When shopping for auto insurance, remember that the wording of your policy will be the same no matter which insurance company issues it because the Ontario Automobile Policy and related endorsements (endorsements are add-ons to basic coverage) are forms approved by the Financial Services Commission of Ontario (FSCO).
However, not all companies provide all the endorsements. Your insurance representative can help you decide what coverage is best for you.
What coverage is mandatory and what coverage is optional?
Automobile insurance is required by law in Ontario. You must not drive without it. While 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 tell you which insurers they represent and which companies they get quotes from, and 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. These are all compulsory. This means that, by law, you must buy these types of coverage.
Liability – Bodily Injury
Protects you if someone else is killed or injured or their property is damaged. It will pay for legitimate claims against you up to the limit of your coverage and will pay for the costs of settling the claims. The minimum required amount of coverage is $200,000 in Ontario though higher limits are recommended.
Provides benefits if you are injured or killed in an automobile collision anywhere in Canada and the United States regardless of who caused the collision. These 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.
The details of the accident benefits are set out in the statutory accident benefits schedule of the Insurance Act of Ontario, and are also available on 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 provided.
Protects you if you are injured or killed by an uninsured motorist or hit-and-run driver to the extent that you were not at fault. Covers damage to your automobile caused by an identified uninsured motorist. 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 for damage to your vehicle and its contents caused by someone else. DCPD means that, to the extent that you are not at fault in a collision with another vehicle, your own insurer will pay for damage to your vehicle and its contents. 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 types of coverage 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; however, you may choose a higher deductible in order to decrease your rates.
This coverage pays for all insured damage to your vehicle except for collision damage (e.g., pays for fire, theft and vandalism).
This coverage combines collision and comprehensive. It is the broadest coverage available and it includes all types of coverage unless specifically excluded.
This coverage 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 or $2 million. Typically brokers and insurers will require a minimum of $1 Million.
Increased Accident Benefits
You may buy coverage beyond the minimum required by law. The 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 speak to your broker.