Your vehicle is of a certain age and you are only considering insuring “on one side”? What are the consequences of such a decision and, above all, what do you risk in the event of an accident?
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Motorists do not always understand what it means to be insured “on one side” or “on both sides”, nor the consequences of this choice. To shed light on this topic, we must first understand what these terms cover.
Chapters A and B of the insurance agreement
“Under the Automobile Insurance Act, every vehicle owner must have liability insurance. The minimum amount to take out is $50,000, but the majority of motorists are insured for $1 or $2 million,” explains Anne Morin, head of public affairs at the Insurance Bureau of Canada.
This liability insurance is the mandatory part of the car insurance contract, also called chapter A. Thanks to it, you get compensation if your vehicle suffers damage in an accident for which you are not responsible. You will also be covered if you are responsible for property damage and bodily injury to others in an accident outside of Quebec. With Chapter A, you are therefore covered “on one side”.
The car insurance policy also contains an optional part, Chapter B, which sets out a range of protections intended to cover material damage to the vehicle. For example, all-risk protection, collision and rollover protection, etc. With this cover, you are protected “on both sides” and receive compensation for material damage even if you are responsible for the accident.
Subscribe or not
Annie Morin points out that the decision to take out insurance for damage to her vehicle (Chapter B) is up to everyone. But before making a decision, she recommends that you be aware that if you are responsible for an accident, it is this insurance that covers the damage to your car. Otherwise, you’ll have to dip into your wallet. “According to the latest statistical data, the average cost to repair a vehicle after a collision was $6,092 in 2021. This amount is constantly increasing, and without insurance for the damage, we have to pay the amount ourselves to get your vehicle repaired,” she warns.
In addition, if the vehicle is leased or financed by a financial institution, the creditor usually requires full coverage (chapters A and B), and you will then have no choice whether to take out damage insurance.
While each case is unique and it is important to carefully analyze your personal situation before making a decision, here are some things to think about to guide you:
- If the value of your vehicle is low due to its age and high mileage, and your budget is tight, you may consider opting out of Section B. However, in the event of an at-fault accident, you must pay your own expenses and possibly assume the total loss of your car.
- If your car is newer and still has a good market value, you will benefit from subscribing to chapters A and B (liability and damage insurance).
- One option could be to subscribe to Section B, but exclude the most expensive protections such as all risks and collision and disturbance protection.
- Another option: Take out non-life insurance, but increase the deductible, which will lower your premium. But remember that if you are responsible for the accident, the bill can be high.