The word itself, ‘comprehensive,’ carries the definition, “covering completely or broadly.” In a general sense that’s accurate, but in an insurance application, it overstates things somewhat. In most cases in the Canadian insurance market, comprehensive coverage is an optional product, subject to deductibles, that covers many hazards – called ‘perils’ in the insurance business – other than those occurring while a car is driving and in a collision.
What does comprehensive car insurance cover?
Basically, comprehensive claims stem from non-collision incidents. However, the distinction can be somewhat tricky to motorists. For example, a van in Ottawa was swallowed up by a sinkhole, early in 2016. Though there was no particular collision in this case unless you count the van “colliding” with the bottom of the sinkhole that incident was covered by the owner’s collision insurance, not comprehensive.
Another non-intuitive example is hitting an animal. If the animal is already on the road and a driver is unable to avoid it, an insurance claim would typically fall under collision coverage. If, on the other hand, an animal jumps in front of that driver’s vehicle, it becomes a comprehensive claim.
Let’s use Ontario for an example. The Financial Services Commission of Ontario oversees the province’s insurance industry. They describe non-collision based insurance like this:
- Specified Perils pays for loss or damage caused by:
- Theft or damage caused by an attempted theft
- Lightning, wind, hail or flooding
- Civil disturbances and rioting
- An airplane falling, landing or losing parts
- Damage to any vehicle from any mode of transportation used to carry the insured vehicle, including trains or boats
- Comprehensive coverage includes all of the incidents under Specified Perils and adds:
- Flying or falling objects
- All Perils coverage combines comprehensive insurance with collision coverage. It includes two more scenarios not covered elsewhere:
- Theft of the insured vehicle by someone living in the insurance owner’s home
- Theft by an employee who drives, services or repairs the insured vehicle
Is comprehensive insurance subject to deductibles?
The short answer is yes. The amount of a driver’s deductible determines two things. First is how much comprehensive coverage costs. Drivers carrying low deductibles pay higher premiums since the insurance company adopts more of the financial responsibility after a claim. Those with higher deductibles take on more of the costs after an incident, so their premiums are lower.
Do I have to carry comprehensive coverage?
Comprehensive coverage is not a requirement for minimum mandatory insurance coverage in Canada. However, if you borrowed money to purchase your vehicle, the bank or other lending agency may insist on both comprehensive and collision coverage on your vehicle during your payment period. This reduces the likelihood of loss all around after an accident.
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