Car Insurance With Borders: Driving Outside Ontario Adds Risk

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Do you travel outside Ontario often, either with your personal vehicle or a rental? If so, it is important to know what changes take place to your car insurance coverage as you drive across the border.

The benefits you receive in Ontario may not be the same if your vehicle is damaged outside the province.

No-fault insurance is not recognized in the United States and varies from province-to-province. In Ontario, most no-fault insurance claims are covered on all auto policies under Direct Compensation-Property Damage (DCPD), with zero deductible.

For claims outside the province however, other sections of your policy will come into play. Many of these sections are not standard and must be included as endorsements.

For example, if your vehicle is involved in an accident in New York where you are not “at-fault”, the DCPD coverage in your auto policy may not apply. If this same accident occurred in Ontario, it would.

The cost of repairing the vehicle is covered under different sections of your auto policy, depending on the location of the peril. Since the accident occurs outside Ontario (e.g. New York), damages to the vehicle will be compensated under Collision with the deductible recovered from the third party’s insured.

The use of a rental vehicle may be necessary following the accident and the cost would be covered under DCPD for claims within Ontario. Since this coverage does not apply outside the province, the cost of the rental vehicle would be covered under Ontario Policy Change Form 20: Loss of Vehicle Use with a typical limit of $1,500 (check with your broker as higher limits may be available).

Regardless of which driver was deemed “at-fault” and the extent of damages, this limit of $1,500 will not increase, unless you have chosen a higher limit. This limit may not be sufficient for the entire time the damaged vehicle is unavailable. In the case of out-of-province claims, you will be responsible for the cost of insurance on the rented vehicle unless your policy includes OPCF 27.

Ontario Policy Change Form 27: Legal Liability for Damage to Non-Owned Autos is an additional coverage that extends your current policy to cover rental vehicles and other non-owned vehicles across Canada and the continental US.

If you travel outside Ontario often (even Quebec), please contact your broker to ensure you have the right coverage for any out-of-province claims.

For more information, please contact Karen Spencer.

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