Automobile insurance in Alberta is provided using a Government of Alberta regulated Standard Policy Form (SPF#1). The basic coverage may only be modified using government-approved forms called endorsements. Each endorsement is numbered. The following is an overview of the main sections of coverage that are available as well as some key endorsements.
Mandatory Coverages
Third Party Liability - Protects you or someone driving your vehicle against damage done to someone else (Referred to as a third party). It is often referred to as PLPD (Public Liability Property Damage). This is a mandatory coverage.
Accident Benefits - Provides protection against no-fault medical care required from an accident with your vehicle. This is a mandatory coverage. This coverage is split into two main sections - Medical and Disability.
Family Protection Endorsement (SEF#44) - Several years ago the Unsatisfied Judgment fund was eliminated in Alberta. As well the minimum limit of insurance required in Alberta is only $200,000. With today's medical costs this could quickly be eaten up by medical treatment for you, your family or employees. The Family Protection Endorsement provides you or your occupant's protection in the event an uninsured or under-insured vehicle hits you. Also, if you are traveling in a province or a state where the mandatory liability limit is low (as low as $50,000), Family Protection covers to your own policy's limits regardless of the other person's coverage levels. Technically this is not a mandatory coverage. However, due to number of uninsured vehicles on our roadways we treat it as such for your protection.
Optional Coverages
The following are some of the optional coverages that you may chose to purchase under your policy:
Collision Coverage - Collision protects you against physical damage you may do to your vehicle from a collision with another vehicle or object. If a Third Party is at fault your insurer will collect the monies from the Third Party, a process called subrogation. If you were deemed at fault, your own policy will pay for the loss. This coverage is optional because the cost of insuring some older vehicles for collision could be higher than the value of the vehicle itself.
Comprehensive Coverage - provides you with protection against physical loss or damage from causes other than Collision - fire, theft and vandalism to name a few.
Endorsements
As outlined above the standard policy form (SPF #1) can only be modified using government-approved forms called endorsements (Standard Endorsement Forms SEF's). There are approximately 100 approved endorsement forms, each designed for a specific task. The following are a sample of several endorsements commonly attached to policies.
Permission to Rent or Lease (SEF #5) - This is applied to all leased vehicles.
Self Insure Your Vehicle Glass (Limitation of Glass Endorsement - SEF #13d) - This option works a little differently from other options. By choosing it, you are not adding coverage to your policy, but taking some away! This endorsement is frequently used to reduce your insurance premiums when you agree to assume the cost for repairing or replacing your vehicle glass from road hazards such as flying rocks.
Valued Automobiles Endorsement (SEF #19a) - This endorsement is offered on a selective basis to qualifying vehicles (mainly antique and classic vehicles) and is used to specify when coverage is required up to a stated value. For example, if you have a '67 Mustang you likely would like to protect your investment. It may be appraised at $25,000 whereas the depreciated basis may only be $500. This endorsement would be added to the policy to provide for cost of repair up to the value stated in the endorsement.
Loss of Use (SEF #20) - For many of us our vehicle is essential. If we were involved in an accident we would need a replacement vehicle. Loss of Use coverage pays for a rental car or alternate transportation while your automobile is being repaired. Coverage limits can be different from one insurance company to another. This endorsement fits the bill!
Renting A Vehicle ? (Legal Liability for Damage To Non-Owned Automobiles SEF #27) - Going on vacation in the US or Canada? This handy endorsement is an economical way of avoiding the high cost of purchasing physical damage protection on vehicles you rent. Be sure to check with your credit card company before you purchase this option. You may already have this coverage.
Brand New Vehicles (SEF #43R/L) - The standard auto policy values all vehicles on an actual cash value or depreciated value basis. This endorsement provides for "new for old" coverage typically during the first 30 months of ownership of a new vehicle. It's a great way to protect your investment in a new car.