Everything To Know About Your Deductible.
We all have deductibles for our car insurance in Manitoba, but do you really know what you’re covered for? Many people choose their deductible years ago and keep it the same each renewal year. Here’s everything you need to know about deductibles to ensure that you’re properly covered!
What is a deductible?
Starting off simple, a deductible is an amount that you have to pay for MPI or a private insurance provider will pay for a claim on your vehicle. So, if you have a $200 deductible for example and you have a fender bender, you have to pay that $200 in order to get your vehicle repaired. Since some repairs can be very costly, deductibles save us a lot of money in order to get the repairs needed at a reasonable cost. The basic deductible in Manitoba is $500, which is included in all basic vehicle policies, and it is up to the customer to purchase a lower deductible in order to have better coverage.
What is the difference between the deductible amounts?
Look at it this way, the lower the deductible, say $100, the more it will cost annually, however, the more perils (risks) covered. Alternatively, if you choose a higher deductible such as the basic $500 it will cost less annually but fewer perils are covered and it can lead to being more expensive if you have to submit claims. Tip: if you have multiple claims such as a windshield that needs to be replaced and vandalism you have to pay for both deductibles. Depending on what deductible you have you could be paying $500×2=$1,000 or $100×2=$200. Needless to say, it can add up.
What does each deductible level cover me for?
This table is great for explaining what you get for each deductible option.
Type of Claim
Collision with Animal
Comprehensive (fire, partial theft of vehicle, hail)
Depending on what is most important to you or the types of driving you’re doing will impact what deductible you choose. For example, if you are doing a lot of highway driving you may want to stay away from the basic $500 deductible since if you do happen to have damage to your vehicle due to an animal you will have to pay $500 opposed to lower deductibles in which it is covered with a $0 deductible. If you have a lower deductible all you would have to do in that instance is put the claim in with MPI and it would be repaired. Now let’s imagine you live in downtown Winnipeg and do minimal highway driving. Collision with an animal is not going to be very likely, however, vandalism might be. In that case, you may want to look into the $200 or $100 deductible as vandalism requires $0 to put in the claim.
How much does this coverage cost?
The next question on everyone’s mind, and the answer is…it depends. Your deductible premium is mostly based on the premium rating on your vehicle. All vehicles are lumped into the specific make and model based on many factors such as the cost of parts if repair is needed, past statistics on accidents, as well as other factors. Another factor that is used to determine the price is your driver safety rating. This is the number of merits or demerits that you have. The more merits the higher the discount. Alternatively, if you don’t have any merits you will not receive a discount. It definitely pays to drive safe! If you are thinking about purchasing a vehicle and are curious about how much the insurance will cost, you can use MPI’s insurance calculator which will give you an idea of what you can expect.
When does car insurance deductible apply?
Your deductible applies when you need to submit a claim or have a claim submitted by another Autopac insured driver. Whether that is paying your deductible to get your windshield replaced or you have significant car damage, your deductible applies to all. Each incident of loss requires a deductible. For example, if you have a crack in your windshield and then someone sideswipes your vehicle that would require two claims be entered and therefore two deductibles.
Do you have to pay the deductible if you are not at fault?
If you are in an accident with another Autopac insured driver who is found to be at fault, MPI will reimburse your deductible. If the accident is found to be 50/50 fault, you will get half of your deductible back.
Do you have to pay the deductible if you are at fault?
Yes, if it is determined that you’re at fault for the accident you will be required to pay for your deductible.
Ultimately the decision is up to you. You know your driving history and past experience the best. It may make sense to stick with the basic deductible based on the use of the vehicle, or in some cases, it may make more sense to purchase a lower deductible for a car that is being used on a more regular basis. Keep in mind if you are choosing to reduce your coverage you will be charged a $15 reduction fee. Whatever you choose, make sure you are properly covered! If you have further questions don’t hesitate to contact us, we would love to help you out with your insurance needs and questions!
Monthly or Annual Auto Insurance Premium: Which Is Best?
Have you always paid the same way for your insurance and never thought anything of it? There may be a better way to purchase your insurance that can save you some money! First off let’s look at the difference between a short-term policy (30-day minimum to 244-day maximum) and annual. Short-term policies can be beneficial to those who don’t need continuous coverage, however, if you keep renewing every month or so you could end up paying much more in the end. Here’s why: every time you create a policy there is a $15 admin fee that is charged, whether that a short-term or annual. If you come in every month and renew your short-term policy, you are paying $15 each time as opposed to paying it only once with an annual policy. Switching to an annual policy could save you $165 per year.
If you carry a short-term policy and only need coverage for a specified period of time, here are a few things to note. First, short-term policies are non-refundable. Meaning that if you were waiting to sell your car and bought two months of insurance and sold it a week later, you will not get that money back. Second, all short-term policies have to be paid in full. Finally, you will not receive any renewal reminder that your insurance is due therefore it is up to the customer to remember when insurance runs out.
If you choose an annual policy, you have three options for payment:
1. Annual In Full
- Pay for the full year in advance without any interest charges
2. Quarterly Installments
- Pay for the year in parts
- First payment will be the day the policy is renewed followed by three payments
- First payment will be renewal date
- Second will be 2 months from renewal date
- Third will be 5 months from renewal date
- Fourth will be 8 months from renewal date
- Interest charged is prime + 2%
- Note: the first payment is always a little higher than the next three equalized payments
3. 12 Monthly Payments
- Pre-authorized payment on the same date each month
- You can leave it as the default withdrawal date or choose a specific date of the month
- Can only be set up to come out of your bank account
- Interest charged is prime + 2%
- Note: if a payment defaults twice in a row you will be charged a $20 late fee
Third Party Liability Explained. Here’s Why You Need It.
Another part of your auto policy is third party liability. In short, it covers you for property damage you may cause as well as vehicle damage anywhere in North America. Did you know that if you travel outside of Manitoba, you can be sued for bodily injury? In Manitoba, we have PIPP (personal injury protection program) which means that we cannot sue each other for bodily injury. If you are in an accident outside of Manitoba, whether another province or the United States, you can be sued which in certain circumstances could be a large sum of money.
What is third party liability insurance?
Third party liability is the portion of your insurance coverage that protects you if you’re held legally responsible for an injury due to an accident or damage to property. This helps cover the costs of legal fees, money to settle a lawsuit and other expenses related up to the limits identified in your policy.
What does third party liability insurance cover?
Included in your basic insurance policy is $200,000 third party liability with the option to increase to up to 10 million. Depending on the use of your vehicle you may feel confident leaving your TPL at the basic amount. If you choose to keep it at the minimum and have an accident that is over and above $200,000 you will personally be responsible for paying the difference. For example, you could be driving down an icy road, not far-fetched in Manitoba, and lose control and run into a businesses building. Rebuilding costs, lost wages, structural damages and more could easily cost more than $200,000. If you had higher liability you would be better covered and less likely to have to pay out of pocket.
You are able to purchase excess TPL in the sum of $1, 2, 5, 7 or 10 million. If you are travelling out of province or to the United States, it would be wise to purchase higher liability due to the fact that you can be sued for bodily injury as well as property damage. These extension products are the least expensive compared to the rest of your policy. Keep in mind if you do have a discount you will be paying less per year than the figures below.
Cost per Year
What is the difference between first party versus third party liability insurance?
First party is the insured, so yourself. Second party is the insurer, for example if we are referring to auto insurance this would be MPI. Third party is the person who is bringing legal action against the insurer. Therefore, if you lose control and drive into a business building, that business owner is now the third party in the equation.
Do I have third party liability coverage when I rent a vehicle?
Yes, if you are renting a vehicle and get insurance through MPI, you automatically are covered for $10 million liability.
How much third party liability insurance do I need?
Choosing your TPL will depend on where and how often you are using your vehicle and ultimately your comfort level. You can always increase your TPL if you are leaving the province, however, it will cost $15 to reduce your coverage.
How do I get third party liability insurance?
Third party liability insurance is mandatory on all basic MPI policies, so no matter what you will carry $200,000. To increase your coverage, stop into one of our offices and we can bump up the coverage to a comfort level that works for you.
It is so important to understand what you are liable for and how you can be properly covered! Stop in and say hi either online or at one of our eight Manitoba locations and we would be happy to help you find the best coverage for you.
Factors That Affect Car Insurance Rates
Do you take your vehicle to work every day? Do you take public transportation? Is your vehicle sitting during certain seasons? There are different types of vehicle use that will affect your annual premium. Here’s some more info on each to ensure you have the proper use selected for your lifestyle.
1. Merits vs. Demerits
We’ve heard it before, a good driving record is important. Especially when determining insurance premium rates. If you have merits, you will have a discount on both your drivers licence as well as your insurance rates. The more merits, the higher the discount. If you’re at the max of 15 merits, you can get up to 33% discount. If you have demerits you will receive no discount on your premium.
Your location and where you live also determines how much you pay. Manitoba is broken up into four territories. All territories other than one, which is Winnipeg, are charged a lesser rate. This is due to a lower volume of people on the road which leads to fewer accidents, along with a greater statistic of vandalism and theft. If you commute from any of the areas outside of the city limits of Winnipeg identified by MPI, you will have to pay the commuter rate. As your vehicle is territory one risk areas, you will pay the same rate as others in the Winnipeg territory.
3. Use of Vehicle
- Exactly what it sounds like; you are not restricted from any vehicle use
- Most people who have this are those going to or from (or part way) to work, school or for business purposes on a regular basis
- Restricts your vehicle use to going to work no more than four times a month or 1,609 km during a rating term
- Can’t be used for business purposes
- Able to drive dependants to school but those who are driving themselves to school would not classify as pleasure use
- Most people who have this are those who are retired, stay at home parent or on maternity leave, or those who take other forms of transportation to work or school
Lay Up (Storage)
- If your vehicle will be parked for a significant amount of time this option can save you money on your premium
- Financially it makes sense if your vehicle will be parked for more than one month
- Vehicle must be parked on private property in Manitoba
- Covered for fire, theft, vandalism and not collision as it will not be road insured
- Couriers and delivery services who operate in a city or municipality
- Must need to be in connection with a business
- Example: pizza delivery, floral delivery, or mail courier
- Would need to purchase this if you are delivering goods more than four times a month or in excess of 1,609 km during a registration period
Farming All Purpose
- Primary occupation is farming or someone who rents land for three months or 720 hours a year
- Specific operations for those who rent land can be found on the MPI website
- Those who are retired farmers, those who own land and lease it to others are not eligible for this use
Did You Know? Maximum Insured Value
Is your vehicle worth more than $50,000? Increasing the maximum insured value will ensure that your vehicle is properly covered. Under basic autopac, $50,000 is the most that your vehicle can be insured for. If your vehicle is worth more than this including taxes, you’ll need to purchase excess maximum value.
Excess value is based per thousand above $50,000. An increase of $1,000 value costs $4 annually.
For example, if you purchase a vehicle that costs $70,000 including taxes you would need to purchase $20,000 excess value. This would cost an extra $80 per year.
Loss of Use Coverage – Here’s Why You Might Need It
How would you get to where you need to be on a daily basis if your vehicle is out of commission? Do you have a second car, could you use public transit, or would someone loan you their vehicle? It’s always good to be prepared if something does happen to your vehicle in order to continue with what is going on in your life.
What is loss of use coverage?
MPI has an extension product called loss of use coverage which provides you with money towards a rental vehicle. You have coverage if your vehicle is stolen or accidentally damaged. It will also pay for reasonable costs of other transportation no matter who is at fault. There are two levels for vehicles:
- Will provide you $39.02 per day to a total of $1,170.60 (30 days) taxes included
- Covers the costs to rent an economy vehicle
- Good choice if you are not dependant on a truck or an SUV to get around for a short period of time
- Also will cover fares for taxi and bus transportation
- Will provide you $68 per day to a total of $2,040 (30 days) taxes included
- Covers the cost to rent a full-sized vehicle (truck, SUV, van)
- If you have a large family or need a truck for work purposes, you would be better off choosing this option
- Also covers fares for taxi and bus transportation
- Will provide you $135 per day to a total of $4,050 (30 days) taxes included
- Provides coverage if your motorcycle or moped is stolen or damaged accidentally
- Coverage covers the rental of a motorcycle, moped or large vehicle
Do I need loss of use coverage?
No, if you have alternative modes of transportation that are available to you in the event that your vehicle isn’t available this coverage may not apply to you. If you have two vehicles and know that one of those will be available to you in the time you need it most you can go without purchasing this extension product. However, if you aren’t able to identify alternative plans you may want to think about adding this coverage.
The premium rates are dependent on what level you choose as well as what territory you reside in. However, if you have merits you’ll receive a safe driving discount which will reduce the premium. Note the coverage will end once you get your vehicle back, when a settlement offer is made or once the coverage limit has been met. If your vehicle was in a collision, coverage will begin immediately. If your vehicle was stolen coverage will begin the day after you report the claim at 12:01 a.m. Ultimately, you know what coverage you need to keep your life business as usual after situations of theft or collision. Know the options and choose what will work best for your life and needs!