What is Auto Insurance?
Auto insurance provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.
Auto insurance may also offers financial protection against theft of the vehicle and damage to the vehicle, sustained from things other than traffic collisions.
Auto Insurance Coverages
What's in a Standard Auto Insurance Policy? If you own a vehicle in Ontario, you are required to, at the very least, purchase the following automobile insurance coverage:
Third-Party Liability Coverage:
This section of your automobile insurance policy protects you if someone else is killed or injured, or their property is damaged. It will pay for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. By law you must carry a minimum of $200,000 in Third-Party Liability coverage but these days we would not recommend to go with less than $1 million. Many people chose to have $2 million liability coverage.
Statutory Accident Benefits Coverage:
This section of your automobile insurance policy provides you with benefits if you are injured in an automobile accident, regardless of who caused the accident, including supplementary medical, rehabilitation and attendant care, caregiver, non-earner and income replacement benefits. Options exist to increase most of these coverages for an additional price.
Direct Compensation - Property Damage (DCPD) Coverage:
Under certain conditions, this section of your automobile insurance policy covers damage to your vehicle or its contents if another person was at fault for the accident. It is called direct compensation because even though someone else causes the damage, you collect directly from your own insurer.
Note: Coverage under the DCPD section of your automobile insurance policy only applies if the following conditions are met:
- the accident took place in Ontario;
- there was at least one other vehicle involved in the accident; and
- at least one of the other vehicles is also insured by an insurance company that is licensed in Ontario or has signed a special agreement with FSCO to provide this coverage.
If these conditions are not met, then you can make a claim on your optional Collision coverage (if you have it), whether or not you are at fault. If you don't have Collision coverage, you may be able to pursue recovery from the at-fault driver.
Uninsured Automobile Coverage:
Protects you and your family if you are injured or killed by an uninsured motorist. It also covers damage to your vehicle caused by an identified uninsured driver.
Extra Coverage for Loss or Damage to Your Vehicle
In addition to the standard policy coverages you may also buy extra coverage for loss or damage to your vehicle including:
Specified Perils Coverage:
This coverage pays for losses caused by one of the following perils: fire; theft or attempted theft; lightning, windstorm, hail, or rising water; earthquake; explosion; riot or civil disturbance; falling or forced landing of an aircraft or parts of an aircraft; or the stranding, sinking, burning, derailment or collision of any kind of transport in, or upon which an insured vehicle is being carried on land or water.
This coverage pays for losses, other than those covered by Collision or Upset, including perils listed under Specified Perils, falling or flying objects, missiles and vandalism.
Collision or Upset Coverage:
This coverage pays for losses caused when an insured vehicle is involved in a collision with another object, including another vehicle, or rolls over. "Object" includes: another vehicle or a trailer that is attached to the vehicle that is covered by your insurance policy; the surface of the ground, and any object in or on the ground.
All Perils Coverage:
This combines Collision or Upset and Comprehensive coverages. In addition, it covers loss or damage caused if a person who lives in your home steals the vehicle that is covered by your insurance policy. All Perils also covers you if an employee who drives or uses, services or repairs that vehicle, steals it. For example, if you take your vehicle to a garage for repairs and an employee involved in the repair of your vehicle steals it, All Perils would cover you.
Note: A deductible may apply to all of the above coverages.
Optional Policy Endorsements
The most common policy endorsements are:
Transportation Replacement (OPCF 20):
This coverage, also referred to as "Loss of use", covers the cost of a rental vehicle while your vehicle is being replaced or repaired, if the damage or loss is caused by a peril for which you are insured.
Liability for Damage to Non-Owned Automobile(s) (OPCF 27):
This endorsement provides physical damage coverage to vehicles that you may operate but do not personally own – such as a vehicle that you have rented or borrowed – subject to a deductible. It also provides Liability, Accident Benefits, Uninsured Automobile and Direct Compensation-Property Damage coverages in specific circumstances.
Removing Depreciation Deduction (OPCF 43):
This coverage removes the insurer's right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage caused by a peril for which you are insured.
Family Protection Coverage (OPCF 44R):
This coverage protects you, or an eligible member of your family, to the same limits as your Third-Party Liability coverage if you are involved in an automobile accident where you are not at fault, with someone who carries less insurance, no insurance, or is an unidentified driver (e.g., hit and run).
Contact us to learn more about the right car insurance for you.
3250 Bloor Street West
East Tower, Suite 600
Toronto, ON M8X 2X9
Click Here to Email Us