You’re headed to work in the morning and walk outside to your car in the driveway. Next to your vehicle, you see broken glass. Your laptop and sunglasses have been stolen. Are you covered?
Key takeaways
- Most car insurance policies do not cover personal belongings damaged in car accidents or thefts, as they focus on the vehicle itself.
- Your home, condo, or tenant insurance typically covers your personal possessions even if they’re damaged in your car.
- Understanding how your different insurance policies work together can help you avoid coverage gaps and ensure that your valuable items are protected wherever they are.
Understanding car insurance coverage basics
Car insurance in Canada provides various types of protection, but most policies focus on the vehicle itself and injuries or damage caused to others.
- Liability insurance covers costs when you're responsible for damaging someone's property or causing injuries.
- Collision insurance pays for repairs to your vehicle after a collision with another car or object.
- Comprehensive coverage protects against non-collision incidents like theft, fire, vandalism or natural disasters.
While these coverages protect your vehicle and your liability as a driver, many drivers don't realize there are certain differences in what they believe to be covered and what is actually covered until it's too late.
Note: The insurance coverage you choose can affect your premiums. To learn about potential reasons why your insurance rate may increase, check out our article: Why did my car insurance go up?
Does car insurance cover personal belongings?
The short answer is no. Most car insurance policies do not typically cover personal belongings or possessions damaged in a car accident. This includes electronics like your laptop, valuable items like jewellery, or sporting equipment like golf clubs.
Why don't car insurance policies cover personal items? Insurance companies design auto insurance to cover the physical vehicle itself.
Personal property inside your car isn't considered part of the vehicle, so it falls outside these categories.
Your safety net: Homeowners, condo and renter’s insurance
Fortunately, your personal belongings are often covered under a different type of insurance policy. Home, condo, and tenant insurance all generally cover your personal items regardless of where they are when they're damaged or stolen. This protection is sometimes called "off-premises coverage" and is an important safety net for your belongings.
How home, condo and tenant insurance protects your belongings
Your home, condo, or tenant insurance coverage typically extends to your personal possessions even when not in your home. This means if your backpack containing your laptop is damaged during a car accident, your property insurance policy likely covers this loss. However, there are important limitations to understand.
Your policy may have lower limits for personal property away from home. High-value items like jewellery, or collectibles might need additional coverage. You'll also need to pay your deductible before receiving compensation, and the claim process might differ from home-based losses. Understanding these nuances can help you properly plan your insurance strategy. If you are insured on a bundle, the insurance may only charge you one deductible across both losses.
Real-life scenarios: What insurance covers what
Let's look at some common scenarios to understand better how insurance works for personal belongings damaged in car accidents.
Scenario 1: Theft from your vehicle
You park your car in your driveway overnight. In the morning, you discover broken glass, and your laptop and sunglasses have been stolen.
What's covered:
- The broken glass would be covered under your car insurance policy with comprehensive coverage.
- Your home, condo, or tenant insurance policy would most likely cover your stolen personal belongings.
Scenario 2: Belongings damaged in collision
You're commuting to work when another driver rear-ends your car, destroying the golf clubs you planned to use that afternoon.
What's covered:
- Your vehicle damage would be covered by either your collision coverage or the other driver's liability insurance.
- Your home, condo, or tenant insurance would typically cover your damaged golf clubs.
Scenario 3: Fire damages vehicle and contents
Your car catches fire due to an electrical issue, damaging the vehicle and all personal items inside.
What's covered:
- The vehicle damage would be covered under your comprehensive coverage.
- Your home, condo, or tenant insurance would cover your damaged personal belongings.
In each case, you'll need to document what has been damaged, file claims with the appropriate insurers, and understand how your deductibles will apply.
Special considerations for drivers
Insurance regulations vary across Canadian provinces, affecting how claims for personal possessions are handled.
Provincial variations
Some provinces have no-fault insurance systems that can affect how personal property claims are processed. Coverage limits and deductibles vary by province and insurance company. Some provinces require specific endorsements for certain types of coverage. These variations highlight the importance of understanding your local insurance regulations and how they impact your coverage for personal belongings.
Impact of deductibles on small claims
Before filing a claim for damaged personal belongings, consider the value of your damaged items compared to your deductible, which is important. If the value is slightly higher than your deductible, it might not be worth filing a claim.
Steps to take after an accident involving personal property
If you're in a car accident where personal items are damaged, follow these steps:
- Ensure everyone's safety and report the accident to police if required
- Document everything with photos (both vehicle damage and personal property damage)
- Make a list of damaged personal belongings with approximate value
- Contact your insurance representative
- File appropriate claims and provide documentation as requested
Documenting damage effectively
Proper documentation strengthens your claim:
- Take clear photos of all damaged items
- Create an inventory listing the items, their approximate age, and value
- Keep receipts for major purchases when possible
- Get approved repair estimates if applicable
Tips for ensuring you're protected
Insurance provides peace of mind, but only when your coverage aligns with your needs. Many Canadians discover gaps in their protection only after experiencing a loss. Reviewing your insurance coverage regularly and thoroughly is a good idea to avoid unwelcome surprises after an accident.
Review your current policies
Schedule an annual review with your insurance representative to understand what your auto insurance policy covers and doesn't cover, including any limitations or exclusions that might affect personal property, how your home or tenant insurance protects your personal belongings while in your vehicle, and any off-premises coverage limits. Identify if there are coverage gaps you should address before an incident occurs, as proactive planning prevents future headaches.
Maintain an inventory of valuable items
Create and maintain a home inventory that includes things you commonly keep in your vehicle. Take photos of valuable items and store them securely in cloud storage or another off-site location. Keep receipts for major purchases, especially for electronics and other high-value items. Update your inventory annually to reflect new acquisitions and items you no longer own. A current inventory is invaluable during the claims process and helps ensure you receive proper compensation.
What if you use your car for business purposes?
Using your car for business creates additional considerations. Personal car insurance might not cover belongings used for business purposes, leaving a significant gap in coverage for work equipment.
Commercial automobile insurance might be necessary to fully protect your vehicle and its contents when used for work. Separate business property insurance for tools or equipment routinely transported in your car might be required. These additional coverages are essential for entrepreneurs, salespeople, and others who rely on their vehicles for business activities.
If you use your vehicle for both personal and business purposes, speak with your insurance representative to ensure you have appropriate coverage for all situations.
Special cases: High-value items in your vehicle
Most policies have limits on coverage for certain high-value items like:
- Jewellery and watches
- Collections and artwork
- Electronics like cameras and specialized equipment
- Sports equipment
Do not leave valuables in your vehicle overnight or unattended. If you routinely transport valuable items in your vehicle, ask about scheduled personal property coverage to ensure adequate protection.
What information do I need to provide when making a claim for my personal belongings?
Be ready to provide:
- Police report (if applicable)
- Photos of damaged items
- List of items with approximate age and value
- Details about the accident or incident
- Your policy information for both auto and home, condo, or tenant insurance
Insurance is about more than just recovering money after a loss. It's about having the security to know you're prepared for life's unexpected moments, whether at home or on the road. It’s important to talk to your insurance representative about your options.
Using your car for business? Learn more about personal car insurance and business use.
Renting a car? Read more about personal car insurance and rental cars.
