What You Need to Know about Auto Insurance in Ontario

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The financial repercussions of car accidents can be astronomical, and car insurance is the only way most people would be able to pay for the damages. In Canada, some provinces offer insurance coverage through the government, while others require you to obtain a policy through private carriers. If you are shopping for auto insurance in Ontario, here are some important things you need to know.

Repercussions of Driving without Insurance

Ontario requires all drivers to carry an auto insurance policy; failure to maintain coverage can result in hefty fines ranging from 5,000 to 50,000 dollars. If you are in an accident and you do not have coverage, you may forfeit rights to sue the other party for injuries or other damages. If you injure another party, they can  come after you personally for financial compensation.

Required Insurance

Required insurance and minimum coverage amounts vary between jurisdictions. In Ontario, you are required to carry three different types of insurance. Third party liability coverage protects you in the event you injure or kill another person or damage their property—you must take out a minimum of 200,000. Statutory accident benefits coverage provides financial compensation to the policy holder regardless of who caused the accident. Examples of provided benefits include medical expenses, caregiver expenses and lost income. For this type of insurance, there are established maximum benefits under standard coverage and you would have the option to increase the payouts as well as add optional benefits that are not included with standard coverage.

You are also required to purchase direct compensation insurance, which pays out for damage to your vehicle and its contents, even if the other driver was at fault. But, the accident must meet certain criteria, such as the accident occurring in Ontario; if the conditions are not met, you can put in a claim under collision coverage or pursue damages from the other driver. Lastly, you need to purchase uninsured driver insurance.

Finding a Provider

The Registered Insurance Brokers of Ontario site provides a list of insurance carriers. Rates can vary greatly among insurers in this area, and it is important to do your homework. Many sites offer the ability to search quotes specifically in Mississauga or other parts of Ontario. It is important to find out how each carrier works in regards to renewals and cancellations—you need to know under what circumstances you can be dropped.

Calculating Rates

There are many factors Ontario insurance carriers use in determining rates, such as your age, driving record, the type of car you drive, where you drive, how much you drive and where you live. Factors companies cannot use in calculating rates include credit history, bankruptcy, employment status, whether you have credit cards, how long you have lived at your current residence, no-fault accidents, whether you own or lease the vehicle and whether you experienced a period where you had no insurance.

If you are unable to secure a policy because of factors that deem you a ‘’high-risk’’ driver, the Facility Association can help you find a policy. There are also a number of insurers who specialize in providing policies to these types of drivers.