Mandatory auto insurance coverage protects personal injury and property damage. Across Canada, the minimum coverage required by law to purchase is also known as mandatory coverage. Where and how you can purchase mandatory auto insurance coverage is set out by provinces and territories. In Ontario, you can buy from a private insurer. Whereas out west, government insurers are your only option. So, to drive in Ontario, what is mandatory auto insurance coverage? What is the least amount of coverage you can legally drive with? Let’s find out.

Mandatory auto insurance in Ontario

Plain and simple, if you are an Ontario resident who intends to drive, you need to have auto insurance. The minimum requirement for a standard auto insurance policy in Ontario is:

Fines for vehicle owners, lessees, and drivers who do not carry valid auto insurance can range from $5,000 to $50,000. Your driver’s licence may be suspended and your vehicle impounded if you drive without valid auto insurance. Suppose you are convicted of driving without valid auto insurance. In that case, your insurance company may consider you a “high-risk driver” and charge you higher premiums or refuse to insure you entirely.

Non-government regulated mandatory coverages

There are other instances when car insurance coverages are mandatory that aren’t government-regulated. One such scenario is if you lease or finance your vehicle. When leasing, you will need to meet the leasing company’s requirements. For example, the company loaning you money for the vehicle will dictate requirements for auto coverage/policies. Since your leasing company still owns the vehicle, you must have certain coverage in place to protect the vehicle. Leasing companies will require you to have comprehensive insurance and collision insurance. Collision coverage will protect the vehicle from damages, accidents, and fund repairs if you are at fault. Whether you lease or finance your vehicle, the lender will typically ask you to carry both collision and comprehensive insurance.

“One-way” insurance coverage

If you’re trying to save money or you drive an older vehicle, you might want to pay less than the standard mandatory auto insurance premium. So, what is the most basic mandatory coverage in Ontario? A one-way car insurance policy is a basic type of auto insurance that includes limited coverage for liability ($200,000). In short, only damages you cause to others will be covered and you will need to pay out of pocket for repairs to your vehicle. For example, in any scenario where your car may need a repair — say, an object falls on your vehicle or you collide with another vehicle and are at fault —there is no coverage in a basic policy. You will need to purchase optional coverages – such as collision and/or comprehensive coverage – or pay out of pocket.

The upside to one-way insurance? When it comes to how much money you’ll save with a one-way policy, that depends on your vehicle. Drivers with more valuable vehicles tend to save more. A one-way policy can be up to 50% cheaper than a standard policy if your car has a high replacement value.

A wide range of protection from accidents, automobile theft, vandalism, fire, or weather events will not be available to you with one-way insurance.

“In-between” coverage

Standard or “Two-Way” coverage provides greater protection. It covers both damage you may cause to others and damage to your vehicle. It also covers your vehicle in the event of a collision or rollover, as well as for other risks, like theft, vandalism, hail, or fire. However, if you’re driving an older vehicle, you may be wondering if there is a “happy medium” between both extremes of insurance coverage. If you want to save on your insurance policy without completely insuring it one-way, you can also choose “in-between” coverage. This means that you can insure your vehicle “one-way” in terms of civil liability, but you can choose to add coverage for events such as fire, theft, vandalism, and broken windows. This allows you to reduce your insurance premium by removing just one part of the coverage, namely collision and rollover.

Opting out of DCPD

Ontarians can now choose to opt out of DCPD coverage on their auto policy. The OPCF 49 Endorsement stipulates that in the event of a collision where you are at fault, you can choose not to be compensated for costs related to the accident.

The OPCF 49 form states: “Not being compensated means you will not be reimbursed for any loss or damage to the described automobile, including”:

While doing so will provide a premium discount, the trade-off of less coverage may not be worth it in many cases.

Mandatory auto coverage: A wrap-up 

If you want to pay as little as you can for auto insurance, it means that you are restricting the coverage available to you. Basic or mandatory auto insurance coverage includes the four staples of car insurance: liability, accident benefits, DC-PD, and uninsured drivers. There are, however, other options that you may want to consider. However, avoid cutting coverages unless you first speak with your insurance company or isure representative. They can give you the facts about how your coverage will look if you adapt basic coverage. In these times of soaring gas prices and living expenses, the lure to “trim the fat” on your insurance policy is tempting. Just be sure you understand your auto insurance needs before you do — an isure representative will be happy to help walk you through this.

Related Articles