When shopping for auto insurance, the wording of your policy from every insurance company is similar. The Ontario Automobile Policy and related endorsements (add-ons to basic coverage) are forms approved by the Financial Services Commission of Ontario (FSCO).
However, not all companies provide all endorsement: Consult with your insurance representative to decide what coverage is best for you.
What is mandatory coverage? What is optional?
In Ontario, automobile insurance is required by law. Driving without insurance is illegal. The law calls for standard policy wordings and oversees the range of options. There are many insurers competing for price and service in the Ontario market. Brokers can reveal the insurers they represent and provide quotes from those companies. They will show you those prices on request.
To drive in Ontario, you must have direct compensation: property damage (DCPD) coverage, uninsured automobile coverage, liability, bodily injury coverage and accident benefits coverage are compulsory. By law, you must purchase these types of coverage.
Liability – Bodily Injury
If someone else is killed or injured or their property is damaged, liability-bodily injury coverage will pay for legitimate claims brought against you up to your coverage limit. The costs of settling the claims will also be covered. $200,000 is the minimum required amount of coverage in Ontario, but higher limits are recommended.
If you are injured or killed in an automobile collision anywhere in North America, regardless of who was responsible, accident benefits may include:
- Income replacement.
- Payments to non-earners who suffer a complete inability to carry on a normal life.
- Care expenses to persons who cannot continue as a primary caregiver to a member of their household.
- Medical, rehabilitation and attendant care expenses.
- Certain other expenses.
- Funeral expenses.
- Payments to survivors of a person who is killed.
Accident benefit details are specified in the statutory accident benefits schedule of the Insurance Act of Ontario, as well as The Insurance Bureau of Canada’s website at www.ibc.ca.
Please refer to your policy documents for the standard limits of coverage for each category.
If you are injured or killed by an identified uninsured motorist or a hit-and-run driver for which you were not responsible, uninsured automobile covers damage to your vehicle. The policy carries a $200,000 limit for injury or death and a limit of up to $25,000 for damage to your vehicle subject to a deductible of $300.
Direct Compensation – Property Damage (DCPD)
This coverage allows you to claim compensation for damage to your vehicle and its contents caused by someone else. DCPD means that, assuming that you are not at fault in a collision with another vehicle, your insurer will pay for damage to your vehicle and its contents. The standard $500 deductible can be increased or decreased.
You are not required by law to purchase collision or comprehensive coverage. However, if you owe money on your vehicle, your lienholder (the person or group you are making payments to if your car loan is not paid in full) may require you to have these coverages to protect their interest in your vehicle.
Collision or Upset
This coverage pays for damage to your vehicle to the extent that you are at fault or for damage caused by an unidentified vehicle or object. The standard deductible is $500 for collision or upset and $300 for comprehensive. Choosing a higher deductible may decrease your rates.
This coverage pays for all insured damage to your vehicle except collision (e.g., fire, theft and vandalism are paid).
Combining collision and comprehensive, all perils is the broadest coverage available. Unless some coverage is specifically excluded, it includes all types.
Specified perils pays only for losses caused by perils specifically listed in the policy (primarily fire and theft).
You may buy coverage beyond the minimum required by law to $1 million – $2 million. Typically, brokers and insurers will require a $1 million minimum.
Increased Accident Benefits
You may buy coverage beyond the minimum required by law. Optional benefits your insurance company offers are:
- Increased income replacement.
- Caregiver, housekeeping and home maintenance.
- Increased medical, rehabilitation and attendant care.
- Increased death and funeral.
- Dependant care.
- Indexation of benefits to inflation.
Please refer to your policy documents for optional increased limits or contact your broker.