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No one enjoys being on the receiving end of an auto collision. However, you can take some comfort in the fact that your damages will have coverage by your auto insurance policy. But what happens when you are the one responsible for the accident? In Canada, there are many auto insurance coverages that are mandatory, such as DCPD, third-party liability and accident benefits. However, collision coverage insurance isn’t one of them—it’s optional insurance that you can add to your existing policy. Let’s take a look at auto insurance from the perspective of an accident to help you gain a better understanding of collision coverage in Ontario.

What is collision insurance in Ontario and what does it cover?

Collision coverage is a type of auto insurance that covers the cost of your repair bills if you damage your vehicle in an accident by hitting an object or another car. It won’t matter who is at-fault for the accident – with collision coverage, you’ll be covered, for the most part.

Collision coverage is an optional type of auto insurance that covers the cost of your repair bills when your vehicle is in a collision with another object or rolls over. An “object” can include:

  • Another vehicle
  • A trailer that is attached to a vehicle that has coverage under your policy,
  • The surface of the ground, as in a rollover accident, and
  • Any object on the ground, such as a garage door, street sign or guardrail

Collision coverage is separate from other mandatory coverages within your auto policy, such as:

  • Direct Compensation Property Damage (DCPD) coverage pays to repair damage to your vehicle if you are found to be not-at-fault involving an accident within Ontario.
  • Your Third-Party Liability (TPL) covers the cost of damages to the other vehicle and/or property suffers damage in the accident.

FYI: Collision coverage is a requirement if you are planning to lease or finance a car.

What is not covered by collision insurance?

Collision insurance covers costs for repair or replacement of your vehicle if you are at-fault. If your vehicle requires repairs or replacement due to something other than a collision, it will be taken care of through comprehensive insurance.

Factors that can influence your auto coverage

Although collision coverage is optional in Ontario, it can offer peace-of-mind on the road. There are many factors that you should consider if you are contemplating adding additional coverage to your existing policy, such as:

  • Your commute to work
  • New drivers on your policy
  • Road trips or cottage vacations
  • Frequency of highway driving
  • Urban or rural dwelling
  • Capacity to pay out-of-pocket for car repairs
  • Age of your vehicle

Choosing collision coverage

When considering if you should choose collision coverage or not, take these factors into account:

  1. Car value: The cost of coverage should be weighed against the value of your car and chosen deductible. An older car’s value diminishes; newer cars and luxury vehicles can lose a lot of money without it. If your car is worth $1,000 and your deductible is the same amount, collision coverage is probably not necessary.
  2. Personal financial situation (i.e. the potential of having to pay out-of-pocket to repair or replace your vehicle)
  3. Driving history: If you have a history of MVAs, it can help with the cost of your claims.
  4. Deductible amount: Deductibles for coverage is mandatory, and typically comes in options of $500 and $1,000. However, it’s possible to find higher deductibles. The higher the deductible you choose, the lower your premium cost. You will only pay this amount if you file an accident claim.

Points to consider when setting your deductible:

  • Age of your vehicle
  • Price of your vehicle
  • Your driving experience
  • Occasional drivers

What’s the difference between collision and comprehensive coverage?

Collision and comprehensive coverage are both options you can add to your policy, with a distinct difference – whether or not you are driving the vehicle:

  • Collision insurance: Covers costs of the repair or replacement of your vehicle if you are at-fault. It will cover you for a collision with another car or an object, such as a tree or pothole. Our variable Canadian weather and never-ending construction season have caused many drivers to opt-in for collision coverage.
  • Comprehensive coverage: Covers repairs or replacement of a vehicle that suffers damage from something other than a collision. This can include a fire, theft, hitting an animal, vandalism or a wind/hail storm—basically, factors that are often outside of your control.

How collision coverage works

 To help better understand collision coverage, here are a few scenarios:

  1. At-fault accident with collision insurance: You have coverage, but need to pay the deductible
  2. At-fault with no collision insurance: You will pay out of pocket for repairs, and if it is a write-off, you will have to flip the entire bill to replace it.
  3. Not-at-fault with collision insurance: You have complete coverage.
  4. Not-at-fault with no collision insurance: You are covered by the other driver’s Third-Party Liability or by your own DCPD.
If you’re in a hit-and-run where the driver who causes the damage to your car flees the scene before being identified, you will not be covered. That is, unless you have collision insurance.

The cost of coverage

In order to understand how your premium is calculated, you’ll likely need to answer a few questions. Don’t be too shy to ask some questions too. Every insurance company is different, and the cost of collision coverage will depend on factors, such as:

  • The make and model of your vehicle
  • Your driving record
  • Where you live and work

Generally speaking, collision is estimated to add between 10% and 20% to the cost of your policy, depending on your insurer.

Although it is not mandatory in Ontario, collision coverage is an integral part of your auto protection. There are many factors that should go into your decision of whether or not to add or remove collision insurance form your policy. That’s where we can help. Call one of our isure representatives today to assist you in gaining a better understanding of collision coverage in Ontario.

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