Insuring Your Vehicle In Alberta

To insure a vehicle in Alberta, you must first purchase car insurance. Basic automobile insurance is required by law in Alberta and includes accident benefits and third-party liability coverage. Additional insurance coverage, such as collision and comprehensive insurance, is not mandatory but can be added to your policy. Once you have obtained the necessary insurance coverage, you will need to register your vehicle at a registration office, providing proof of ownership, valid insurance, and identification. It is important to note that all drivers in Alberta are legally required to have auto insurance, and driving without insurance can result in fines, suspension of your driver's license, or even jail time.

Basic insurance requirements

The mandatory coverages are:

• Liability car insurance
• Accident benefits coverage
• Direct compensation - property damage coverage

Liability insurance protects drivers who cause car accidents by helping to pay for medical bills, repair bills, or legal fees incurred. Accident benefits coverage covers medical fees if someone involved in an accident suffers bodily harm and requires medical attention. This type of coverage can be claimed on behalf of the policyholder or someone else who was harmed in the accident, such as a passenger or pedestrian. Direct compensation - property damage coverage compensates policyholders for the cost of property damage if their vehicle is damaged in an accident, as long as they were not at fault.

In addition to the mandatory coverages, there are also optional coverages that drivers can choose to add to their policies. These include collision coverage, comprehensive coverage, accident forgiveness coverage, waiver of depreciation, and loss of use coverage.

It is important to review your policy carefully and understand the limits of your coverage to ensure you are adequately protected.

Mandatory and optional coverages

In Alberta, Canada, car insurance is purchased from individual insurance companies, and certain coverages are mandatory for all drivers.

Mandatory Coverages

Third-Party Liability Insurance is the primary mandatory coverage in Alberta. It is a legal requirement for all drivers in Alberta to have at least $200,000 in Third-Party Liability Insurance, though many drivers opt for higher limits of $1 million or $2 million for better protection. This insurance covers you if you injure someone or damage their property, and it will also help cover your legal expenses if you are sued after an accident.

Accident Benefits is the second type of mandatory coverage in Alberta. It provides financial protection if you are injured in a collision, regardless of who is at fault. This includes covering medical and rehabilitation expenses, funeral expenses, and compensation for your surviving family members if you pass away.

Direct Compensation Property Damage (DCPD) is the third mandatory coverage in Alberta. Implemented on January 1, 2022, DCPD covers the cost of repairing or replacing your vehicle if it is damaged in an accident, whether you are fully or partially at fault. If you are not at fault, DCPD will cover the full cost, but if you are partially at fault, you will have to pay the remaining balance out of pocket unless you have collision coverage as part of your policy.

Optional Coverages

Collision coverage is an optional coverage that pays for repairs to your vehicle when it is damaged in an accident with another vehicle or object. This type of coverage usually comes with a deductible, which is an amount you have to pay out-of-pocket before your insurance covers the remainder.

Comprehensive coverage is another type of optional coverage that covers non-collision-related damage to your vehicle, such as theft, vandalism, fire, or natural disasters like hail. Similar to collision coverage, comprehensive coverage also typically comes with a deductible.

Specified Perils coverage is a more limited version of comprehensive coverage, as it only covers damages caused by specific perils named in your policy, such as fire or theft.

Other optional coverages include rental car or loss-of-use coverage, which pays for a rental car or alternative transportation if your vehicle is being repaired due to damage or loss covered by your policy; family protection endorsement, which provides coverage for you and eligible family members in the event of injury or death caused by an uninsured or underinsured motorist; and limited waiver of depreciation, which ensures that no depreciation is applied for a specified period if you have a newer vehicle and it is deemed a total loss, meaning you will be reimbursed for the full value of the vehicle as if it were new.

When considering optional coverages, it is important to think about your personal needs, the value of your vehicle, your financial situation, and your risk tolerance.

Documents needed for registration

To register a vehicle in Alberta, you must first obtain car insurance. Once you have insured your vehicle, you will need to gather the following documents:

• Proof of ownership document: This can be a lease, bill of sale, probated will, or letters of administration.
• Proof of valid insurance for the car: The insurance document must include the name(s) of the person(s) requesting the registration.
• Valid identification: A driver's license is required.
• Out-of-province, salvage, or commercial inspection (if applicable): If the car was purchased outside of Alberta or is a used vehicle, an inspection may be necessary.

In addition, ensure that any outstanding fines are paid, as these can impact the registration process. For individuals under 18 years of age, parental or guardian consent is required for registration.

How to save money on insurance

There are several ways to save money on car insurance in Alberta. Here are some tips to help keep your insurance rates as low as possible:

• Only submit a claim when necessary. Car insurance is intended for significant, catastrophic events that exceed your coverage deductible. Submitting claims for minor incidents increases insurance costs for everyone.
• Drive safely and follow the rules. Defensive driving can help reduce the number of collisions on the road, especially in areas with challenging weather conditions like Calgary and Edmonton.
• Avoid missing payments. Payment reminders or automatic withdrawals can help prevent missed payments, which can lead to higher costs in the long run.
• Don't switch insurers too frequently. While switching insurers may sometimes lead to lower rates, your rates could also increase after the first year or when the new business discount ends. Consult an insurance broker to determine if switching is financially beneficial.
• Remain insured. Even if you only have the minimum third-party liability coverage required by law in Alberta, it will help keep your insurance rates lower.
• Raise your deductible. Increasing your deductible will lower your insurance rates. While this means paying more upfront in the event of a claim, you'll save money over time.
• Install anti-theft devices. Some insurance companies offer discounts for security and anti-theft devices, making your vehicle less of a target for thieves.
• Equip your vehicle with winter tires. Winter tires improve traction and safety on icy roads and can lead to insurance discounts.
• Bundle your insurance. Insurance companies often provide discounts for multi-vehicle policies or when you bundle car insurance with other types of insurance, such as home or business insurance.
• Ask about auto insurance discounts. Various discounts may be available, such as those for good students, alumni or professional associations, loyalty, or group memberships.
• Review your coverage before renewing. Analyze your coverage annually to determine if any modifications are needed to reflect your changing needs. This can help prevent paying for coverage you no longer require.
• Get winter tires for your car. In addition to enhancing safety, installing winter tires may make you eligible for discounts from your insurance provider.
• Attend driving school. Enrolling in and graduating from an approved driving school can lead to insurance discounts, especially for young or new drivers.
• Improve your safe driving habits. Maintaining a clean driving record by following local traffic laws and practicing safe driving habits can help keep your insurance costs down.
• Choose a hybrid or electric vehicle. Insuring hybrid or electric vehicles may be cheaper than insuring other car types, and some insurance companies offer discounts for these environmentally friendly choices.

By following these tips and consulting with an insurance broker or advisor, you can effectively manage and reduce your insurance costs in Alberta.

The insurance buying process

To drive a vehicle in Alberta, you must purchase an auto insurance policy that meets the province's minimum requirements. The provincial government legally requires all Alberta motorists to purchase auto insurance coverage. Basic automobile insurance (accident benefits and third-party liability) is required by law in Alberta.

When buying car insurance in Alberta, you must ensure that you purchase coverage that complies with local laws and meets your needs. There are a mix of mandatory and optional coverages available. The mandatory coverage types are:

• Third-party liability coverage: This protects drivers who cause car accidents. If you are found liable for an accident that resulted in bodily harm or property damage to another, liability insurance will help pay for the medical bills, repair bills, or legal fees incurred. The compulsory level of liability coverage in Alberta is $200,000.
• Accident benefits coverage: This covers medical fees if someone involved in an accident suffers bodily harm and requires medical attention. This type of coverage can be claimed on behalf of the policyholder or someone else who was harmed in the accident, like a passenger or pedestrian.
• Direct compensation - property damage coverage: This can compensate policyholders for the cost of property damage if their vehicle is damaged in an accident, as long as they were not at fault.

Optional coverage types include collision coverage, comprehensive coverage, accident forgiveness coverage, waiver of depreciation, and loss of use coverage.

To begin the insurance buying process, contact an insurance advisor and let them know that you wish to purchase auto insurance coverage. They will inform you of the information and documents you need to provide. Generally, you should be prepared to provide a copy of your driver's license and the bill of sale or lease agreement for the car you want to insure. If you bought your car outside of Alberta, you may also need to undergo an out-of-province inspection.

Once you've gathered your documents, an Alberta insurance broker will shop around for coverage on your behalf, comparing quotes to find you the best rate. They will then present you with multiple options, explain each one, and let you pick the one that suits you best.

Frequently asked questions