Orlando Harmon
There are several types of auto insurance in Ontario, and they can be divided into two categories: mandatory and optional. The four mandatory policies include third-party liability coverage, accident benefits, uninsured automobile coverage, and direct compensation property damage. On the other hand, the three optional types are collision coverage, comprehensive coverage, and specified perils coverage.
What You'll Learn
Third-party liability coverage
Third-party liability insurance covers the following:
- Medical fees for anyone's injuries (including pedestrians, cyclists, and fatalities)
- Repair costs to any vehicles damaged (except your own vehicle)
- Repairs or replacement for damage to other people's property
- Settlements in lawsuits for pain and suffering, or economic loss
- Other related expenses
The minimum amount of third-party liability insurance in Canada is $200,000, except in Quebec, where it's $50,000. However, insurance companies recommend buying additional coverage as one accident could easily exceed $200,000, and you would be responsible for any costs above that amount. Most Canadians purchase $1-5 million of third-party liability insurance to ensure they have a broad safety net of coverage in almost all situations.
Auto Insurance Rates After a DUI: The 3-Year Mark
You may want to see also
Collision coverage
- A trailer attached to another vehicle
- The ground (in a rollover)
- Objects on the ground (e.g. a hydro pole, parking lot barrier, or street sign)
It's important to note that collision coverage is specifically for damage to your insured vehicle. If you or your passengers are injured in the accident, this would be covered under the accident benefits portion of your standard auto insurance policy.
While collision coverage is not mandatory in Ontario, it is highly recommended, especially if you have a newer or luxury vehicle. If you lease or finance a car, collision coverage is likely required by your lender.
When deciding whether to add collision coverage to your policy, consider the following factors:
- The value of your vehicle: If your car is worth less than your deductible, collision coverage may not be necessary.
- Your financial situation: Can you afford to pay for repairs or a new vehicle out of pocket if needed?
- Your driving history: If you have a history of accidents, collision coverage can help reduce costs.
- Your deductible amount: Typically, deductibles for collision coverage are $500 or $1,000, but higher deductibles are possible. A higher deductible will lower your premium costs.
If you choose not to purchase collision coverage, you will be responsible for paying for all repairs to your vehicle out of pocket. Collision coverage provides peace of mind and financial protection in the event of an accident, regardless of who is at fault.
Auto Insurance: Adding Your Child as a Driver
You may want to see also
Comprehensive coverage
Comprehensive insurance is an optional form of insurance that you can add to your policy in Ontario. It is not part of the mandatory auto insurance in the province. Comprehensive coverage provides additional protection for your vehicle against a broad range of perils that are unrelated to a collision. This includes fire, severe weather, flooding, vandalism, and theft. It also covers damage to your car caused by animals, such as colliding with a deer.
Comprehensive insurance is particularly useful if you have a newer car that would be expensive to repair or replace. It is also beneficial if you live in an area with frequent inclement weather, as hail and storms can cause extensive damage to vehicles. This type of insurance can give you peace of mind, knowing that you are covered for a wide range of potential damages to your vehicle.
However, it is important to note that comprehensive insurance does not cover everything. It typically does not cover medical expenses, legal fees, or lost income resulting from an accident. It also does not cover damage to another driver's vehicle in an accident or personal items stolen from your car.
The cost of comprehensive insurance can vary depending on factors such as your location, insurer, and driving history. It usually adds a few hundred dollars to your car insurance quote. You can increase your comprehensive insurance deductible to reduce your premium costs.
Auto Insurance Abroad: Unraveling the Mystery of International Rental Coverage
You may want to see also
Direct compensation property damage
DCPD insurance compensates when you or your car is damaged in an accident you didn't cause. It means you deal with your insurer for all no-fault insurance claims and won't have to wait for the other driver's insurer to process your claim. You also won't have to sue the at-fault driver to recover damages, and will be compensated directly.
DCPD covers the cost of repairing your car, excluding injuries. It also ensures you get your vehicle fixed quickly, providing you have the third party’s information and they are insured. It also provides you with a rental replacement, transportation costs, and covers the personal contents in your car.
DCPD operates on a no-fault basis, meaning you can claim benefits from your own insurance company. It covers property damage to your vehicle and does not include personal injury coverage. If you're at fault, you must rely on your own collision or comprehensive coverage to cover the costs.
DCPD is mandatory in Ontario until January 1, 2024, after which drivers can opt out of DCPD by signing the Ontario Policy Change Form 49 (OPCF49).
Auto Insurance: Is It Worthwhile to Cut Corners?
You may want to see also
Uninsured automobile coverage
In Ontario, all drivers are required by law to carry auto insurance. However, not all drivers comply with this mandate, and some may not have sufficient insurance to cover the full cost of damages in the event of an accident. Uninsured motorist coverage fills this gap by providing financial protection to the policyholder in such situations.
This type of coverage will help with the costs of bodily injuries, property damage, lost wages, and medical expenses resulting from an accident caused by an uninsured or underinsured driver. It also provides benefits to both the driver and any passengers involved in the accident. Additionally, it covers the cost of repairing or replacing the policyholder's vehicle if it is damaged or destroyed in an accident with an uninsured driver.
The minimum limit for uninsured motorist coverage in Ontario is $200,000, but drivers have the option to increase their coverage limits for additional protection. This can be done through the Family Protection Endorsement, OPCF 44R, which provides coverage of up to $2 million.
It is important to note that if you are involved in an accident with an uninsured driver, you should report it to the police and contact your insurance company as soon as possible. Additionally, since Ontario operates under a no-fault insurance system, you will deal directly with your insurer for any claims related to the accident.
Does Your Car Insurance Cover a Moving Truck Rental?
You may want to see also
Frequently asked questions
There are seven main types of car insurance in Ontario, which can be divided into mandatory and optional categories. The four mandatory policies include Third-Party Liability Coverage, Accident Benefits, Uninsured Automobile Coverage, and Direct Compensation Property Damage. The three optional types are Collision Coverage, Comprehensive Coverage, and Specified Perils Coverage.
The mandatory coverage in Ontario includes:
- Third-Party Liability Coverage: This protects drivers from legal liability if they cause property damage or bodily injury to a third party. The minimum coverage in Ontario is $200,000, but most people opt for $1 million to $2 million in coverage.
- Accident Benefits: This covers the healthcare expenses of the insured person and their passengers, including medical and rehabilitation costs not covered by the provincial health plan. It also provides benefits such as income replacement and caregiver expenses.
- Uninsured Automobile Coverage: This protects you if you are involved in an accident with an uninsured driver or a hit-and-run driver. It covers the costs of repairing your car, medical bills, and lost wages.
- Direct Compensation Property Damage: This covers repairs to your vehicle and its contents when you are not at fault in an accident. It is known as "No-Fault Insurance" as you can receive compensation directly from your insurance provider without having to wait for the other driver's insurance company to determine fault.
The optional coverage types in Ontario include:
- Collision Coverage: This covers the cost of repairing your vehicle if you are at fault in an accident. It is often more expensive than other types of insurance as it covers repairing or replacing your vehicle.
- Comprehensive Coverage: This covers damage to your vehicle caused by something other than a collision, such as theft, vandalism, or natural disasters. It is beneficial for people with expensive cars or those living in areas with frequent inclement weather.
- Specified Perils Coverage: This covers damage to your vehicle caused by specific events that you can hand-pick. It is less expensive than comprehensive coverage but also covers fewer situations.
