Auto Insurance in Ontario, Canada is required by law. Every motorist must not drive without it. It gives protection to you and your vehicle. In Ontario, you are given the opportunity to choose which coverage you can afford and that will suit your needs. There are two (2) main types of coverage, the 1) must-have coverage and the 2) optional coverage.
Must-have coverage is compulsory. By law, you must purchase this coverage. It includes:
(1) Third-Party Liability
This coverage protects you if someone is killed or injured or their property is damaged due to your negligence. It pays for the legitimate claims against you and for the costs of settling the claims including defense cost.
(2) Statutory Accident Benefits
If you are injured or killed in an accident anywhere in Canada and the United States, this provides you benefits regardless of who caused the accident.
(3) Uninsured Automobile Coverage
This protects you if you are injured or killed by an uninsured motorist or a hit-and-run driver where you are not at fault. It covers the damage to your vehicle cause by the unidentified uninsured motorist.
(4) Direct Compensation – Property Damage Coverage
This coverage means that when you are not at fault in an accident with another vehicle, your chosen insurer will pay for the damage of your vehicle and its contents.
Optional coverage is not required by law. This coverage is useful if you still owe money on your vehicle. If your car loan is not yet fully paid, the lien holder may require you to have the following coverage to protect their interest in your vehicle.
(1) Collision
This coverage pays for the damage to your vehicle either you are at-fault or caused by an unidentified vehicle or object.
(2) Comprehensive
This coverage pays for all insured damages to your vehicle except for collision damage. Damages caused by fire, theft, vandalism and the like are included in this coverage.
(3) All Perils
This coverage combines collision and comprehensive coverage. It includes all types of coverage unless specifically excluded.
(4) Specified Perils
This coverage pays only for loses specifically listed in the policy. Such perils are fire and theft.
Aside from the mentioned coverage above, you can also purchase a few additions to your policy. These additions are called Endorsements. The three (3) endorsements in a typical Ontario policy are:
(1) Loss of Use (OPCF 20)
This coverage pays for a rental vehicle needed after an at-fault accident.
(2) Waiver of Depreciation (OPCF 43R)
This is available for motorists with new vehicles of not more than two (2) years. This is to compensate you for insured losses as if the car were brand new.
(3) Excluded Driver Endorsement (OPCF 28A)
This removes coverage if the excluded driver listed on the form drives your vehicle. Such drivers are those with a poor driving record or those who frequently claims.
It is now up to the customers to weigh the pros and cons of purchasing any optional coverage. Most importantly, make sure that you know what your needs are in order to help you decide which add-ons to choose on top of the mandatory coverage.