My mom backed her Toyota RAV4 into her garage door as it was opening. She got the door fixed, but there’s still a scrape and a small dent on the SUV’s tailgate. If she gets her insurance to cover the damage to the SUV, will her premiums go up? Or do insurance premiums only go up if you hit another car? – Jay, Ottawa
If you tell your insurance company you hit something, whether on the road or not, your insurance rates could take a hit.
“If you backed into your garage, you’ve just hit an inanimate object and it’s the same as any other accident that’s your fault,” said Adam Mitchell, chief executive officer of Mitchell & Whale Insurance Brokers Ltd. (Mitch), an insurance brokerage based in Whitby, Ont. “It will have repercussions for your insurance rates going forward.”
If you’ll excuse the pun, here’s a quick crash course in car insurance. There are three types of coverage in an auto insurance policy: liability, collision and comprehensive.
Liability coverage is mandatory – you can’t drive without it. Liability insurance covers damage you cause to other people or their property, including their vehicle, if you’re at fault. But it doesn’t cover damage to your vehicle if you’re at fault.
That’s where collision insurance comes in. It covers the cost to repair your own vehicle if you hit something. Whether you hit another car, a tree or a garage door, the damage to your car will only be covered if you have collision insurance.
Then there’s comprehensive insurance that covers almost anything else that’s not the result of a collision – including theft, vandalism, hail and flying objects. Both collision and comprehensive coverage are optional in most provinces.
There’s also all-perils or all-risk coverage, which is a combination of collision and comprehensive.
Who’s at fault?
If you hit something that’s moving – for instance, lumber flying off a truck or a deer darting across the road – that would be covered by comprehensive or all-perils, Mitchell said.
To your insurance company, that moving object hit you. Comprehensive claims aren’t considered your fault, so they don’t affect your insurance rates.
But who’s at fault isn’t always cut and dried. Mitchell said he had a client who hit a table that had fallen off a truck in front of him.
“Because he said it had come to a full rest, that is now [classified as] a collision with an inanimate object as opposed to a collision with a flying object,” Mitchell said. “And so it was a collision [claim] and not comprehensive.”
Collisions go onto your claims history and usually affect rates, he said.
An exception would be if you have accident forgiveness on your policy, which lets you have one at-fault collision without it affecting your rates.
While your insurance company won’t raise your rates because of that first claim, the at-fault claim will still stay on your record for six years. If you switch to a new insurance company, they’ll see that claim and could use it when setting your rates, Mitchell said.
“[A collision claim] is a reflection of your driving record and your ability to judge distance and space, and to not hit things,” he said. “The cost for coverage will increase as you hit more things.”
However, if another car hits you – whether you can identify the vehicle or it’s a hit and run – that is covered by your standard policy, regardless of whether you added collision or comprehensive coverage.
Because you’re not at fault, the crash won’t go on your record or affect your insurance rates.
Not worth it?
Both collision and comprehensive claims are subject to a deductible.
That’s why it’s a good idea to get an estimate from a body shop before deciding whether to make an insurance claim.
Say, for instance, that your collision deductible is $1,000 and it will cost $1,200 to repair that dent from the garage door. If you make a claim to save $200, your monthly rates could go up for years. It may not be worth it, Mitchell said.
Have a driving question? Send it to globedrive@globeandmail.com and put ‘Driving Concerns’ in your subject line. Emails without the correct subject line may not be answered. Canada’s a big place, so let us know where you are so we can find the answer for your city and province.
Jason Tchir