In YT, what should I know about insurance requirements for car loans?

When securing a car loan in Yukon, lenders universally require specific insurance coverage to protect their asset, which is the vehicle you are financing. This typically includes mandatory third-party liability insurance, as required by law across Canada, which covers damages or injuries you might cause to others. Beyond this, lenders will insist on comprehensive and collision coverage. Comprehensive insurance protects against non-collision incidents like theft, vandalism, fire, or damage from natural events, while collision coverage pays for damages to your vehicle in an at-fault accident. These requirements are standard across Canada, including YT's private insurance market, and are crucial given the rising costs of vehicle repairs and replacement values anticipated in 2025.

This matters significantly to the consumer because failing to maintain the required comprehensive and collision coverage throughout the loan term can constitute a breach of your loan agreement. Such a breach could lead to the lender purchasing force-placed insurance at your expense (which is often more costly and provides less coverage for you), or even result in the repossession of the vehicle and severe damage to your credit rating. Therefore, understanding these requirements and budgeting for adequate insurance premiums, including considering deductibles, is an essential part of responsible car ownership and loan management in Yukon.