In Ontario, automobile insurance rates are regulated by the Financial Services Commission of Ontario (FSCO). Because of this, there are few ways you are able to reduce your premium immediately. Of course, the best way to keep your premium low is to practice defensive driving techniques and avoid accidents altogether.
Avoiding accidents is easy to say but sometimes they are unavoidable and are simply just “accidents”. That’s why we recommend including “Accident Forgiveness” on your policy. This means your current insurer will not consider your first accident when determining your premium. If you decide to switch insurers less than 6 years after the accident, the accident will likely increase your premium.
Review your coverage each year and notify your broker of any changes. For example, if you no longer commute to work or the distance of your commute has changed, you should update your policy to reflect the change in risk.
Let us know if you plan on taking the new O-Train when it becomes operational and leave the car at home, if you now work from home, if you don’t use your vehicle for business purposes, if your annual kilometre usage decreases, etc.
Another way to ensure your car insurance premium is accurate is to combine your property insurance with your automobile insurance can be a significant cost-saver because many insurance companies provide a multi-policy discount on both policies. Similar to how keeping your internet, TV, and phone with one carrier provides a discount.
While you are reviewing your car insurance policies for accuracy and coverage needs, it’s important to also reflect on your personal needs for Accident Benefits. Accident benefits are monies paid out in the event of an automobile claim due to an accident.
Standard accident benefits limits, which are mandatory for all automobile insurance policies in Ontario, are described as follows:
NON-CATASTROPHIC AND CATASTROPHIC INJURIES
Medical, Rehabilitation and Attendant Care
$65,000
Income Replacement
70% of gross income to max $400 per week
Death and Funeral
$25,000 lump sum to eligible spouse; $10,000 to each dependant; max $6,000 for funeral
Third-Party Liability
$200,000 minimum for claims as a result of lawsuits against you
Tort Deductible
$37,983.33 (2018 amount)
CATASTROPHIC INJURIES ONLY
Medical, Rehabilitation and Attendant Care
$1,000,000
Income Replacement
70% of gross income to max $400 per week
Caregiver
Up to $250 per week for first dependant plus $50 for additional
Housekeeping and Home Maintenance
Up to $100 per week
Are these coverage amounts sufficient to cover all medical bills in the event of an accident? That could be the case for some people, but others often go above-and-beyond these limits. If you are self-employed and no longer benefit from disability insurance through work, could you survive on $400 per week for income replacement?
Due in part to the regulatory nature of the auto insurance industry in Ontario, your premiums are determined based on the information about the vehicle, the driver(s) history, and location. Thankfully, there are still options available to ensure you have the appropriate coverage at the best available price.
Talk to your broker to determine what level of coverage is best-suited for you and your family's needs. Drive safely!
