?
A. Your deductible is the amount of money you are required to pay out-of-pocket towards any claim you make under your insurance policy.
For example: If your vehicle sustains $2,000 worth of damage in an accident and your collision deductible is $500, then you would be responsible for paying the first $500 and your insurance company would pay the remaining $1,500.
You can choose a different deductible amount for your collision coverage and your comprehensive coverage.
Tip: If you can afford to make a higher out-of-pocket payment in the event of a claim, then choose a higher deductible. You'll pay a lower premium as a result.
Q. I have had a minor accident and I don't plan to submit a claim. Must I still notify RBC Insurance?
A. Yes. Since your driving record affects your insurance coverage and premium, we need to know the facts of your accident.
Furthermore, if you were involved in an accident with another vehicle, the driver of that vehicle may claim from his or her insurance company—who will, in all likelihood, communicate with us about the accident. It is important to note that not all accidents will result in premium increases
Q. I am moving. What should I do?
A. Moving—even within the same town or city—can affect your auto insurance premium, so be sure to call us at 1 877 749-7224 before your moving day.
Also keep in mind that auto insurance laws are different in every province. If you're moving to a different province, let us know and we will help make sure your policy complies with the laws in your new province†.
Q. How do I submit a claim?
A. For details, please see How to File a Claim on Your Auto Insurance.
All products and services are subject to the terms and conditions of the applicable insurance contract. In the event of any conflict, the terms and conditions of the insurance contract will govern.
Underwritten by RBC Insurance Company of Canada or RBC General Insurance Company.
†Auto insurance is not available in British Columbia, Manitoba and Saskatchewan.
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