There is a lot of misinformation that circulates regarding the purchase of car insurance. While mandatory car insurance coverage in Alberta cannot be denied to you, insurers have the right to deny optional coverage.
Mandatory Car Insurance in Alberta
The Government of Alberta mandates that all drivers carry the following insurance:
– Third-party liability insurance: This coverage helps pay for bodily injury and/or property damage if you are at fault or partially at fault in an accident. It also includes legal expenses.
– Accident benefits: This includes medical, disability, death, and funeral expense benefits.
– Direct compensation for property damage insurance: This coverage pays for damage to your own vehicle if you are not at fault or partially at fault in an accident.
Optional Car Insurance in Alberta
Optional car insurance refers to coverage beyond the mandatory minimum required by the Government of Alberta. This includes:
– Collision coverage: This coverage assists with the cost of repairing your property if you are at fault or partially at fault in an accident.
– Comprehensive coverage: This coverage helps pay for damage to your property caused by covered perils such as hit-and-runs, hail, or theft.
– Loss of Use coverage: This coverage ensures that transportation costs, such as a rental car, transit, or taxi, are covered while your vehicle is being repaired after a covered claim.
Why Might I be Denied Optional Auto Insurance Coverage?
There are eligibility requirements for certain types of coverage. For example, to qualify for a claims-free discount or disappearing deductible coverage, you may need to have no claims within a specific period of time. Or your car may need to be manufactured within a specific timeframe to be eligible for a depreciation waiver or guaranteed replacement cost loss settlement.
However, for more standard optional coverages, there are only a few scenarios where you may be denied:
1. If you have been cancelled by a previous insurer due to non-payment, misrepresentation, or other serious abuse.
2. If you have a criminal conviction related to driving, such as impaired driving or driving while suspended or without a license.
3. If you have multiple serious driving infractions (tickets), such as leaving the scene of an accident, speeding over 50km/h over the limit, careless driving, or distracted driving.
4. If you have a high number of claims. The more recent these incidents, the higher the likelihood of being denied coverage. Major violations and claims typically stay on your record for five to ten years, depending on the insurer.
Other Cases of Being Denied Auto Insurance in Alberta
There are a few other scenarios where you may be denied car insurance in Alberta:
1. If you do not have a permanent address in Alberta.
2. If you do not have a driver’s license.
3. If you do not have a bill of sale, lease agreement, or vehicle registration for the car you wish to insure.
4. If you fail to provide a passing vehicle inspection report or out-of-province inspection report, if required for the car you want to insure.
Failure to provide the requested information, including the scenarios mentioned above, can result in denial of both mandatory and optional auto insurance coverage in Alberta. To get an auto insurance quote in Alberta, speak to one of our brokers who can guide you through the process and address any questions you may have.
