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Car Insurance in Alberta – Beyond the basics

The exercise of buying auto insurance in Alberta can be complicated with so many private companies to choose from. But the experienced brokers at Westland Insurance are able to guide their clients through the maze of details to ensure the policy is right from the start, no matter what the person’s budget is.

“Sometimes people are misinformed or not as knowledgeable as they could be about the insurance options,” says Lea Vadnais, personal lines manager at Westland’s Lethbridge office. “They find all the terminology technical so we try to educate people about what they are buying and why they should buy it. That way they can decide what it is they want to accomplish with their insurance.”

Vadnais explains that Third Party Liability or Public Liability and Property Damage (PLPD) coverage is one of the most important factors in buying auto insurance. “When clients come in and say they only want basic insurance, or PLPD, they think it covers their vehicle for accidents that aren’t their fault. Then they are shocked they don’t have coverage under basic PLPD.”

 

Pennies a day can save a lifetime of anxiety

Different limits of PLPD or Third Party Liability insurance can be selected. “The province requires $200,000 but in the Lethbridge office we prefer to sell a minimum of $2 million coverage,” she says. “The cost for increased coverage is minimal. Even for a young person, such as a new driver who is 16 years old, the difference between $1 million and $2 million in coverage is approximately $200 a year. That’s less than $20 per month.” 

The reason many brokers at Westland recommend securing at least $2 million in liability coverage is to cover court awards for accidents that breach lower liability limits. “We tell people that the courts award damages not based on your liability limit but on the personal injury sustained by whoever was injured,” says Vadnais. “If you have a claim and you are sued for more than the liability limit on your policy, you are responsible to hire a lawyer to defend you for anything above that limit. You will also be responsible for the costs of awards over the limit.”

“You can’t claim bankruptcy and make the bodily injury settlement go away. People may make comments such as ‘I have a 16-year-old kid and he doesn’t have anything, so go ahead and sue him, he’ll just claim bankruptcy.’ If the injured person is permanently disabled, the courts will award a settlement based on that, then they collect from your insurance policy. The courts can also garnish wages for 10 years then reapply for garnishing for as long as they feel necessary. People can still decline the $2 million suggestion and choose a lower liability limit of $1 million but it doesn’t happen very often in our office. Limits higher than $2 million are also available, depending on the insurance provider.”

 

Covering the bases with rentals

When people purchase insurance, they often don’t want to pay a little more for the Loss of Use option (SEF 20) which provides benefits such as a rental car in case their vehicle is damaged in an accident. “Our brokers at Westland teach their customer about the value of something like the SEF 20,” says Heather McKim, Westland’s Regional Branch Manager in Calgary. “People who don’t want to pay the extra $30 for this add-on to the policy are upset when they get into an accident and have to pay daily for rental cars. Again, for pennies a day, this choice can save a lot of anxiety.

For people who frequently rent cars, the Legal Liability for Damage to Non Owned Automobiles (SEF 27) add-on can save them a lot of money because they don’t have to buy the physical damage coverage from a rental car company.”

 

Breaking the law will cost you

For drivers who ignore the rules of the road, such as speeding, driving without insurance or the big one, driving while impaired by alcohol or substance abuse, will pay the consequences.

In the City of Calgary alone, from January to October, 2015 police officers personally issued 155,075 speeding tickets, and sent out another 218,308 tickets through automated enforcement, or photo radar.

Purchasing auto insurance is not only the smart thing to do, purchasing Third Party Liability coverage (PLPD) is required by law. Yet people continue to take chances driving without it, and when they are caught, it is more than just a small fine. “Of the 155,075, we also wrote 2,525 tickets, or 1.6 percent, for people who were driving without insurance,” says Staff Sergeant Paul Stacey of the Traffic Section and Airport Unit in Calgary. “Of that same total, 2,404 people, or 1.5 percent, were given tickets for not having a valid driver’s license.”

There is a strong chance that annual insurance rates will go up with these infractions but another consideration is the courts will assess fines that can go as high as $10,000. “For people who drive without insurance, we write mandatory court tickets,” says Sergeant Stacey. “When the driver goes to court, if they are found guilty, they are assessed a $2,875 fine for their first offence. The situation is worse for those driving without insurance as they will have their vehicle seized and will have to pay for tow truck expenses and storage until they pay to bail the car out of jail, so to speak.”

On the upside, Sergeant Stacey says the number of people arrested for drinking and driving was down 19 percent in 2015 from the 2,568 people who were charged with the same offence in 2014.

 

Take advantage of the Broker Advantage

Rikki McBride, director of operations for the Insurance Brokers Association of Alberta, says they want to encourage the public to consider using a broker because they get the broker advantage. “Brokers work on behalf of their client as an insurance intermediary to find the best product to suit the clients’ needs. Because brokers have access to more than one insurance company, they have an opportunity to find the best fit of products for that particular client. That is something that direct writers can’t offer.” 

Westland Insurance Brokers will also advocate for a client during the claims process.  We are able to make contact with your insurance company on your behalf to assist in clarifying any concerns you may have and work to ensure a fair, prompt claims outcome.

For more information on policies that are right for you, contact a Westland Insurance broker near you.