CA Automobile Insurance: What to expect & Why it is expensive?
CA automobile insurance is composed of three components, Compulsory Third Party Insurance (CTP), Automobile Liability Insurance, and Automobile Accident Benefits.
CTP is simply auto insurance required by statute throughout Canada. Liability insurance covers injuries, property damage occurring from an accident, and the costs of defending a suit from an accident. Accident benefits cover health care associated with an accident when not covered by another plan.
With the rising cost of owning a car in Canada, your automobile insurance can have a big impact on your monthly expenses. It would be great if you could get great insurance coverage at affordable rates or even better, for free!
There are a number of factors that influence the rates you pay for car insurance, but the most important is your personal driving history. A simple mistake can be detrimental to your bottom line especially if you’ve been in a car accident.
CA Automobile Insurance: What to expect?
Canada’s car insurance policies cover three basic types of auto damage: collision, comprehensive, and uninsured and underinsured motorist coverage.
Collision insurance covers damage to your vehicle from a collision with another object or vehicle.
Comprehensive insurance covers other types of damage to your vehicle from an event other than a collision, such as theft, vandalism, fire, weather damage, or hitting an animal.
Uninsured/underinsured motorist coverage is for injuries or damage you suffer in a collision with an uninsured or underinsured motorist.
Why Automobile Insurance is Expensive in Canada?
Canadians seem to have a love-hate relationship with insurance. We love it when it helps us, and hate it when it doesn’t. But one thing we can say for sure: We love it when it helps us get what we want.
For insurance to work, you have to know what you want: how much insurance you need, and what’s covered. That depends on how much investment for insurance you have. If you have enough, you don’t really need insurance. But if you have too little, you can’t afford what insurance provides. So you have to get enough insurance.
If you buy insurance, the company will make money. But if it loses money, it will lose business and go bankrupt. So it has to make a profit. That probably means that it has to charge more.
But how much it can raise the price depends partly on how much others are willing to pay. When others are willing to pay more, the company can raise the price. But if others are not willing to pay more for the insurance, the company’s business may dry up. In that case, it has to charge less.
The only way the insurance company can know how much to charge is by asking people to pay. Its willingness to ask depends on how much people want what you’re asking.
If that wasn’t enough, insurance has to make sense. When the company makes money, it pays out claims. You buy insurance because you expect to make a claim. But only if the company has enough money to pay those claims can it pay for your needs. If it can’t pay your claim, you don’t get what you need, and the insurance company makes less money.
To make money, the company has to pay claims, and to pay those claims it has to pay claims, and so on. The basic problem: it has to keep paying claims, and it can’t keep paying claims, unless it keeps enough money.
Conclusion:
The costs of automobile insurance in Canada can vary widely, so it’s important to shop around for the best rate. If you’re looking for discounts, be sure to ask about them when you do so. They may be available through your employer, credit union or the like.
Whether you need an automobile policy with $1 million in liability coverage or $500,000 in liability coverage, your auto insurance quote will vary greatly depending on numerous factors including your driving history and where you live.