Some Canadian provinces have a default deductible amount everyone starts at—for instance, it’s $500 in Ontario and $750 in Manitoba—but you can choose to pay less or more, depending on your situation.
The amount of deductible you choose impacts the cost of your premiums. Generally, the higher the deductible, the lower the premium. So, if you think the risk of your car being damaged is low, you may want to go for a higher deductible in exchange for laying out less money ahead of time.
A higher deductible can result in savings of 20% to 25% on your car insurance premiums.
Your deductible amount will also likely affect whether you make a claim or not. It wouldn’t make sense to make a claim for a $300 repair if your deductible is $500, for example.
If you live in British Columbia, making several claims on comprehensive insurance may mean you will be required to pay an escalating deductible, ranging from $500 to $2,500 according to the ICBC.
What is a disappearing deductible?
Some Canadian insurers offer a disappearing deductible, sometimes called a vanishing deductible. This type of coverage rewards drivers by reducing their deductible after each claim-free year, up to a certain number of years (it varies by province).
Some insurers discount the deductible by a percentage (20% is a common amount) while others bring it down by a fixed annual dollar amount (say, $50 or $100).
Depending on which insurer you choose, you may have to pay for a disappearing deductible, so consider if it makes financial sense, based on how likely you are to make a claim. A disappearing deductible may only be available to qualifying drivers, as determined by the insurance company.
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