Getting Insurance

In Alberta, automobile insurance is provided through a private delivery system by private insurance companies. There are approximately 70 insurance companies that write automobile insurance (private passenger and commercial automobiles). The minimum requirement to operate a private passenger and commercial automobile is $200,000 third party liability coverage and accident benefits coverage.

Map of Private vs Public Insurance Delivery in Canada

Types of Automobile Insurance Coverage

There are different types of coverage and benefits available through an automobile insurance policy. The principal coverage is listed below; you can consult an insurance professional for a thorough assessment of your insurance requirements.

Basic Coverage - This coverage is mandatory for operating a motor vehicle.

  1. Third Party Liability.

    Liability coverage pays for a legal claim against the policyholder in the event that he or she is in some way responsible for an accident that causes injury or damage to a third party. The minimum limit requirement is $200,000.

  2. Accident Benefits.

    Accident Benefits cover occupants of a vehicle in the event of injury. Coverage includes medical/rehabilitation costs, funeral expenses, death benefits, income replacement.

  3. Direct Compensation for Property Damage.

    DCPD covers your vehicle damage, damage to contents and loss of use in the event you are not at fault for an accident, or a portion of the repairs based on the percentage you were not at fault for an accident.

Additional Coverage - This coverage is optional.

  1. Collision.

    Collision coverage pays for the repair of a policyholder's vehicle if the vehicle is damaged in an accident caused by collision with another object or upset. There is usually a deductible amount indicated for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.

  2. Comprehensive.

    Comprehensive provides coverage for damage resulting from other than a collision, such as hail, vandalism, theft or fire. There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.

  3. Specified Perils.

    Specified Perils coverage is a more limited version comprehensive that covers damage arising from named perils of fire, lightning, theft, etc. There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.

  4. Endorsements.

    An endorsement is an attachment to a standard automobile policy that increases or reduces coverage under the standard policy. The more common endorsements include:
    • Comprehensive Cover Limited Glass (SEF 13D). This limits the coverage on a vehicle’s glass for a reduced premium.

    • Loss of Use (SEF 20). Provides for the rental of a vehicle or the use of taxicabs and public transportation to a specified daily dollar amount and total amount in the event your vehicle is damaged due to a loss covered by the insurance policy.

    • Legal Liability for Damage to Non-Owned Automobiles (SEF 27). Extends the physical damage coverage and deductible that you have on your personal vehicle to a rental vehicle.

    • Accident Rating Waiver (SEF 39). This endorsement protects the renewal premium from increasing as a result of an at-fault accident involving the vehicle to which the endorsement applies.

    • Limited Waiver of Depreciation (SEF 43R). This endorsement will waive any depreciation on repair or replacement of a new vehicle (subject to certain restrictions) should it suffer an insured loss.

    • Family Protection (SEF 44). Protects you and family members in your vehicle if you are involved in a collision with an uninsured or underinsured driver. Even though you may have the right to collect money from an at-fault driver to reimburse you for your claim, if that driver doesn't carry enough insurance or has no insurance at all, your claim may not be fully paid. The SEF 44 pays the difference between your claim settlement amount for injuries arising from the accident and the third party liability limit of the at-fault driver's policy up to your own third party liability limit.

Purchasing Automobile Insurance Coverage

There are three ways to purchase automobile insurance. Which one you select is a matter of personal preference.

  • Agent

    An insurance agent sells the products offered by one insurance company. The agent can provide information about the insurance products and pricing for that one company.

  • Broker

    An insurance broker has contracts to sell insurance for more than one insurance company. To locate a broker, visit the Insurance Brokers Association of Alberta website.

  • Direct writer

    A direct writer insurance company has its own sales employees to sell its policies through an office or call centre. A number also sell coverage through the Internet.

Things to consider when selecting an insurance provider

Although price is certainly an important factor when selecting a provider, there are other factors that should be considered:

  • Automobile insurance companies offer a standard automobile policy, along with a variety of optional coverage that can be added to the policy by endorsements. A consumer should ensure that the coverage offered meets their insurance needs. For example, not all insurance companies may offer road side assistance coverage.

  • Reputable and friendly customer service and claims service. Ask friends and family for referrals.

  • Convenience. Are the insurance provider’s location accessible and business hours convenient to you?

  • Time saving. Do you prefer to transact business in person or over the Internet? Is the one insurance provider able to meet all insurance needs, e.g., automobile, home, etc.?
  • Premium. Is the insurer offering a competitive premium? What discounts are available? Companies offer a discount for insuring more than one vehicle and some also offer a discount for insuring both automobile and property policies.

  • Payment Options. What type of payment plan options and methods of payment does the insurance company offer? Several options available include full payment, installment payment, monthly payment plan, credit card payment and online banking.