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The ABCs of Ontario Automobile Insurance

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Ontario auto insurance rates continue to climb across the province. There are many reasons for these increases, including the increasing cost of repairing vehicles after a claim.

To help you understand the cost of your car insurance and exactly what goes into the price you pay, I broke down all the coverages in an automobile insurance policy.

Accident Benefits

This section of your car insurance policy provides benefits if you, your spouse, children, and listed drivers on the policy are injured in a motor vehicle accident. There are basic, standard benefits with options to purchase customized coverage as required.

Claims Protection, Accident Waiver, Responsible Good Driver

Each insurance company has their own name for this optional coverage but typically it protects your driving record with your first responsible accident from being rated against you.

Collision Coverage

Provides physical damage to your vehicle when it is involved in an accident and you are considered responsible. Hit-and-runs when you can’t identify the third party are covered under this section and if you file a police report, the hit-and-run would not be held against you as an at-fault accident.

Comprehensive Coverage

Coverage for physical damage to your vehicle not caused by the impact of another vehicle, including fire, theft, glass breakage, hail, etc.

Direct Compensation

Coverage for physical damage to your vehicle when you are considered not responsible for a motor vehicle accident. Your own insurance company pays for the damages to your vehicle caused by another party (this is what no-fault refers to). Fault is determined and if you are found not-at-fault your own company pays for the damages to repair your vehicle with $0.00 deductible once they confirm the other party has valid insurance in place.

Family Protection Endorsement (OPCF 44)

This endorsements provides you with the same limit that you carry as your Liability limit to protect you from others that carry a lesser amount of Liability coverage. More simply, if you were involved in a motor vehicle accident, whereby a court granted you a settlement that was over and above the other party's liability limit, OPCF 44 would provide you the difference between the other party's limit and yours.

Liability Insurance

There are two parts to auto liability coverage: bodily injury and property damage caused to third parties. Liability insurance is mandatory in Ontario and provides coverage if you are responsible for damage to third parties and their property. Most policyholders have a $2 million limit, but if you don’t, I suggest you contact your car insurance broker to consider increasing the limit. You may be surprised how quickly these expenses add up!

Transportation Replacement and Liability to Non-Owned Vehicles

Typically both of these coverages are bundled to provide you a rental vehicle if you experience a claim. Transportation Replacement would provide you a rental vehicle and Liability to Non-Owned Vehicles provides the liability and physical damage extensions to drive a rental vehicle. This extends your coverage any time you rent a vehicle and extends for listed drivers on your policy.

Note: Be cautious with the coverage that a credit card provides because many times the fine print covers physical damage to the rented vehicle but does not extend liability to the driver of the vehicle. Carefully read through your credit card's fine print to confirm if coverage does include liability.

Uninsured Motorists

This provides coverage for you and your vehicle if you are involved in a motor vehicle accident with a party that does not have insurance.

As you can see, Ontario automobile insurance is not as easy as 1-2-3. Car insurance has become more expensive over the past number of years because the cost to repair vehicles, the costs associated with medical costs and rehabilitation, and the increasing amount of expensive technology included in new vehicles.

Learning the car insurance alphabet may seem overwhelming, but that's why you have a professional insurance broker. If you have any questions about your personal insurance needs, please contact us.

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Ottawa, ON K2P 0M3
www.scrivens.ca | 613-236-9101
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