How does car insurance work?

If I insure my car and make an accidwnt that is my fault, my inaurance pays for the damage i did to him and myself or does each others insurance covers themselves?

If it’s your fault then your insurer will pay.

You need fully comprehensive cover if you want your car covered as well

That’s how it is in the UK, but may be different dependent on where you’re from

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Here in California, by law, drivers are required to have car insurance. At the minimum, we have to have coverage that will pay another drivers damages and medical bills if you cause an accident. After that, you can get more insurance that will cover your own damages. The more coverage you get, the more you pay. You can get theft insurance but it costs more.

I’ve been driving since I was 17 and I have never gotten more than the minimum coverage that is required by law.
I’ve had a few accidents but only two were my fault and my insurance company only had to pay out twice. I’ve never had coverage that would pay for my own car if I got in a wreck.

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I keep full coverage on everything. I have never had one my fault that caused damage but once I had a driver with no insurance almost hit me head on. And another time the other insurance company wanted me to drive my damaged car about 30 miles so they could quote it. I brought it straight to the dealer and had it repaired.

It had damage to the suspension so I had my insurance cover the cost with my comprehensive and then they collected from them afterwards. I have a really good insurance company. They take good care of me.

If your car is financed you have to have full coverage.

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This depends on whether you live in a “no-fault” jurisdiction or not. Some provinces in Canada (e.g. British Columbia) are no-fault and each company pays out for their side of the accident. Damages are limited to set values for set injuries and the Actual Cash Value (ACV) of the destroyed property. The driver who caused the accident will be rated for it and premiums adjusted upwards in the future.

In Alberta, my province, fault is designated for the accident and the insurer for the responsible party pays all costs. They will pay for the damages to the third party you are liable for, and they will also pay for your costs if you purchased physical damage coverages for your vehicle (Standard Policy Form 1, Section C Physical Damage here). You will be rated for the accident and your premiums will go up unless you had the foresight to purchase Standard Endorsement Form (SEF) 39, Accident Rating Waiver. That allows you to have one oops without being rated for it, but you have to keep your nose clean for six years after. If you have a second accident, you’ll be rated for it and also the first as the waiver is voided.

Anyhow, what I’ve shared is specific to the jurisdiction I’m licensed for. You should seek the guidance of a licensed broker in your own jurisdiction as laws and insurance wordings vary by region.

We encourage everyone to purchase SEF 44, Family Protection. That is an extension that guards against uninsured or underinsured drivers. It allows you to access your own third party liability limit (TPL) as if it belonged to the other person. Even though they only have $200,000 (minimum required) in TPL, you can use your own $2,000,000 in TPL (what I have) as if it was theirs without being rated for it yourself. Your company will attempt to reclaim the amount (called subrogating) from the responsible party later, leaving them financially ruined for life.

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