The specific laws regarding insurance in Manitoba can be quite involved.The FAQ section provided by Manitoba Public Insurance (MPI) in their website does a good job in covering the majority of commonly asked questions.
What is liability insurance?
Liability covers bodily injury and property damage to others if you are determined responsible for an accident, even if you are not driving. Owning the vehicle and lending it to someone else constitutes responsibility. Liability coverage also pays for legal fees if you are sued as a result of an accident.
What is comprehensive coverage?
Comprehensive coverage pays for damage to your vehicle that is not caused by an accident with or without another vehicle. Natural events - fire, wind and flood - are included, in addition to theft and vandalism. Damaging encounters with animals are included as well.
What is collision insurance?
Collision pays for damage to your vehicle in the event of an accident, regardless of whether or not another vehicle is involved.
How are insurance rates determined?
Many different factors contribute to the final insurance rate. Generally, these pieces fall into the following categories:
- Personal information? Age at which a driver's license was first obtained and your driving record
- Family information? Other primary drivers, other occasional drivers and their driving histories
- Vehicle information? Year, make, model, primary use (pleasure/work), how often the vehicle is driven to work or school, business use of the vehicle, how long you've owned the vehicle, factory safety equipment, presence of an alarm/immobilizer system, expected annual mileage and postal code at which the vehicle is normally parked
- Desired coverage? Limits on liability and whether or not comprehensive and collision are chosen
If I make a claim, do I lose my discount?
This is one of the most common questions and one that is easily misunderstood. Your insurance discount is based on a stepped discount system based on the number of years without an 'at fault' accident.
Why is the parking postal code required?
Insurance companies want to know where the vehicle is kept most of the time and if it garaged, driveway parked or street parked. Areas with higher crime will contribute to higher comprehensive rates than those with lower crime and so on.
What is a premium?
A premium is just another name for the rate charged by MPI or your insurance.
What is a deductible?
A deductible is a fixed amount of money you pay for each insurance claim. For example, choosing a deductible of $500 per accident means that for each accident you pay that amount before the insurance pays. If you chose to add comprehensive or collision you can vary your rate by adjusting your deductibles. High deductibles result in lower rates, while low deductibles often mean higher rates.
What if the claim is below the deductible?
You pay the full cost of the claim if it is below your deductible amount. If you carry a $1,000 deductible for collision and a minor accident causes $700 in damage, you are fully responsible for the cost.
What is a write-off or a total loss?
When the cost to repair the vehicle is more than the cost to replace it, the vehicle is generally considered a write off or total loss. Insurers pay the cost of replacing the vehicle with a similar make and model to that lost.
Tips for reducing insurance premiums
While reducing liability coverage and raising deductibles may lower premiums, there are other ways to lessen your rates without sacrificing any coverage.
Keep a clean record
Generally, the longer you go without an at fault accident the better your insurance discount. At the least, keeping a clean record will prevent surcharges from being added to your premium.
Choose a suitable vehicle
Certain vehicles are cheaper to insure depending on their characteristics. Selecting a vehicle that suits your lifestyle is the best way to ensure you aren't paying a premium for a type of vehicle that might not be necessary.