Auto Insurance In Ontario: Minimum Coverage Requirements

If you own a vehicle in Ontario, you are legally required to have car insurance. The penalties for driving without insurance in Ontario include fines of up to $50,000 and a one-year suspension of your driver's license. There are four types of car insurance coverage that are mandatory in Ontario: Third-Party Liability Coverage, Statutory Accident Benefits Coverage, Direct Compensation-Property Damage (DC-PD) Coverage, and Uninsured Automobile Coverage.

Third-Party Liability Coverage

In Ontario, it is mandatory to have Third-Party Liability Coverage in your auto insurance policy to drive a vehicle. This type of insurance covers you if you are held responsible for damages or injuries to another person or their property. The minimum coverage required by law in Ontario is $200,000, but it is recommended to increase this amount to at least $1 million. This coverage will pay for any claims resulting from lawsuits against you, up to the coverage limit, and will also pay the costs of settling the claims.

The exact nature of the third-party coverage provided depends on the state. In an at-fault state, bodily injury liability will cover any medical costs related to injuries to other drivers or passengers in an accident. It may also reimburse the injured driver for any lost wages and provide restitution for pain and suffering. In a no-fault state, drivers typically claim medical coverage under their own insurance policy, regardless of who is at fault.

While the minimum coverage in Ontario is $200,000, it is worth considering increasing this amount. Accidents can be costly, and having sufficient coverage can give you peace of mind and protect you from financial hardship. It is recommended to have a liability limit of at least $1 million to ensure you are covered for vehicle damage, property damage, injuries, and even death.

Statutory Accident Benefits Coverage

There are options to increase most of these coverages, and it is recommended to do so. For example, you can increase your income replacement benefits to $600, $800, or $1,000 per week. You can also increase your medical, rehabilitation, and attendant care benefits from $65,000 for non-catastrophic injuries and $1 million for catastrophic injuries to $130,000 for non-catastrophic injuries and a combined total of $2 million for catastrophic injuries.

In addition to these benefits, Statutory Accident Benefits Coverage also provides dependent care benefits. This covers care for your dependents if you are injured in a car accident and unable to care for them. This benefit provides up to $75 per week for the first dependent and $25 per week for each additional dependent. It also includes an annual adjustment for inflation.

Overall, Statutory Accident Benefits Coverage is an important part of car insurance in Ontario, providing financial support and peace of mind to those involved in car accidents, regardless of fault.

Direct Compensation – Property Damage (DC-PD) Coverage

There are some conditions that must be met for DC-PD Coverage to apply. The accident must have taken place in Ontario, and there must have been at least one other vehicle involved. Furthermore, at least one of the other vehicles must be insured by a company licensed in Ontario or have signed a special agreement with FSRA to provide this coverage. If these conditions are not met, you can claim on your optional collision coverage, if you have it, whether or not the accident was your fault.

You can also choose to add a deductible to your DC-PD Coverage to lower your premium. This is an amount that you pay towards the cost of any repairs before your insurer covers the rest.

It is worth noting that, as of January 2024, it is possible to opt out of DC-PD Coverage. However, this may not be the best option for you, so it is recommended that you speak to your insurance agent, broker, or provider before making this decision.

Uninsured Automobile Coverage

Uninsured motorist coverage is essential because, according to the Insurance Research Council, about one in eight motorists is uninsured. This coverage can pay for medical expenses, lost wages, pain and suffering, and funeral expenses resulting from an accident caused by an uninsured driver.

In Ontario, uninsured motorist coverage typically provides up to $200,000 in protection. This amount is intended to cover injury costs that may exceed your own accident benefits limits. It's important to note that damage claims under this coverage may be handled differently depending on whether the at-fault driver can be identified and whether they fled the scene.

While uninsured motorist coverage is mandatory, there are optional coverages you can add to your policy for additional protection, such as collision coverage and comprehensive coverage. These optional coverages can provide further peace of mind when driving in Ontario.

It's worth noting that the cost of uninsured motorist coverage is relatively affordable, often amounting to less than $25 to $50 per vehicle annually. By including this coverage in your auto insurance policy, you can ensure that you have the necessary protection in the event of an accident involving an uninsured driver.

Collision or Comprehensive Coverage

Collision coverage is an optional type of auto insurance that covers the cost of repairing or replacing your vehicle if it is damaged in a collision with another object or vehicle. This includes accidents where your car rolls over. It also covers hit-and-run incidents, provided they are reported to the police.

Collision coverage is not mandatory in Ontario, but it is highly recommended, especially for newer vehicles and if you have a history of accidents. It may also be required if you lease your vehicle or to meet the financial conditions of your auto loan. Collision coverage will increase your premiums, but choosing a higher deductible can lower your rates.

Comprehensive coverage, on the other hand, is also optional and covers repairs or replacement of a vehicle that suffers damage from something other than a collision. This includes damage caused by fire, theft, vandalism, weather conditions, and hitting an animal. Both collision and comprehensive coverage are advised for complete protection.

Frequently asked questions