What is Auto Insurance?

Definition of Auto Insurance

Auto insurance covers the policyholder against damages and liability in the event of a collision, damage to the vehicle, or other named risks on the policy. Auto insurance is also referred to as car insurance, and covers personal vehicles such as cars, pickup tracks and sport utility vehicles (SUVs). Auto insurance may be issued to an individual, a family, or to a business for company vehicles.

The minimum amount of insurance a policy can have in Alberta is $200,000 for third party liability and accident benefits. Most policies in Alberta are for $1,000,000 for third party liability, as liability claims can quickly become expensive in the event of a major accident.

Your auto insurance policy can also include the following optional items:

  • Collision covers the cost of the repair of a vehicle if it is in an accident, usually up to a specified amount, and usually with a deductible in place that the policyholder must pay.
  • Comprehensive coverage covers most non-collision related items, including vandalism, fire, and collision with animals.
  • Specified Perils (also known as named perils).
  • Other Endorsements: a blanket term used for most optional items on a policy.


Mrs. Mapplethorp has a pickup truck and lives in the outskirts of Edmonton in a rural community. The roads around her area are known to be hazardous for deer and other animals. Her broker recommends comprehensive coverage for her truck to ensure that she’s covered if she gets into an animal-related accident.

Have more questions? Contact Us for more details on Auto Insurance.

Auto Insurance Tips from First Foundation

Add Coverage Where Needed

Additional endorsements can be items such as a limited waiver of depreciation, which will waive most depreciation on repair or replacement of a new vehicle for a specific period of time. Many other optional endorsements are available, and your broker can recommend the best ones for you.

Raise Your Deductibles

Nearly all coverage comes with a deductible, which is a payment the policyholder must make towards the cost of repair or replacement of the vehicle. In most cases, higher deductible amounts mean a lower overall cost, or premium, for the policy.

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Last updated Jan 14, 2019