Auto insurance is mandatory for all motor vehicles in Ontario and must be renewed annually. Unlike in some Canadian provinces, it must be purchased through a private insurer. In addition to the mandatory insurance, there are various optional coverage add-ons. This article will explain the types of car insurance available in Ontario.
Which criteria determines the price of your car insurance in Ontario?
The price of your car insurance in Ontario depends on many factors. Insurance simulators are available online to estimate the price as determined by your profile and protection needs. The cost of car insurance in Ontario is based on factors such as:
- Your age
- Your gender
- How long you have had your driver's license
- Your driving history
- Where you live (this is used to estimate your likelihood of getting in an accident)
- The type of vehicle (e.g., if you have a model that is more likely to be stolen, your premium will be higher)
- How often you use your vehicle
- The number of people that drive the vehicle
With these car insurance pricing factors in mind, let's take a look at what insurance is required and optional in Ontario and what the differences are.
What type of car insurance is mandatory in Ontario?
In Ontario, there are four types of required vehicle insurance coverages mandated by law. These include:
- Third-party liability
- Statutory accident benefits coverage
- Direct Compensation-Property Damage (DC-PD)
- Uninsured Motorist insurance
Third-party liability covers material damage and bodily injury caused to others when you are at fault.
Statutory accident benefits coverage protects you if you are injured in a car accident and covers required medical care resulting from the accident.
Direct Compensation-Property Damage (DC-PD) is also included in mandatory insurance and covers damage to your car and contents based on a few conditions.
Uninsured Motorist insurance covers you and people in your vehicle if you are injured by an uninsured driver.
What are the optional auto insurance types available in Ontario?
Apart from the mandatory insurance coverages, Ontarians have additional options for non-mandatory coverage to provide further protection from expensive costs associated with vehicular damage. These are some of the options available:
- Collision car insurance protects you in the event of a collision with an object. It covers all property damage caused by the accident.
- Comprehensive car insurance protects you from everything except collisions, such as vandalism, broken windows, theft, fire and more.
- Specified perils auto insurance covers you only for the risks you have chosen. For example, you could purchase coverage against just fire.
- All-risk car insurance, is a combination of all the previously mentioned insurance coverages. It covers you for the majority of events which could occur to your car including incidents beyond your control, road accidents, and collisions. The deductible is the same for all damages.
Other add-ons available through auto insurance providers in Ontario
In Ontario, there are additional benefits that you can add to your existing insurance package to create a more comprehensive coverage when other expenses arise during a collision or an accident. These options help put the driver’s mind at ease while protecting everyone in the vehicle.
Here are five of the most popular insurance add-ons that add-ons that most Ontario car insurance companies offer for an additional cost:
- Leased vehicle: If you rent a vehicle, it will be insured in the same way as your already insured vehicle.
- Accident forgiveness: Your car insurance premium will not increase following your first accident.
- Replacement value for total loss: Your insurer will compensate you based on the purchase value of the vehicle without taking depreciation into account.
- Alternate transportation benefits: This temporarily covers the cost of rental, transportation, taxi or similar when you can't use your car.
- Emergency roadside assistance: This coverage helps you if you ever run out of gas, get stuck or have a flat tire.
There are many more coverage add-ons, but these are the most popular and useful for most Ontario drivers.
What is NOT covered by auto insurance in Ontario?
While auto insurance is mandatory in Ontario and provides coverage for collisions and accidents, car insurance does not cover the costs associated with mechanical breakdowns and car repairs.
Mechanical breakdowns can happen at any time and can cost the driver thousands of dollars in repairs. With a product like an extended car warranty, Ontarians can also be protected from these hefty bills. Here are some of the things that are not covered by auto insurance but are covered by extended car warranties:
Extended car warranties typically cover repairs for everything in a vehicle’s powertrain that could fail due to a breakdown, including:
- Transfer case
- Front and rear drive axle
- Electric/hybrid components
Other vehicle parts
Other critical vehicle parts that may be affected by a breakdown and might be covered in an extended car warranty, include:
- Air conditioner
- Fuel delivery components
- Front and rear suspension systems
- Cooling systems
- Enhanced electrical systems
- Supplemental restraint systems
- Emission systems
- Multimedia software
As mentioned, auto insurance companies often have add-ons that you can pay extra to receive more comprehensive coverage. Extended car warranties can also cover some of these additional costs, and depending on the provider, they can be offered at no additional charge. For example, with GuardTree, subscribers are protected from roadside assistance, trip-interruption (lodging and meals), and car rental costs at no additional charge to an extended car warranty subscription. Learn more about what expenses GuardTree subscribers are protected from here.
Choose the right Ontario car insurance provider with HelloSafe.
With various car insurance providers available in Ontario, it can seem daunting researching to find the right option for you. Luckily, HelloSafe has your back, so before purchasing an auto insurance policy in Ontario, be sure to check out their comparison of the most popular car insurance providers in Ontario.