Navigating the complexities of auto insurance in Ontario can be challenging, especially when determining the necessity of collision coverage. Many drivers question whether it’s worth the cost, what it covers, and how it differs from other types of auto insurance. In this comprehensive guide, we’ll explain everything you need to know about collision insurance, including its benefits, costs, exclusions, and when you should consider adding it to your policy.
What is Collision Insurance?
Collision insurance is an optional type of auto insurance coverage that pays for damage to your vehicle resulting from a collision with another car or object or if your car rolls over. Unlike liability insurance, which covers damages to other vehicles and property, collision insurance is designed to cover your own vehicle repair or replacement costs. This is regardless of who is at fault in a car accident. Though not mandatory in Ontario, Collision Insurance is recommended, especially if you have a newer vehicle.
Key Features of Collision Insurance:
- Covers damage to your vehicle after a crash with another vehicle or stationary object.
- Pays for repair or replacement costs minus your deductible.
- Available as an optional add-on to standard auto insurance policies.
- Coverage applies whether you are at fault or not.
What Does Collision Insurance Cover?
Collision insurance provides financial protection in situations such as:
- Crashes with other vehicles (whether you are at fault or not)
- Collisions with stationary objects like poles, guardrails, or fences
- Single-vehicle accidents, such as rolling your car over
- Damage caused by potholes
What happens if you do not have collision coverage?
Without collision coverage, you will have to pay out of pocket. If you are found to be at fault, you will have to pay to repair the damage to your vehicle.
What is Not Covered by Collision Insurance?
While collision insurance provides essential protection, there are some scenarios where it does not apply. These include:
- Damage from theft or vandalism
- Weather-related damage (hail, floods, fire, etc.)
- Damage from hitting an animal
- Mechanical failures or general wear and tear
For protection in these scenarios, you may need Comprehensive Auto Insurance, which covers non-collision-related damage.
Collision vs. Comprehensive Insurance: What’s the Difference?
Car insurance is a mandatory requirement for anyone driving in Ontario. You can’t own a vehicle to drive it without purchasing car insurance. According to Ontario law, each driver must have a basic auto policy, including:
- Third-party liability coverage
- Direct Compensation Property Damage (DCPD)
- Accident benefits protection
- Uninsured automobile coverage.
Beyond this, insurance providers have a wide range of additional protection that can be purchased, which caters to your individual needs and budget. Collision and comprehensive coverage are options you can add to your policy, but they differ. Many Ontario drivers confuse these coverages, and it’s understandable why. While both provide valuable protection, they cover different types of risks:
| Feature | Collision Insurance | Comprehensive Insurance |
|---|---|---|
| Covers vehicle damage from a collision | ✅ | ❌ |
| Covers damage from theft, vandalism, or natural disasters | ❌ | ✅ |
| Covers hitting an animal | ❌ | ✅ |
| Required by law? | ❌ | ❌ |
| Typically required for leased/financed cars. | ✅ | ✅ |
A combination of both collision and comprehensive coverage is often recommended for complete, well-rounded protection.
How Much Does Collision Insurance Cost in Ontario?
The cost of collision insurance varies based on several factors, including:
- Vehicle Type: High-end or newer cars may have higher premiums due to higher repair costs.
- Driver History: A clean driving record can lower premiums, while accidents and tickets increase costs.
- Deductible Choice: A higher deductible lowers monthly premiums but increases out-of-pocket costs if you file a claim.
- Insurance Provider: Rates differ among insurers, so shopping for quotes is essential. That’s where isure can help!
Depending on the factors above, collision coverage in Ontario can range from $200 to $800 per year on average.
Should You Get Collision Insurance?
While collision insurance is optional, here are some key considerations:
- Do you drive a newer or valuable car? If the repair costs are high, collision insurance is a smart investment.
- Is your vehicle leased or financed? Lenders usually require collision coverage.
- Can you afford out-of-pocket repairs? If an accident occurs, can you cover significant repair costs yourself?
- Your driving habits: Collision coverage can offer extra peace of mind if you frequently drive in high-traffic areas.
Filing a Collision Insurance Claim in Ontario
If you’re involved in an accident and need to file a claim, follow these steps:
- Ensure Safety: Check for injuries and move to a safe location.
- Report the Accident: Notify your insurance provider and, if necessary, the police.
- Document the Damage: Take photos and gather witness statements if available.
- Submit a Claim: Provide details to your insurance provider, including the police report (if applicable).
- Repair Assessment: Your insurer will evaluate the damages and recommend repair shops.
Additional Coverage Options: All Perils Insurance
Ontario drivers can consider All Perils Insurance, which combines collision and comprehensive coverage for added protection. This policy protects against collision damage, theft by someone you know, and more extensive risks. It is ideal for those seeking full coverage with fewer limitations.
Is Collision Coverage Necessary for a Rental Car?
It depends on your personal automobile policy. Some policies include rental cars in their coverage. If you have the OPCF 27 endorsement, it will apply to rental cars. Collision coverage is, however, a requirement if you are planning to lease or finance a car. So, it’s essential to find out if you have it before you arrange for additional coverage through the rental company.
Is DCPD coverage the same as collision coverage?
DCPD is the portion of your policy that compensates you directly when your vehicle is damaged in an accident for which you are not at fault. Collision coverage pays for damages when you are at fault.
If I settle a fender bender out-of-pocket, will it affect my insurance?
Possibly. You may settle damages with a third party without using your insurance company for minor damages. However, remember that the third party has up to a year (from the date of loss) to file an insurance claim for damages to their vehicle. Additionally, the third party has up to two years for any injuries that may have occurred. If they file their claim before the deadline, their insurance company will notify your insurance company, and your premiums can still be impacted. Talk to your isure broker about your situation.
When should I report a minor collision in Ontario?
When it comes to minor car collisions, many people are stuck scratching their heads about whether to report it. You must file a police report if:
- The accident resulted in over $2,000 worth of damage between both vehicles
- The accident has caused damage to municipal or third-party property
- A bystander was involved in the incident
- An injury or death occurs
- A government vehicle was involved
- A criminal act has taken place. (i.e., one of the drivers was under the influence or one of the involved drivers does not have a valid licence or insurance.)
Regardless of your collision’s severity, proper steps must be taken. When involved in a minor collision, your first step is to visit and report to a Collision Reporting Centre in Ontario. This should always be your first step when nobody is injured, and the damage to your vehicle appears to be less than $2,000. This should be done within 24 hours of the collision.
Does collision insurance cover a hit-and-run accident?
Yes. If you are the victim of a hit-and-run, it is your policy’s collision coverage that will reimburse you for damages. That is, provided this optional coverage was added to your policy before the accident. Remember, our isure brokers can answer any collision insurance questions you may have if you have been in an accident.
Final Thoughts: Do You Need Collision Insurance in Ontario?
Collision insurance is a valuable add-on that provides financial security in case of an accident. While it is not legally required in Ontario, it is highly recommended for drivers with newer vehicles, those leasing or financing, or those who prefer to avoid high out-of-pocket repair costs.
Before purchasing, compare quotes from top Ontario insurers to find the best coverage. If you’re unsure whether you need collision insurance, contact isure.ca today for expert guidance and a non-obligation auto insurance quote!
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