Coverage and Options - Alberta

How do you go about helping me determine what coverage I need?
What choices do I have? 
Do most companies offer the same type of coverage?  


The following coverage requirements and dialogue is for private passenger vehicles.   Commercial, ATV, Snowmobiles, RV, and Motorcycle insurance is covered under a separate blog which will help you keep coverage in perspective as the rules and coverage choices are different for each type of vehicle.

The easiest way to understand private passenger auto insurance in Alberta is to start with the bare minimum coverage requirements and add to the policy to build the coverage you desire.  

Third Party Liability                                                                            $200,000

Third Party means someone else who is not insured under your policy.

Most people insure for $1,000,000 or $2,000,000.   The difference in cost is generally $70 to $150 for the increased coverage.   Higher limits are available.  

This section covers amounts that you are found liable for due to your negligence.  (Being found at fault for the accident) .  Bodily injury,  lost income, damage to vehicles, damage to personal property and expenses for towing, medical, long term care are some of the costs that could be involved in a settlement. That is why most people will choose higher limits simply because the cost could easily exceed $200,000.

Maximum pain and suffering claims for minor injuries are capped at approximately $4500.  This legislation was introduced in 2004 when the act was dramatically changed in Alberta. 



Accident Benefits 

Basic Benefits are mandatory and are included with every policy sold in Alberta.  For specific limits check your policy which should contain the SPF1 wording which spells out each of the benefits and the limits covered.    Usually there is no option to increase the limits.    

SEF 44 – Family Protection 

This endorsement provides extended coverage for family members living in the same household as separate and different while in a vehicle owned by the insured.  This endorsement is required by law.  Without this coverage family members living in your home would not be able to recover damages from the driver of the vehicle should it happen to be another family member.      


Physical Damage To Your Automobile

You are not required to insure your vehicle for physical damage in Alberta .  You can choose to self insure if you so desire.

The normal deductible for collision and upset is $500.   The discount for a higher $1000 deductible is usually 10% of the premium charged for collision.   The premium will vary dramatically depending on the driving record, age, marital status, etc.  Younger drivers who's premium is higher are usually the ones who opt not to insure for collision and upset.  New drivers and younger drivers sometimes can benefit by purchasing a vehicle that does not have much value so they do not have to purchase this coverage.

Comprehensive coverage essentially insures your vehicle while it is stationary for such things as hail damage, vandalism, windstorm, falling objects, theft, fire, etc.    The cost of Comprehensive coverage does not change much from driver to driver since the type of losses are fundamentally for when the vehicle is stationary and not in use.   It does change due the age and value of the vehicle.  The normal deductible is $250 for Comprehensive coverage.  Since the cost of insurance is quite low a higher deductible does not save very much in the way of premium and most people opt for the lower deductible.  Wildlife collision claims are generally consider a comprehensive claim.

Glass coverage is provided under the comprehensive portion of the policy.  This coverage is very expensive and can be deleted from the policy under what we call the SEF13D endorsement.   The majority of people opt for this endorsement.  You can purchase glass coverage as a separate policy which would be a much better choice.

Specified Perils insurance essentially insures your vehicle while it is not in use.  This level of coverage is designed for vehicles that are in storage and not in use.  Since the vehicle is not left unattended on the street or in parking lots far less can happen to it than when it is in use thereby requiring less coverage.  

 ENDORSEMENTS are then applied to the policy. 
Endorsements can either address shortfalls in coverage or restrict coverage.  Endorsements that need to be signed are restrictive.  Anytime you need to sign an endorsement be assured that it is taking coverage away that you would normally be getting under a Automobile policy.

As you go trough an application for automobile insurance you soon see how the application is designed to ask all of the right questions to determine which of these endorsements need to be added to your policy.  

The more common endorsements are highlighted in blue.

SEF #2 – Drive Other Automobiles (Named Persons)
This endorsement extends the “drive other cars” provision of the SPF #1, to the listed drivers of a policy issued in the name of a firm or corporation as they would receive if the vehicle was insured in their own name. The endorsement provides Section A coverage for the persons named in the endorsement while personally driving any other non owned private passenger automobile.   NOTE: We will read this coverage into our SPF #1 for all drivers listed on the policy who are residing in the same household as the named insured.

SEF #3 – Drive Government Automobiles
Covers the driver from potential liability, as a driver, while ooperating a government automobile. Governments self insure and coverage does not extend to when the vehicle is used for personal reasons.  

SEF #5 – Permission to Rent or Lease
Grants permission to the lessor to rent or lease the described automobile to a specified person (Lessee) so if you have a leased a car you will see this endorsement on the policy.  


SEF #6a – Permission to Carry Passengers for Compensation
This endorsement provides permission to carry passengers for compensation., or as part of a car pool or other arrangement.

SEF #8 – Property Damage Reimbursement Endorsement
This is a Property Damage deductible endorsement usually used in conjunction with 

SEF #8a – Property Damage Reimbursement for Operation by Named Person
Endorsement (Section A only). This is used to exclude coverage for a specific person who may have excess to the vehicle and be living in the same household.   This may be required if a person living in the home is suspended from driving or the vehicle owner does not want to pay higher premiums to insure a spouse or child who lives in the home. 

SEF #9 – Marine Use Excluded Endorsement (Amphibious Vehicles)
This endorsement excludes coverage while the vehicle is used in or upon water or being launched or landed there from.  This is usually applied to snomobiles or ATV's since they are not designed to be used on water but many owners choose to do so at their risk.

SEF #13d – Limited Glass Endorsement
Deletes glass from Comprehensive coverage.

SEF #13H – Section C-Deletion Hail Coverage Endorsement
Usually used if prior damage from hail damage exists unprepared.  It can also be applied in situations where roofing material on RVs is not acceptable to the insurance company. 

SEF #19 – Limitation of Amount Endorsement
Limits the maximum amount payable on Section C coverage on a vehicle to the appraisal value but does not guarantee this amount or allow for appreciation.  This is usually desired by vintage car owners since the depreciated value is far less than the real market value of the vehicle.  The insurance company would otherwise pay the actual cash value which is likely to be much lower.

SEF #20 – Loss of Use
This endorsement provides coverage for a rental vehicle if the insured vehicle is out of service due to loss from an insured peril covered under the Section C coverage carried by the insured. Endorsement provides for approximately $1,500 (varies) coverage per occurrence with no maximum daily limit.

SEF #25 – Alteration Endorsement
Used to record changes to an SPF #1.  This endorsement needs to be signed by the insured. 

SEF #27 – Legal Liability for Damage to a Non-Owned Automobile
Extends Section C coverage to include damage to an automobile not owned by or registered in the named insured while it is in the care, custody & control of the insured.  

SEF #28 – Reduction of Coverage
This endorsement reduces limits or coverage under the policy while the person named in the endorsement is operating the insured vehicle. This endorsement must be signed by the insured.

SEF #30 – Excluding Operation of Attached Machinery
This endorsement excludes Liability under Section A for the “operations” of attached equipment.

SEF #31 – Non Owned Equipment Endorsement
This endorsement extends Section C coverage to equipment not owned by the insured while it is attached to the insured vehicle.

SEF #32 – Recreational Vehicle Endorsement
This endorsement provides coverage for unlicensed, unqualified or underage drivers while the recreational vehicle is being used off public highways.

SEF #37 – Limitation to Automobile Sound and Electronic Communication Equipment
This endorsement limits to $1,500 for the loss or damage to equipment that is not factory installed, caused by theft or attempted theft.

SEF #38 – Increased Limit, Automobile Sound and Electronic Communication Equipment


SEF #39 – Accident Rating Waiver Endorsement
When is endorsement available?
1) Available only for the following classes: 01, 02, 03 and 07
2) Available only for the following Driving Records: 6* and 7*
3) Must be clear of any “at-fault” losses in the last 6 years
How it works:
1) In the event of a first at-fault loss, the current rating will go unchanged on renewal.
The only exception to this rule would be an at-fault loss that also resulted in a
criminal charge, serious charge, Insurance Fraud or Material Misrepresentation. In
those cases forgiveness will not apply.
2) On the second at-fault loss, the rating will drop as follows:
Driving Record 7 will drop to a 3
Driving Record 6 will drop to a 3
3) Please note this endorsement is forgiveness on the accident only, not for convictions.
If the accident results in a minor conviction which is in conjunction with other convictions, it still could result in a drop in rating.
4) This endorsement is deleted after the first at-fault loss and cannot be purchased again until the risk is 6 years claims free.

SEF #40 – Fire & Theft Deductible
Used to apply the deductible under Comprehensive or Specified Perils to all Fire and total Theft losses.


SEF #43R – Limited Waiver of Depreciation
This endorsement waives depreciation on new vehicles for 30 months after delivery to the insured.


SEF 43R (L) – Limited Waiver of Depreciation Endorsement (Specified Lessee)
This endorsement will protect the lessee from costs to dispose and implement agreements on a new lease.