Glossary of Automobile Insurance Coverages

Accident benefits: This coverage provides compensation, regardless of fault, if you, your passengers, or pedestrians suffer injury or death in an automobile collision. Accident benefits coverage is compulsory in all provinces except Newfoundland and Labrador. (In Quebec, this is provided by government; see below.)

Third party liability insurance: Third party liability (known as Civil Liability in Quebec) insurance covers you if your vehicle injures someone else or damages his or her property... and you are held legally liable. Should a claim against you be more than your level of coverage, you can be held personally responsible for the balance. For this reason, most drivers purchase more than the minimum coverage required by law: $50,000 in Quebec, $200,000 elsewhere.

First party insurance: This provides Physical Damage coverage (for collision, re, theft, etc.) for your own vehicle. Loss or damage from mechanical breakdown, normal wear and tear, rust, corrosion, and so on is not covered.

Uninsured automobile protection: Uninsured automobile protection is universal in Canada.

Bodily injury: This coverage provides up to $200,000 if you are injured or killed through the fault of a motorist who has no insurance, or by an unidentified vehicle. You receive payment under this protection through the Uninsured Automobile coverage in your policy -- unless the Canadian province, territory or U.S. state where you were injured has a special fund from which to claim. You will be reimbursed for the money you would otherwise be entitled to receive from the uninsured/unidentified motorist.

Damage to your vehicle: Available coverage varies widely, from none in Alberta, to $25,000 in Ontario, $50,000 in Quebec (see below), and as much as $200,000 in provinces such as Manitoba. Some jurisdictions require that the uninsured motorist be identified. See a qualified broker, agent or insurance company service representative for more information.

"Direct compensation -- property damage": In Quebec and Ontario, your own insurer compensates you for the share of the damage caused to your vehicle (including contents) and for your loss of use of your car, for which another driver would be legally responsible. You deal with your own, not the other person's, insurer; this speeds up the payment process. If another identified motorist is responsible for the collision, you can collect from your own insurer regardless of whether or not you have purchased physical damage coverage on your own car. There are rules, however, for Direct Compensation to apply. The collision must occur in your home province; there must be at least one other identified vehicle involved in the crash causing the loss; and that other vehicle must also be insured by an insurer licensed in your province. If these conditions can't be fulfilled, then you'll have to rely on your collision insurance (if you have it), whether or not you are at fault.

Loss of use: This coverage pays a specified daily amount subject to an overall limit for rental of a vehicle while yours is being repaired. This can be used for car rental, taxis or public transportation. If you have All Perils, Comprehensive, or Specified Perils coverage, your policy automatically gives a certain amount of Loss of Use coverage if your vehicle is stolen.