Driving in Ontario comes with some challenges. Unpredictable gas prices, coupled with the slow return of commuters to the roads, have many people considering the costs of owning a car. Maybe you suspended your coverage, or perhaps you have put off buying a car until now. If you own a vehicle in Ontario, auto insurance isn’t optional—it’s the law. But while most drivers know they have to be insured, many aren’t exactly sure what their policy actually covers. Understanding the basics can help you feel more confident about your coverage and make better decisions about optional add-ons. If you’re wondering how to get the best car insurance, you’re not alone. Our complete guide to auto insurance will take you through the basics of an insurance policy to help educate you on which coverage is best for you.
What Auto Insurance Means
Auto insurance is not only about insuring your vehicle; it is also about protecting you, the driver. Auto insurance protects you and your vehicle against unforeseen risks by covering potential damage. Just as seatbelts are legally required for all drivers, auto insurance is also required by law. No matter your age or years of driving experience, auto insurance is mandatory. If you own or drive a car, you must have insurance from a private insurer in Ontario. Many insurance policies include a deductible, which is the portion of a claim paid by you, the policyholder, for damages. Agreeing to pay a higher deductible means your auto insurance premiums will be lower.
The Four Mandatory Auto Insurance Policy Coverages
By law, all standard auto insurance policies in Ontario typically include these four protections:
1. Third-Party Liability Coverage
Third-party liability coverage protects you if you’re held legally responsible for injuring someone else or damaging their property in a car accident. For example, if you cause a crash that results in injuries, your third-party liability helps cover the costs.
The legal minimum is $200,000, but most drivers choose $1 million or $2 million for extra protection.
2. Accident Benefits Coverage
If you or your passengers are injured in a collision, accident benefits coverage helps cover:
- Medical and rehabilitation expenses
- Income replacement if you can’t work
- Caregiver and attendant care costs
- Funeral and death benefits in tragic cases
These benefits are available no matter who was at fault for the accident.
3. Direct Compensation – Property Damage (DCPD)
In provinces with no-fault insurance, DCPD means you will deal with your own insurer for car repairs and other damaged property. If you’re not at fault for an accident in a province without DCPD, you will need to seek property damage compensation from the other party’s insurance company. DCPD applies when another driver is at fault for damaging your car or its contents. Instead of going through the other driver’s insurance company, you deal directly with your own insurer.
Ontario has undergone numerous auto insurance reforms over the past decade, mainly due to the high cost of auto insurance in the province. Attempts to rein in fraud, reduce accident benefits coverage, and mandate rate decreases across the board have had some positive success. However, the Ontario Government added one more cost-saving option in the OPCF 49.
What Does It Mean to Unselect DCPD or Opt Into the OPCF 49 Endorsement?
If you are in an accident for which you are not at fault, or partially at fault, you will be responsible for the following costs:
- No claim reimbursement for repair costs.
- If the car is a total write-off, you won’t get its value back.
- No compensation for the days your vehicle is in the shop for repairs.
- Car rental fees will not be subsidized.
- The contents of your car – any damage or loss won’t be covered.
Nevertheless, if you decide to step away from DCPD coverage, remember that it doesn’t have to be forever. You always have the option to reinstate it in your insurance policy. But it’s worth noting that if you choose to reinstate it, you’ll need to catch up on the premium difference.
Important note: DCPD only applies if the other driver is also insured in Ontario (or another jurisdiction that has a similar agreement).
4. Uninsured Automobile Coverage
Sadly, not every driver on the road carries proper insurance. This coverage protects you and your family if you’re injured or killed in a collision caused by:
- An uninsured driver
- A hit-and-run driver who can’t be identified.
Optional Coverages to Consider
While the four coverages above are mandatory, you can customize your policy with optional coverages for adding protection, depending on your needs:
- Collision Coverage – Pays to repair or replace your car if you’re at fault in an accident.
- Comprehensive Coverage – Protects against theft, vandalism, fire, falling objects, and other non-collision risks.
- Endorsements (OPCFs) – Add-ons that provide extra protection. Common examples include:
Getting Your Auto Insurance Quote
Choosing the right insurance coverage for your needs can seem daunting. With so many types of coverage, add-ons, and variables that determine what you will pay in premiums, you may find there isn’t a straightforward answer. However, there are a few steps you can take to feel confident that you’re getting the right amount of coverage at a competitive rate.
First, it’s essential to understand the various components of an auto insurance policy. For more detailed information, you may also want to consult the Insurance Bureau of Canada (IBC) for general information on the car insurance rules specific to your province. We encourage you to contact isure if you have any questions or concerns regarding auto insurance.
Drive with Confidence
Request your free car insurance quote now and get the coverage you deserve.
Next, we’ll help you compare auto insurance rates to find the best options. Several factors contribute to determining your insurance premiums. Here are just a few:
- Personal details: Factors such as your age, gender, and level of driver’s license play a role in your premiums. Insurers also look at your driving record when calculating your rate.
- Your location: Where you live influences how much auto insurance you pay. If you live in the downtown core, you have a higher risk of theft, accidents, and damage. This increases the number of overall claims for your area, therefore increasing premiums.
- The make, model, and production year of your vehicle: Your vehicle is as unique as you are. Therefore, the way it affects your premiums is unique, as well. For example, if your car is older, it is more likely to break down, which affects your risk. Conversely, newer models may have advanced safety features, which affect the amount of premium you pay, as well.
- Amount and type of usage: Hardly driving your car during the pandemic? You may qualify for lower car insurance rates. Some auto insurance companies offer telematics solutions to help you save more. Additionally, if you use your vehicles for business purposes, you may need to add business use on your personal auto insurance policy or purchase a separate commercial automobile insurance policy.
Lastly, please speak with our professional isure brokers to set up your policy. There are many discounts available that may apply to you and can reduce the cost of your premiums.
In just a few simple steps and in under three minutes, isure can provide you with an online auto coverage quote.
Auto Insurance Policies: Final Thoughts
Understanding what’s in your standard auto insurance policy is the first step in ensuring you’re adequately protected. The mandatory coverages are in place to provide every driver with a baseline level of security, but optional add-ons can offer peace of mind tailored to your specific situation. Helping you find the right combination of mandatory and optional coverages to suit your needs is our specialty.
To get the most value out of your car insurance, speak to one of our isure representatives. At isure, we make it easy for you to contact us directly by phone, email, or through isure’s Facebook page! Feel free to ask our brokers about what’s the best fit for you. We’ll give you objective advice on how much coverage you should carry and what your insurance really covers.
ONCE YOU’VE GOTTEN YOUR AUTO INSURANCE, YOU’RE READY TO HIT THE ROAD! DRIVE SAFELY!
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