Car Insurance Coverage Types Canada

Every coverage type on a Canadian auto insurance policy — what it does, what it costs, and whether you need it.

Mandatory Coverage Types

Coverage	What It Pays	Minimum Required
Third-Party Liability	Injuries/damage you cause to others	$200K–$500K (varies by province)
Accident Benefits (SABS)	Your medical, income loss after any crash	Required in ON, AB, Atlantic
DCPD	Your vehicle when not at fault	Required in ON, AB, Atlantic
Uninsured Motorist	Covers you if hit by uninsured driver	Required in most provinces

Third-Party Liability (TPL)

TPL is the foundation of every Canadian auto policy. It pays for bodily injury and property damage you cause to other people. Provincial minimums range from $200,000 (most provinces) to $500,000 (Nova Scotia). However, a serious multi-vehicle crash with injuries can easily generate claims exceeding $1M. Most insurance professionals recommend carrying $1M to $2M in liability — the additional cost is typically $50–$150/year.

Accident Benefits / Statutory Accident Benefits (SABS)

Accident Benefits pay for your own medical expenses, rehabilitation, income replacement, attendant care, and funeral costs after a crash — regardless of who was at fault. The scope and minimums vary by province. Ontario has the most comprehensive mandatory accident benefits in Canada. In BC, Enhanced Care now provides unlimited medical and rehab for injured people through ICBC.

Direct Compensation Property Damage (DCPD)

DCPD applies in Ontario, Atlantic provinces, and Alberta. When another driver is at fault for a collision, DCPD allows you to claim your vehicle damage from your own insurer rather than pursuing the at-fault driver's insurer. This speeds up claims and simplifies the process. It only applies when the collision involves two or more insured vehicles in the province.

Collision Coverage

Collision pays to repair or replace your vehicle when it's damaged in a collision — whether you hit another car, a guardrail, a tree, or roll the vehicle. Collision is optional in Canada but required if you have a car loan or lease (the lender typically mandates it). A deductible applies — typically $500 to $2,000. Your insurer pays the claim minus your deductible.

Comprehensive Coverage

Comprehensive covers damage to your vehicle from non-collision causes: theft, vandalism, fire, flooding, hail, falling objects, hitting an animal, and glass breakage. Comprehensive is highly recommended in Canada given the country's severe weather, high theft rates (especially in Ontario and Alberta), and wildlife hazards in rural areas. Deductibles are typically lower than collision — often $250–$500.

All Perils Coverage

All Perils combines collision and comprehensive into a single coverage with one deductible. It also covers damage caused by someone in your household using the vehicle without permission — a feature neither collision nor comprehensive provides separately. It's often cost-effective compared to buying collision and comprehensive separately.

Specified Perils

Specified Perils is a narrower, less expensive alternative to comprehensive. It only covers the exact events listed in the policy — commonly fire, theft, certain weather events. Anything not explicitly listed is excluded. It suits drivers who want minimal vehicle coverage at lower cost.

Optional Add-Ons Worth Considering

• Loss of Use / Rental Car: Pays for a rental while your car is being repaired after a covered claim. Typically $20–$50/day limit for ~$30–$60/year extra.
• Waiver of Depreciation: For new vehicles — ensures you're paid replacement value rather than depreciated value after a total loss. Usually available within 24–36 months of purchase.
• Accident Forgiveness: Prevents your first at-fault accident from raising your premium. Worth it if you have a clean record to protect.
• Roadside Assistance: Towing, flat tire, lockout, battery boost. Often cheaper through insurer than CAA, but CAA offers more coverage.