News & Resources

Is It Time to Drop Your Collision and Comprehensive Coverage?

Oct. 1, 2021
3 mins
An older green car sits parked in a driveway

This article has been updated from a previous version.

Auto insurance coverage is mandatory across Canada. The amount and type of coverage you need, however, varies by province and territory.

In Ontario, drivers must have third-party liability, accident benefits, uninsured automobile and property coverage.

These insurance options typically handle insured damages for drivers who are injured or have injured someone else, their passengers, and property in the event of a collision. But they don’t cover weather-related damages or your vehicle.

Optional insurance coverage

To protect your vehicle from other perils, you may have collision and comprehensive coverage, which are optional.

Comprehensive coverage typically includes:

  • Weather-related damage (hail, wind and debris, fallen tree)
  • Fire or natural disaster
  • Theft
  • Vandalism
  • Collision with an animal (deer, etc.)

Collision coverage typically includes:

  • Collision with another vehicle
  • Collision with an object (fence, tree, guardrail)
  • Single-vehicle accident (rollover)

These types of coverage are typically recommended for newer vehicles because of their cost, while some leased vehicles are required to have them by their leasing company. However, as your vehicle gets closer to the end of its lifespan, you may want to consider dropping comprehensive and collision coverage.

car mascot.png

Don't waste time calling around for auto insurance

Use RATESDOTCA to shop around, and compare multiple quotes at the same time.

Things to consider before cancelling your coverage

Before you call up your insurance provider and outright cancel your policy, you may want to determine if this is the best choice for you.

Your vehicle’s value

First, determine how much your vehicle is worth. Your car’s age, make, model, accident history, and kilometres can factor into its value. If you have a high-value vehicle, these optional coverages can help cover the unexpected costs of repairing or replacing it.

Your driving history

If you have an older vehicle and a squeaky-clean driving record, you may decide to forgo additional coverage. But if you have been in a collision or two, you may want to have this safety net.

Your location

Some locations have higher rates of crime and claims. If you live in an area known for car thefts, you may want to retain your coverage. This may also be the case if you have a long commute. Being on the road longer increases your risk of being involved in a collision.

Your deductible

Your deductible will determine how much money you may receive from your insurance provider in the event of a collision. If you have a $500 deductible and a $1,300 car, the most you will see from your insurance company will be $800 if you make a claim.

Additionally, you may want to consider your annual premium. Your insurance contract should break down any additional endorsements, so you will be able to see how much you pay for both collision and comprehensive coverage.

If you are paying $200 year over year for these coverages, you could be putting that aside in a “new car fund” instead. You may want to consider this if having these make financial sense for your circumstances.

Your emergency fund

If paying out of pocket would cause you to lose sleep, you may want to keep your coverage. But if you have enough money in your emergency fund to cover the cost of replacing your car, then you may decide to drop your collision and comprehensive.

The value of your car will only decrease with time, so the amount of money that your insurance company will pay out will also be lower.

Your comfort level

Lastly, consider your comfort level. If you are secure with taking on the risk of not having these coverages, it may end up saving you money in the long run. However, if you have doubts or want the additional safety net, your premium and deductible are a small price to pay to put your mind at ease.

Speak with your provider

If you are uncertain about how your deductible works or have any questions, your auto insurance provider or broker is there to help. Consider all your options and determine which one suits your needs.

Hayley Vesh

Hayley Vesh is a creative, resourceful, and knowledgeable content producer who is passionate about financial literacy, storytelling, and generating ideas. She writes about credit cards, savings, debt management, and personal finance. In her spare time, Hayley can be found wandering in the woods, hunting for second-hand treasures, or curled up with a steeped tea and a good podcast.

Latest auto articles

What Is an Insurance Grace Period?
Falling behind on your insurance bill can be stressful and costly. Here’s what you need to know about the insurance grace period.
Speeding Tickets May Cost You More Than You Think
Traffic violations can affect your insurance premium. Find out how much they could cost you, and what to do about it.
Will My Car Insurance Cover Damage Discovered After Filing a Claim?
It’s rare to find additional damage after a claim has been settled and repairs done. But if it happens, here are your options.