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Understanding Auto Insurance to Make a Better Choice

What is the best way to finance a car? Once financed, it will need to be insured. You need to understand why and how to insure it properly.

We’ll give you some tips and details to help you understand your role in insuring your automobile, as well as the factors that influence the price of a car premium.

Car Insurance: A Mandatory Protection

Law A-25, better known as the Automobile Insurance Act, requires you to insure your automobile. The law states that:

“The owner of any automobile operating in Québec must have, in accordance with Division II of this chapter, a liability insurance contract guaranteeing compensation for property damage caused by such automobile.”

Buying a car or financing it makes no difference in order to meet this obligation.

Public Insurance: Covers a Lot, But Not Everything

The Société de l’Assurance Automobile du Québec (SAAQ) ensures that you are covered in case of injury due to a traffic accident.

All Québec road-users are covered by the plan. It is directly included in your driver’s license and registration fees.

Public insurance covers you as soon as an accident involving a road vehicle occurs. Whether you are a cyclist or a pedestrian, you are also covered.

The SAAQ’s public insurance covers a certain number of accidents, but you are obliged to have your vehicle insured for civil liability.

However, you are not obliged to have it insured on both sides.

But what does it mean to insure it on one side or “both sides”? Let’s look at the difference between these two types of insurance.

Liability Insurance, Or Insuring It on One Side

You are required by law to insure your car with liability insurance. This is what we mean by “being insured on one side”.

Liability insurance covers you in the following cases:

  • If you cause damage to another person’s car

  • If you cause bodily injury that is not covered by the SAAQ

In Québec, liability insurance is mandatory for all motorists.

It must be of at least $50,000 to cover potential damages, but some insurances offer higher amounts for civil liability.

Although it is mandatory, it will be up to you to decide whether you want to go with the minimum required, or whether you prefer to opt for a higher amount for your liability insurance.

Private Insurance, Or Insuring Both Sides

This is where we refer to the concept of being “insured on both sides”. This insurance covers damage to your vehicle or damage caused by another person.

When combined with liability insurance, you are insured on both sides (if you damage a vehicle) and if a vehicle damages yours.

This insurance is optional, but some car financing companies may require you to insure your car on both sides.

In this case, it is important to shop around and get advice from several insurers, as you may get a better deal with one insurance policy than another.

The Auto Guide offers this sound advice for two-sided insurance:

“It’s up to you to judge the acceptable level of risk in your situation. In other words, if something happened to your car (accident, fire, theft, vandalism, etc.), would you be willing to pay the full cost?”

Extra protection on your vehicle can give you additional peace of mind, if you take the time to select the right coverage for your car.

How Do You Choose the Best Auto Insurance?

There are many factors that affect the price of your premium, which you will pay monthly.

  • Age
  • Gender
  • Driving record
  • Accident history
  • Where you live and how you use your vehicle
  • The vehicle (type, brand, model, year, equipment, etc.)
  • Vehicle theft statistics (a vehicle that is popular with thieves will increase your premium: do your research beforehand!)

As you can see, there are many factors that are extremely vital in determining your premium.

The most important thing to remember is that you have to shop around for insurance! Take the time to get several quotes from different insurers to make sure you have the best contract to protect your vehicle, but also to protect yourself.

At Financement Auto Laval, we make the process of financing a vehicle easy and convenient.

Located on the North Shore of Montréal, in Laval, your 100% approved auto financing and over 600 cars in inventory are available to you.

For in-house car financing or a 2nd or 3rd chance at credit, we are here to help you.

Posted on Aug 30, 2022

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