What Does One Way Car Insurance Cover

The auto-insurance industry is vast. People looking to provide insurance coverage for their vehicles now have a wide variety of insurance options based on their needs. The one way coverage option is among the most common terms you will come across in automobile insurance. For persons looking to save money while also providing basic protection in case of accidents, this may be the best option. 

What is one-way car insurance? 

It is the minimum coverage that is mandatory in order for a vehicle to be on the road. Ontario one-way insurance comprises two parts.  The first part is Third-Party liability coverage, which would provide coverage for injury and/or damage to a Third Party if you are deemed at fault, and the second part is Direct-Compensation-Property-Damage. If someone else hits your car and you know who they are, your insurance company will pay to fix your car. Any damage to your own vehicle from an accident that you caused would not be covered by one-way insurance and would need to be paid out of pocket (this includes hit and runs where the Third Party cannot be identified).

Why should anyone consider one way coverage? 

Given the limited compensation, why would anyone prefer one-way insurance coverage?

• People looking for affordable coverage- Finding affordable auto insurance coverage can be a task. For instance, vehicles that are barely used on the road have lower chances of causing accidents. With the lower risk, the one-way insurance policy will provide coverage while also helping the driver save some money.  Nevertheless, someone with a newer vehicle should still have full coverage regardless of how often they drive their vehicle. That said, most people that have new or newer vehicles are financing/leasing them and most financial institutions require them to have full coverage on their vehicles (unless they get a special accommodation from the financial institution to reduce coverage such as parking it in their garage for the winter). If they reduce coverage without getting approval, they could be in breach of their financing/leasing contract. 
• Older vehicles- Most often, older vehicles are cheaper to repair. As such, a one-way insurance coverage may deem sensible since a lot of times it's not financially sensible to have full coverage on an old vehicle depending on the premium and deductibles compared to the value of the vehicle.

What does one way car insurance cover? 

One way insurance only provides coverage for damages caused by other parties to your vehicle during an accident. Your vehicle will not be fixed if you cause an accident.

Here are 5 things you should know before choosing one way car insurance:

• One way insurance provides minimal mandatory coverage- In all provinces, it is illegal to drive without an insurance policy with at least one-way insurance (Third Party Liability). One way insurance coverage will provide minimal mandatory insurance coverage. 
• You do not have physical damage coverage on your vehicle with one-way insurance- As we have mentioned above, this is the major limitation of one way insurance policies. In most instances, one way insurance policy will force you to pay out of pocket for damages caused to your vehicle if you cause the accident or it's involved in a hit and run. It is recommended that you have full coverage (or two-way insurance) on your vehicle if you are not financially capable to replace your vehicle in the event of a total loss (for the worst-case scenario).
• You do not have comprehensive coverage- This is a major downside with one way insurance policies as it does not provide comprehensive coverage. This means that if your car is vandalized or destroyed due to natural occurrences such as hail, you will not be compensated. One way insurance policies only provide coverage for liability incurred to other parties in case of an accident and not-at-fault accidents. Also, if you are involved in an accident and no other persons are involved, for instance in the case of hitting on stationary objects, or weather-related accidents, you will not be compensated. 
• One way insurance coverage is a risky affair- Before opting for this kind of insurance, you have to measure the risks vs. the benefits. While you get to remit lower premiums compared to other policies, paying out of pocket can cripple your finances. As such, it is best to evaluate whether a one-way insurance plan is the best fit for you before you undertake it. 
• It has benefits- Even with the high risks involved in one-way auto insurance plans, it still has various benefits. For instance, persons looking for the minimum mandatory insurance coverage benefit from this plan not forgetting the significantly lower premiums. One way insurance policies would be more beneficial to persons who own vehicles that will be cheaper to repair. Also, a person who is proficient at fixing cars can benefit from this plan since they get to carry out the repairs themselves, hence minimizing costs. 

Note: If you are financing or leasing a vehicle, in most cases you are required to have full coverage.

Choosing an auto insurance policy is never easy. A simple mistake can end up being more costly in the long run. As such, you have to ensure you select the plan that will provide maximum coverage while also being pocket-friendly. 

Conflicted on whether to go one way? Here are some factors should you consider when choosing an insurance policy? 

• What coverage do you need? 

People have varying coverage needs. While some must have comprehensive and collision coverage, others might opt to have limited coverage. The key is knowing what risks you are more exposed to and safeguarding yourself against them. For instance, it may be wise for a person with an older car to have one-way car insurance. On the other hand, this coverage will not be sufficient for a person who just purchased a new model or someone who is located in a place that is more prone to hailstorms. 

• What is the minimum mandatory coverage in your location?

Auto-insurance is mandatory. Luckily, people are not limited to only one option. Even with the availability of a wide variety of insurance policies, it is important to have the minimum mandatory coverage. In most places, one-way insurance coverage is the minimum auto insurance coverage required for any driver. 

• The cost of the insurance policy

The cost of an insurance policy must be factored in before purchasing a policy. While you can base this depending on your earnings, lifestyle, your location, risk factors as well as the car you drive, you must ensure that you are fully covered. While opting for a low-cost insurance policy with minimal coverage can be expensive in the long run, a costly auto insurance policy can also cripple your finances especially if you are paying high premiums. To reduce the cost of your premiums, a higher deductible is advisable. 

• You need a trusted and reputable insurer

Insuring your car with a top-rated and reliable insurance company is a guarantee of great services even when filing a claim. How can you know if an insurer is reputable? Be on the lookout for great reviews from family, friends and even online platforms. Also, look out for top-notch customer services as well as fair rates. 

• Comfort and assurance

The main aim of auto insurance is to safeguard yourself against perils that can happen to you while on the road. Auto accidents can be fatal and expensive to repair or replace the vehicle. As such, your insurance policy should provide a sense of security. 

While opting for one way insurance policy will see you remit lower premiums, it can be expensive since it only caters for liability caused to other parties. This may force you to pay out of pocket to cater for repairs to your vehicle. As we mentioned, it is only wise to have one-way insurance coverage if you are capable of handling the repairs yourself, driving an older vehicle or need the minimum mandatory auto insurance coverage.