Mandatory and optional car insurance coverage in ontario
Mandatory and Optional CarInsurance Coverage in Ontario
IntroductionCar insurance is one of those personal expenses that no one wants topay, yet everyone knows they must have it and will be grateful they do ifthey ever have to make a claim.Car insurance rules and regulations vary from place to place, and inOntario there are both mandatory and optional types of coverage fordrivers.Here is an overview of each one, according to the Insurance Bureau ofCanada.
Mandatory CoverageHere are the different types of mandatory car insurance coverage youmust have to drive in Ontario.Liability • Liability protects you if another person is killed or injured or their property is damaged. Liability will pay for legitimate claims against you up to the limit of your liability coverage. • The minimum amount is $200,000 but most providers recommend you carry higher.
Mandatory CoverageAccident Benefits • This provides financial benefits if you’re injured or killed in a vehicle accident anywhere in Canada or the US, regardless of whose fault it is. The benefits typically include: ▫ Medical Expenses ▫ Funeral Expenses ▫ Income Replacement ▫ Care Expenses to caregivers who can’t continue in their role. ▫ Payments to survivors of someone who is killed.
Mandatory CoverageUninsured Automobile • This coverage helps you if you are injured or killed by a motorist who is uninsured, or in a hit-and-run scenario. • It also covers damage to your vehicle that was caused by another motorist. • This covers has a $200,000 limit and anything up to $25,000 is subject to a $300 deductible.
Mandatory CoverageDirect Compensation – Property Damage • DCPD as it is known, lets you put forth a claim for damage to your own vehicle, where someone else caused the damage. • DCPD also includes the contents of the vehicle. • The standard DCPD deductible is $500, but it can be increased or decreased.
Optional CoverageThe following types of coverage you are not required to purchase aspart of your car insurance policy, although many drivers do anyway.Collision • This coverage pays for damage to your vehicle in a situation where you are at fault, or for damage that was caused by an unidentified vehicle or object. • If you still owe money on your vehicle, the lender may require you to purchase collision coverage.
Optional CoverageComprehensive • This coverage pays for any damage to your vehicle, except for damage caused by a collision. This includes, theft, vandalism and fire. • If you still owe money on your vehicle, the lender may require you to purchase collision coverage.
Optional CoverageAll Perils • This coverage is a combination of collision and comprehensive, and is the broadest car insurance coverage you can get.Specified Perils • This coverage only pays for losses that are specifically listed in the insurance policy. Fire and theft are the primary ones.
Optional CoverageIncreased Liability • This optional coverage lets you increase your liability amount past the minimum required by law, up to $1 million or even $2 million.
Optional CoverageIncreased Accident Benefits • You have the option of buying: ▫ Increased income replacement ▫ Increased death and funeral ▫ Increased medical, rehab and attendant care ▫ Housekeeping, caregiver and home maintenance. ▫ Dependant care• For optional collision insurance, the standard deductible is $500 and it is $300 for comprehensive, but you have the option of making it higher. Increasing the deductible will usually reduce your car insurance rates.
ExtrasAside from just ‘mandatory’ and ‘optional’ coverage, you can alsopurchase what are known as ‘endorsements’. These are enhancementsto your policy that make your coverage even more complete.
ExtrasHere are the six most common endorsements:• Rented or leased vehicle coverage• Loss of Use – pays for a rental if yours is being repaired from damage caused by insured peril.• Liability coverage for damage to a non-owned vehicle.• Additional coverage to offset tort deductibles.• Family protection coverage• Removing depreciation deduction. This means your provider can’t remove depreciation from the value of the vehicle when covering damage.