What is a deductible?

The deductible is the portion of a covered loss that is your responsibility. The deductible, when applicable, applies to each covered loss. Although deductibles vary, they are typically available in amounts such as $500 or $1000.

For example, if you had a $500 deductible, you would need to pay $500 of the covered loss.

Higher deductibles lower your premium but increase the amount you must pay out of your own pocket if a loss occurs. Ask yourself how much you are willing to pay on short notice in order to save on premium.

Who does my auto insurance policy cover?

Your policy usually covers:

• You and your spouse
• Other relatives who live primarily in your household
• Other licensed drivers who have permission to drive one of your covered vehicles.

Coverages are broken down, according to purpose, but are generally combined into one policy.

Most Common Coverages

Liability

Auto Liability pays damages due to bodily injury and property damage to others for which you are responsible.

Auto Liability falls into two categories:

• Bodily injury damages include medical expenses, pain and suffering, and lost wages.
• Property damage includes damaged property and loss of use of property.

If you are sued, it also pays your defence and court costs. Laws usually determine minimum amounts, but higher amounts are available.

Personal Injury Protection

This coverage is required in some (no-fault) provinces, it is optional in others. It pays you or your passengers, regardless of fault, for medical treatment due to a car accident. It may also pay for rehabilitation, lost earnings, replacement of services (child care if a parent is disabled, for example) and funeral expenses. Minimum amounts are usually set by provincial law.

Medical payments

This coverage is available in non-no-fault provinces and pays regardless of fault. It pays for an insured's reasonable and necessary medical and funeral expenses for bodily injury from a car accident. Generally, $1,000 minimum amounts are offered; higher amounts are available. It may be supplemented with other coverages that pay for loss of earnings, total disability or death.

Collision

This coverage pays for a covered car damaged by collision with another object or by upset of the car. A deductible is required.

Comprehensive

This coverage pays for loss of or damage to a covered vehicle, except loss caused by collision or upset. Examples include loss caused by fire, wind, hail, flood, vandalism, theft or impact with an animal. A deductible may apply.

Uninsured motorist

This coverage pays damages when an insured is injured in a car accident caused by another person who does not have liability insurance. Application of this coverage varies by province and depends upon policy provisions.

Underinsured motorist

This coverage pays damages when an insured is injured in a car accident caused by another person who has insufficient liability insurance. Application of this coverage varies by province and depends upon policy provisions.

Other optional coverage:

• Car rental

Please note that the above coverage descriptions are simply general information. They are not statements of contract. To learn more about auto insurance in your province, contact your State Farm agent.