For Drivers

Purchasing Insurance

Learn about the different types of auto insurance and ways of purchasing it in Alberta.

To operate private passenger and commercial vehicles in Alberta, drivers must have auto insurance with a minimum of $200,000 in third-party liability and accident benefits coverage.

In Alberta, auto insurance is provided by over 60 private insurance companies.

Types of Auto Insurance Coverage

Auto insurance policies have different types of coverage and benefits. See a description of each below.

Contact your insurance agent, broker, or direct writer to assess your insurance needs.

Basic Coverage – This coverage is mandatory for Alberta drivers operating motor vehicles.

1. Third-Party Liability

If you are responsible for an accident that caused injury or damage to a third party, your third-party liability coverage pays for a legal claim against you.

2. Accident Benefits

Accident benefits cover occupants of a vehicle in the event of injury. Coverage includes medical and rehabilitation costs, funeral expenses, death benefits, and income replacement.

3. Direct Compensation for Property Damage (DPCD)

DCPD covers your vehicle damage, damage to contents, and loss of use when you are not at fault for an accident, or DCPD covers a portion of the repairs based on the percentage you were not at fault for an accident.

To allow for more consumer choice in Alberta, the Superintendent of Insurance released an endorsement to allow you to “opt-out” of DCPD coverage. Go to the DCPD page to learn more.

Additional Coverage – This coverage is optional for Alberta drivers operating motor vehicles.

1. Collision

If your vehicle is damaged from a collision with another vehicle, an object, or the ground, collision coverage pays for your vehicle’s repair.

There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.

2. Comprehensive

Comprehensive coverage is for damage resulting from an event other than a collision, such as hail, vandalism, theft, or fire.

There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs, or deducted from the claims settlement.

3. Specified Perils

Specified Perils coverage is a more limited version of comprehensive coverage. It covers damage from specific events such as fire, lightning, theft, etc.

There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.

4. Endorsements

An endorsement is an attachment that increases or decreases coverage in a standard automobile policy. Some common endorsements include:

  • Comprehensive Cover Limited Glass (known as a SEF 13D) – This limits the coverage on a vehicle’s glass for a reduced premium.
  • Loss of Use (known as a SEF 20) – If your vehicle is damaged and your insurance policy covers the repairs, this attachment provides you with a specified daily dollar amount and a total amount put towards either vehicle rental or the use of taxicabs and public transportation.
  • Legal Liability for Damage to Non-Owned Automobiles (known as a SEF 27) – This extends the physical damage coverage and deductible you have on your vehicle to apply to a rental vehicle as well.
  • Accident Rating Waiver (known as a SEF 39) – This prevents your insurance from increasing during a renewal due to an at-fault accident involving your insured vehicle.
  • Limited Waiver of Depreciation (known as a SEF 43R) – This waives any depreciation on repair or replacement of a new vehicle should it suffer an insured loss (subject to certain restrictions).
  • Family Protection (known as a SEF 44) – This protects you and your family members in your vehicle if you are in a collision with an uninsured or underinsured driver. Even though you may have the right to collect money from an at-fault driver to reimburse you for your claim, it may not be fully paid if that drivers does not carry enough insurance or has no insurance. This endorsement pays the difference between your claim settlement from injuries that arose from the accident and the third-party liability limit of the at-fault driver’s policy up to your third-party liability limit.
Purchasing Auto Insurance

There are two ways to purchase auto insurance. The one you select is a matter of personal preference. They may sell insurance through an office, a call centre or online:

  • Agent – An insurance agent sells the products of one insurance company. The agent provides information about the insurance products and pricing for that company.
  • Broker – An insurance broker has contracts to sell insurance for more than one insurance company. The Insurance Brokers Association of Alberta can help you find a broker in your area.
Things to Consider When Selecting an Auto Insurance Company

When selecting an auto insurance company, there are important factors to consider :

  • Price – Does the insurance company offer a competitive price for its policies? Are discounts available for specific situations like when insuring more than one vehicle or for insuring both auto and home policies?
  • Payment Options – What payment plan options and methods are available? Some may include full payment, instalment payment, monthly payment plan, credit card payment, or online banking.
  • Policy Options –  Auto insurance companies offer a standard policy, along with many different coverage options and endorsements. You should make sure that the coverage type meets your insurance needs.
  • Customer Service – Ask friends and family for referrals to companies with reputable claims and friendly customer service.
  • Convenience – Is the insurance company’s location accessible and are their business hours convenient to you?
  • Time savings – Do you prefer to do your business in person or online? Is one insurance company able to meet all your insurance needs?



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