As a driver, it can often feel like you’re constantly facing a range of risks – accidents, theft, vandalism, and the natural elements – all of which can result in expensive repairs and financial setbacks if you’re not properly insured.
To avoid being caught off guard in an already stressful situation, it’s important to understand what car insurance does and does not cover in Canada. Thankfully, this article includes a detailed list of specific risks and perils that drivers frequently ask about. After reviewing this list, take a close look at your current car insurance policy or any you’re considering purchasing to ensure it provides the coverage you need.
Also, keep in mind that this list offers a general overview. Your exact coverage will depend on the specifics of your policy, so always refer to your insurance documents or consult with your insurer or broker to clarify any details or exclusions.
Accidental damage
Yes, accidental damage may be covered by car insurance. However, to be eligible for compensation, you must have collision coverage, which is considered optional and designed to protect you should you accidentally damage your car in a collision with another vehicle, with a stationary object (ex. guardrail), or with a road hazard (ex. pothole).
Animal damage
Yes, car insurance may cover animal damage, but you must have comprehensive coverage, which is optional, to be eligible for compensation. If you add it and you either hit an animal (ex. A deer, bear, or coyote) or an animal hits and damages your parked car, then it would likely be considered a non-collision incident, and comprehensive coverage would kick in to help cover the damages, up to the limits listed in your policy.
Breakdowns and roadside assistance
No, breakdowns are typically not covered as car insurance is not designed to cover mechanical failures or issues due to wear and tear. However, some insurance providers offer roadside assistance coverage as an optional add-on, which can help cover the towing costs if your car breaks down unexpectedly.
Car theft
Yes, car theft is covered by car insurance but only if you have comprehensive coverage. Although comprehensive coverage is optional, now might be the time to consider adding it to your policy, if you haven’t already, given that car theft in Canada increased 254% in 2023 alone and has been labeled a “crisis” by the Insurance Bureau of Canada.
Cosmetic damage
No, cosmetic damage is typically not covered by car insurance. Insurance policies generally only cover damages that affect the vehicle’s functionality or safety. Therefore, you should assume you are fully financially responsible for fixing any of your car’s cosmetic issues, including scratches, dents, or paint damage.
Death of owner
Yes, if you are killed in a car accident, car insurance may cover the associated costs, including funeral expenses. However, this coverage varies by province and the specifics of your policy. For example, in Ontario, accident benefits coverage is mandatory and provides a lump sum of $25,000 to an eligible spouse, $10,000 to each dependent, and up to $6,000 for funeral expenses, with the option to increase these amounts.
Glass damage
Yes, car insurance can cover glass damage, including your windshield and windows, if you have the appropriate optional coverage. With comprehensive coverage, damage from non-collision events, like debris, would be covered. On the other hand, if the glass is damaged in a covered accident with another vehicle or stationary object, collision coverage would typically handle the repair or replacement costs.
Hit-and-run
Yes, car insurance may be able to help cover the damages caused to your car in a hit-and-run, but you’ll need to have uninsured motorist coverage or collision coverage. Uninsured motorist coverage helps protect you if the at-fault driver is unknown or doesn’t have insurance, while collision coverage covers damage to your car regardless of the other driver’s status.
Injuries
Yes, car insurance covers both injuries you suffer and injuries you cause to others, however, each falls under a different type of coverage. If you or your passengers are injured, accident benefits coverage can help pay for medical expenses, rehabilitation, lost income, and funeral costs. If you injure another driver, their passengers, or pedestrians, then third-party liability coverage would be used to cover their medical expenses, if you’re found to be at fault. These coverages are mandatory in most provinces and territories, though the requirements can vary by jurisdiction.
Key replacement
No, the replacement of lost keys is not usually covered by car insurance. However, if your car and its keys are stolen, that may be a different story. It will depend on the specifics of your policy. If it even is an option, keep in mind that the cost of replacing your keys might be less than your deductible. Additionally, filing a claim will go on your insurance record and could lead to an increase in your premium, which may ultimately cost you more than simply replacing the key yourself out of pocket.
Legal fees
Yes, if you’re involved in a lawsuit resulting from an accident, car insurance can help cover the associated legal fees. Specifically, the third-party liability coverage portion of your policy – mandatory in all provinces and territories – is designed to pay for attorney fees, court costs, and any settlements or judgments from the lawsuit, up to the limit specified in your policy, which typically ranges from one to two million dollars.
Mold
No, car insurance typically does not cover mold damage as it is considered a maintenance issue. Since it is normal for damage caused by neglect or poor upkeep to be excluded, you must take proactive steps to prevent mold growth if you want to avoid being fully financially responsible for the associated costs when problems arise.
Moving trucks
No, car insurance does not typically cover moving trucks. Therefore, it’s advisable to opt for the insurance options provided by moving truck rental companies like U-Haul, as these can protect you against any damage you may cause during your rental period.
Negligence
No, car insurance does not cover damages resulting from your negligence. While your third-party liability coverage may assist in paying for injuries or damages you cause to others due to reckless driving or traffic law violations, it will not protect you from legal consequences or increased premiums stemming from your negligent behavior.
New car
Yes, car insurance can cover getting a new replacement car if yours is written off. However, you typically need to have either collision coverage, which applies if the damage results from a collision, or comprehensive coverage, which protects against non-collision incidents like theft or vandalism. Additionally, the type of coverage you have – whether it’s based on actual cash value, which accounts for depreciation, or replacement cost value, which does not – can greatly affect how much money you receive in a claim for a new car.
Property damage
Yes, car insurance typically covers property damage you cause to others. If you are responsible for an accident that damages another person’s vehicle or property, the third-party liability coverage portion of your policy will help pay for repairs or replacements. Bear in mind though that this does not apply to your own vehicle. For that, you would need collision coverage, which is considered optional.
Pest/rodent damage
No, damage caused by pests and rodents (e.g., mice, rats, squirrels) is usually not covered by car insurance. Since insurers generally consider it maintenance-related, it falls outside the scope of standard car insurance policies, which means you would be responsible for the repair costs.
Occasional drivers
Yes, car insurance typically covers occasional drivers through a provision known as the permissive use clause. This clause allows anyone who has your permission to use your vehicle to be covered under your policy. However, if you plan to let a friend or family member drive your car regularly, rather than just occasionally, it’s highly recommended that you have them added as an occasional driver on your policy to ensure you both are sufficiently protected.
Rust damage
No, car insurance will not usually cover rust damage because it is often considered a maintenance issue, meaning it typically falls outside the scope of standard car insurance policies. Instead, it is expected that vehicle owners maintain their cars and address issues like rust at the first sign to prevent further damage.
Repairs
Yes, car insurance can cover repairs to your vehicle, provided you have comprehensive and/or collision coverage. Comprehensive coverage typically compensates you for repairs resulting from non-collision incidents, while collision coverage applies to damage from accidents involving another vehicle, a stationary object, or a road hazard. Car insurance will not, however, cover routine maintenance or repairs.
Theft of personal items
No, car insurance generally does not cover the theft of personal items from your vehicle. Instead, coverage for stolen personal property typically falls under your home, condo, or renters insurance, regardless of whether the theft occurs inside or outside your home.
Trailers
While the third-party liability portion of your car insurance policy typically extends to trailers while they’re being towed, it will depend on your specific policy. In any case, you should always confirm the extent of coverage before you hit the road and consider adding additional coverage to your existing policy or obtaining a separate trailer insurance policy based on your specific needs and how you plan to use the trailer.
Uber drivers
According to Uber, you are covered by the company’s commercial auto insurance for Uber drivers “if an accident occurs between accepting a trip and reaching the rider’s destination.” Therefore, you must have a personal car insurance policy that meets your province or territory’s minimum requirements to ensure you are covered at all other times when using your vehicle. You should also always notify your insurance company or broker if you plan on using your vehicle for Uber so that it can be recorded on your file.
Vandalism
Yes, car insurance can cover vandalism, so long as you have comprehensive coverage. Comprehensive coverage helps pay for repairs if your car is vandalized, covering damage from acts like keying, broken windows, graffiti, or other forms of malicious damage. Without it, you will be fully financially responsible for paying for the necessary repairs out of your own pocket.
Water damage
Yes, water damage may be covered by car insurance. However, to be eligible for compensation, you must have comprehensive coverage, which is considered optional and would help in the event your car is damaged by flooding, heavy rain, or water entering your car during a storm. However, if the water damage is the result of neglect or poor maintenance, like leaving your windows open during rain, it likely won’t be covered.
Weather damage
Yes, car insurance can cover weather-related damage, including hail, windstorms, and ice storms, if you have the appropriate optional coverage. With comprehensive coverage, damage from non-collision events, like hailstones denting your car or a tree branch falling during a windstorm, could be covered up to the limit listed in your policy. However, if the damage occurs due to neglect, such as leaving your vehicle exposed or unsecured during a storm, it’s likely that the damage won’t be covered.