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How car insurance coverage works in Ontario

Car insurance is a requirement for all drivers Canada-wide, but it’s important to note that there are some provincial differences in coverage requirements that you should be aware of. Specifically, for Ontario drivers, auto insurance is provided by private insurance carriers and available coverage is broken down into two categories - mandatory and optional. Third-party liability coverage requires at least a minimum of $200,000, while a driver would have the option to increase their coverage up to $2 million. You are also required to have direct compensation, uninsured motorist, and accident benefits protections. On the other hand, you can opt out of coverages like collision, comprehensive, and various policy endorsements. Be sure to view the table below for more explicit details.

Here is an overview of the available car insurance coverages in Ontario:

Coverage Description
Public Insurance

Basic auto insurance coverage provided by the Provincial government. This generally includes liability, accident benefits and uninsured motorist coverage.

Available: No
Required: No

Private Insurance

Auto insurance policies created & sold by private insurance carriers. Though these carriers must still abide by Federal and Provincial regulations.

Available: Yes
Required: Yes

No-fault insurance

Having no-fault insurance doesn’t mean you can’t be found at fault. This coverage means you must first deal with your own insurance company for all claims, whether you’re at fault or not. But, Ontario will allow a no-fault driver to sue an at-fault driver for additional damages and costs that are not covered by their accident benefits.

Available: Yes
Required: Yes

Third-party Liability Insurance

Protects against damage caused by you while driving and includes injury and death to others and property damage. This is the only insurance coverage that is mandatory across Canada. Minimum coverage for Ontario is $200,000.

Available: Yes
Required: Yes

Accident Benefits

Covers your medical benefits if you’re injured in a crash, whether you’re at fault or not. The coverage includes your medical costs, while also paying for additional recovery costs, such as rehab, income replacement, and payment for and attendant care, if needed.

Available: Yes
Required: Yes

Direct Compensation-Property Damage (DCPD)

Covers damage to your vehicle and its contents, and for the loss of use of your vehicle when damaged – if another person was at fault. This coverage only applies if the crash occurs in a province where DCPD is mandatory, if two or more insured vehicles are involved, and if both insurers are licensed within that DCPD province.

Available: Yes
Required: Yes

Uninsured Motorist

Uninsured motorist coverage protects against injuries you and your family members sustain in a crash caused by an uninsured motorist. It can also cover your vehicle damages, if the uninsured driver is able to be identified.

Available: Yes
Required: Yes

Collision Insurance

Protects against damages sustained in a collision. This insurance covers you if your car is damaged in a crash – in both cases whether you crash into another other car or whether you crash into a stationary object.

Available: Yes
Required: No

Comprehensive Insurance

Protects against any losses a car owner may suffer, from events not related to driving. Such losses could include theft or damage from attempted theft; vandalism; environmental damage to a car from floods, fallen trees, and hail, etc.

Available: Yes
Required: No

Specified Perils

Covers your financial losses for damage caused specific perils – but only for perils chosen specifically for your policy. Available coverages are for theft; fire; damage from hail, lightning, wind, or flooding; earthquakes; explosions; riots; aircraft crash damage; and damage sustained during any transportation relocation.

Available: Yes
Required: No

All Perils

This combines the coverages you get with collision and comprehensive insurance. Additionally, all-perils also covers you if an employee, or someone who drives or services your car, steals it. It also covers you if someone you live with steals your vehicle.

Available: Yes
Required: No

Emergency roadside assistance

This service covers you for roadside callouts for emergencies such as dead batteries, towing, flat tires, keys locked in your car, empty gas tank, etcetera. Many insurance companies offer roadside assistance either included or in addition to other coverages.

Available: Yes
Required: No

*Table information sourced from http://www.ibc.ca (2017)

Historical Ontario auto insurance rates

Since the start of the year 2000 the Ontario car insurance industry has seen significant change in the average rates they charge to consumers. On average there has been a +52.35% increase in cost of car insurance in Ontario. The last few years have seen the rates level out a bit more, with subtle increases and decreases, but in the early 2000 there were significant price swings on both sides of the equation. Car insurance rate changes are a result of a few factors such as market inflation, insurance fraud and claims volumes. The volatility of the auto insurance market has resulted the residents of Ontario paying the most for their policies.

The historical rate changes shown below are based on all the drivers insured each year by every company in Ontario. The rates are approved and tracked by the Federal Services Commission of Ontario (FSCO). In order for an insurer to be approved for a rate change, as required by law, the proposed rates must be just and reasonable, not excessive, and not going to impair a company’s financial solvency. Insurers will submit their proposed changes to FSCO for approval along with supporting actuarial data.

Average Car Insurance Rate Change By Year

*Information and data sourced from https://www.fsco.gov.on.ca/en/auto/rates/pages/default.aspx (2018)

Factors that impact your Ontario car insurance rates

It pays to shop around to find your best rate. Even though an insurance application is fairly standard you will find that different insurance companies offer different rates based on their existing users, the number of active claims on their fiscal books, and overall risk tolerance calculations. Furthermore, there are several factors beyond your control that impact a risk tolerance calculation, like Ontario being the most expensive place in Canada for car insurance due to higher than average levels of insurance fraud. Here are seven factors auto insurance companies consider before offering a personalized car insurance rate in Ontario:

How to get cheap car insurance in Ontario?

Shop and compare

Research which car insurance company provides the best value for you and your vehicle. In Ontario, rates change four times a year, but lucky for you comparing rates with us is free.

Stay with your current insurer

Some auto insurance companies will give loyalty discounts to drivers who remain active with them for years. Especially if they add family members or multiple vehicles to their policy.

Bundle Your Policies

If you use the same insurance company for both your home and auto insurance needs, your insurer will often thank you with a dip in premiums.

Get a multi car discount

If you have multiple drivers and vehicles in the same household, by putting them all on one policy can save you money.

Increase your deductible

Your deductible is the portion you pay when settling a claim before your insurer will pay the rest. If you’re willing to double your deductible, it could save you money.

Ask about discounts

If you’re a member of an Ontario faction of CAA, a large corporation, union, or a school alumnus, it could help you get cheaper car insurance.

Pay premiums annually, instead of monthly

Paying monthly adds administrative costs to your insurer, so if you’re able to pay in full annually you can lower your premiums.

Maintain a good driving record

If you’re a safe driver, obey the rules of the road and drive according to road conditions you can reduce your chances of an accident. Car crashes stay on your insurance record for up to ten years and can result in higher premiums.

Install winter tires

You can save up to 5% simply by adding winter tires to your car. With winter driving conditions being so treacherous throughout Ontario it pays to be safe!

Keep track of your driving

You can even install a telematics device to collect driving data. With user-based insurance (UBI) you can earn discounts based on not driving far or often, and on advanced stats like how carefully you brake and accelerate.

Take a course

If you’re new to driving, a driver’s education course will save money. Your car insurance provider will think of you as a safer driver if you’ve been trained by professionals.

How to get an Ontario driver's licence

In 1994 the Ontario government introduced its graduated licensing system requiring each driver to progress through a 3-step educational program in order to be considered a fully licenced driver. Successfully participating in the graduated licensing system allows you to legally operate a car or motorcycle. Prior to this date a driver only needed to pass a single written and road test in order to become fully licenced. Once you begin this journey you have a 5-year window to earn your G licence and at a minimum it will take you at least 20 months to become fully licenced. Let’s take a quick look at this phased approach:

G1 licence (or level one) eligibility criteria:

  • You need to be at least 16 years of age

  • Provide proof of legal name, date of birth, and signature. (e.g. Passport, birth certificate)

  • Pass a vision test

  • Pass a written test about the rules of the road

  • Pay the associated written test fees

  • Can’t consume alcohol and drive

  • Must be accompanied by an eligible licenced driver

G2 licence (or level two) eligibility criteria:

  • You need to pass your first road test at any DriveTest Centre

  • You can attempt your first road test after at least 12 months of having you G1 licence or 8 months if you’ve completed a driver’s education course

  • You must pay an administrative fee

  • Can’t consume alcohol and drive

G licence (or level three) eligibility criteria:

  • You need to pass a more advanced road test at any DriveTest Centre

  • Must wait at least 12 months to attempt the road test

  • There is also another administrative fee to pay

Frequently Asked Questions about Ontario auto insurance

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