Power Sport News, Vol. 11, No.7, 2007

Optional Auto Insurance: What Are You Buying?

By Daryl Brown

Have you ever bought Collision, Comprehensive or Specified Perils insurance, also known as optional insurance, and wondered what you were getting? The difference between the three types of insurance can be confusing. When purchasing optional insurance, it is important to understand what the policy covers before spending the extra money.

Collision insurance covers your vehicle in the event you damage it by striking another vehicle, person, object or the road surface. It will include towing, storage, and salvage disposal if required. In other words, if you purchase Collision insurance and the Insurance Corporation of British Columbia ("ICBC") deems you are responsible for the accident, they will pay all costs related to towing your vehicle from the accident scene if necessary, storing it before repairs are made, the parts and labour required to perform repairs or costs related to scraping it for salvage.

Specified Perils insurance covers your vehicle from external forces that may cause damage. In particular, the external forces covered under Specified Perils includes damage caused by: fire, lightning, theft, windstorm, earthquake, hail, explosion, riot, civil commotion, falling or forced landing of an aircraft or portion of it, rising water and damage sustained through transportation. Comprehensive insurance also covers your vehicle from external forces but is much greater in scope.

Comprehensive insurance covers you for all loss as offered under Specified Perils insurance, but also includes: vandalism, falling or flying objects including rock or gravel damage to your windshield, mischief, impact with animals and even missiles.

If and when the time comes to make a claim, you will be subject to a deductible. A deductible is the portion subtracted from the amount you will recover from ICBC. The deducible for Collision and Comprehensive insurance can range from $300 to $2,500 and you have the ability to choose the amount of your deductible at the time of purchase. The exceptions are windshield claims made under the Comprehensive policy, which are always $200 and Specified Perils claims are always $300.

Both Specified Perils and Comprehensive insurance include 'Loss of Use' coverage. Loss of Use provides reimbursement for a substitute vehicle, taxi or public transportation up to $40 per day to a maximum of $800 in the event your vehicle is stolen. Loss of Use becomes active on the third day after reporting the theft to police and is in effect until your vehicle is repaired, your claim is settled or you reach the $800 payable under the scheme.

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