Mandatory and optional auto insurance in Ontario
All motorists in Ontario are required by law to have car insurance, which is a critical requirement that plays an essential role in ensuring the safety of both drivers and the community as a whole. This legal requirement not only sets a standard for responsible car ownership, but it also acts as an essential mechanism for dealing with the unexpected challenges and risks associated while you're travelling to your destination.
That said, only some types of auto insurance policies are mandatory, while others are optional. We’ve outlined these policies for you in more detail below:
Third Party Liability coverage
Liability car insurance is a critical, mandatory safeguard that protects you from any financial obligations that may arise as a direct consequence of an accident in which you are found at fault. Medical costs, rehabilitation expenses, and property repairs are all included in this policy. The legally required minimum amount of coverage in Ontario is $200,000.00. That said, most drivers choose a higher level of liability car insurance to ensure they are completely protected if something goes wrong.
Accident benefits are also a required element of Ontario car insurance. The goal of this policy is to provide financial assistance to you as well as anyone else in your car in the event of an incident, regardless of who was at fault. This insurance provides coverage for a wide range of injuries and health-related costs. It can also be expanded to include extra costs like funerals or caregiving. Although accident benefits coverage is mandated by law, the conditions and scope of coverage may differ depending on your insurance company and the type of policy you choose.
Direct compensation – property damage (DC-PD) coverage
When you are involved in an accident caused by another driver in Ontario, a specific type of insurance comes into play. Instead of dealing with the insurance of the other driver, your own provider handles your property damage claim, thereby simplifying the claims process. It saves you the trouble of dealing with the other driver's insurance company directly, with your own insurance company serving as your representative and ensuring a quick and fair resolution of your claim. Ultimately, this policy is designed to make the post-accident process less stressful for you.
Uninsured automobile coverage
This coverage is required in the event of an accident involving an uninsured, unidentified, or underinsured motorist. When the at-fault driver lacks adequate insurance, it steps in to cover medical expenses, property damage, and related costs. It serves as a financial safety net, protecting you from bearing the entire financial burden in such circumstances.
Now that you have a better idea about the mandatory policies you must purchase take a look at some optional policies you may wish to purchase for extra peace of mind when you’re on route to your next destination:
This type of auto insurance coverage protects your vehicle by providing financial assistance in the event of extensive damage or the requirement for emergency repairs or replacements as a result of a collision. It's essential to remember that you may have to pay a deductible before your collision car coverage kicks in. This deductible is a predetermined amount you will be advised when you begin your car insurance policy. While choosing collision coverage is a personal choice, it is especially important if you have an outstanding vehicle loan or lease because it remains in effect until the vehicle has been fully paid off.
Comprehensive insurance provides a comprehensive shield for your vehicle, protecting it against a wide range of risks. This includes theft, fires, vandalism, severe weather conditions, natural disasters, and wildlife interactions. While comprehensive car coverage is not required by law, it is frequently required when financing a vehicle through a dealership, bank, or other lending institution. Ultimately, this policy acts as an extra layer of defence, shielding your investment from a variety of unpredictable and unanticipated occurrences.
Car insurance includes accident forgiveness. It assists drivers in avoiding having to pay more for insurance if they are found to be at fault in a collision. Insurance rates tend to rise after your first at-fault accident, which can be financially stressful. However, your company will waive the first accident under this policy, so your premium will not rise.
Keep in mind that the amount of accident forgiveness varies by company. It tends to be used for minor collisions that cause damage or injury and does not cover more serious incidents. Furthermore, accident forgiveness is typically limited to the primary policyholder, not secondary divers.
As you can see, there are multiple auto insurance policies available to you. Therefore, if you have further questions regarding these options, don’t hesitate to reach a BrokerLink insurance broker in Toronto or any of our other in-province locations for more information.
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How to file a car insurance claim in Ontario?
Dealing with the aftermath of a collision is stressful, which is why the team at BrokerLink is here to help you navigate the claims process from start to finish. If you've recently been in a collision or your vehicle has suffered damage from other means, and you have yet to inform your insurance company, here are the steps you need to take moving forward:
1. Contact your insurance company
Report the accident to your insurance company as soon as possible. Contact Your Insurance Company: As soon as possible, notify your car's insurance provider of the accident. Contact information can be found on your policy documents. Prepare to provide all accident-related information, including where it took place, the date and time, and an explanation of what went wrong.
2. Claim procedure
Your insurer will be assigning a claims adjuster to you who will walk you through every step of the claim process. It is likely that they'll request additional information, including the police report, testimonials from witnesses, and repair estimates.
3. Estimates for repairs
Obtain repair quotes from professional auto repair shops. Your insurance company might have a preference for shops or a list of authorized repair facilities.
4. Prepare to pay your deductible
Understand the amount of your deductible, which is the amount you must pay before your automobile insurance will cover the remainder. You must pay this when and where your vehicle is serviced.
5. Vehicle inspections
To find out the extent of damage and the estimated cost of repairs, an insurance adjuster may inspect the car's condition or rely solely on the repair shop's estimates.
6. Rental car
If you have a plan that includes rental car insurance, your auto insurance company can arrange for you to have a rental car while yours is in the shop.
7. Obtaining a settlement
Once your claim has been dealt with, your insurer will provide you with a settlement. This pays for repairs up to the amount of your deductible. If your vehicle is declared a total loss, you will receive the vehicle's determined value minus your deductible.
It is critical to maintain a direct line of communication with your insurance adjuster throughout the process. To ensure a smooth and effective claims process, be truthful while providing all of the necessary details.
Have you been in an accident? If so, give the team at BrokerLink a call. Our dedicated brokers are here to help you get through the claims process as quickly and easily as possible. We'll answer all your questions and serve as your advocate and liaison between you and your provider.
What it means to be ‘at fault’ in Ontario
Determining who is "at fault" in a car accident is critical in Ontario as it affects how insurance claims are dealt with and who bears the responsibility for covering the associated costs. Being "at fault" means that you are the individual who caused the accident.
When you are deemed "at fault" for a traffic accident, it usually means that your auto insurance company is mainly responsible for covering the costs of the collision's damages and injuries. Your insurer will handle claims from your policy as well as the other parties involved.
To determine fault in accidents, Ontario employs a set of rules known as the "Fault Determination Rules" (FDR). These rules specify particular circumstances and criteria to be used when deciding which driver or drivers are to blame. Traffic violations, right-of-way violations, and the decision-making of each driver leading up to the collision are all considered.
Occasionally, multiple drivers who are part of an accident may each have a small part in the division of fault. In such cases, each driver's insurance provider is liable for their proportionate share of the damages. In order to determine a level of fault, Ontario employs a percent-based criteria.
If you are at fault in an accident, the cost of your insurance may rise. The extent of the increase is determined by your insurer's policies, as well as the nature and severity of the accident. Multiple at-fault accidents on your driving record can lead to significantly higher car insurance premiums, which is why it is absolutely essential to stay up to date on safe driving tips and practices to ensure your safety as well as the safety of others while you are on the road.
How to save on car insurance in Ontario?
At BrokerLink, we recognize the importance of having a comprehensive insurance plan for an affordable price. If you're looking to cut costs on your insurance premiums, consider these strategies the next time you're renewing car insurance:
You can reduce the likelihood of accidents and tickets by practicing safe driving practices and staying conscious of road safety. Insurance companies have a tendency to provide discounts to safe drivers because they are thought to be less risky to insure.
Review your policies annually
Your driving habits can change throughout the year. So, when it comes time to renew your car insurance, make sure you're not paying for coverage you no longer need. Speak with an insurance broker about modifying your coverage to sufficiently protect you while staying within your budget. Remember, the key is to balance protection and affordability.
Winter tire discount
Winter tires do not need to be installed in Ontario, but doing so may qualify you for a discount. Snow tires perform better in the winter, lowering your chances of being involved in an accident. Therefore, by installing winter tires, insurance providers will deem you less of a risk to insure.
Switch to hybrid or electric vehicles
Another way to save money on car insurance in Ontario is to purchase a hybrid or electric vehicle. Many auto insurers have begun to offer incentives to drivers of hybrid or electric vehicles of up to 10% to encourage people to drive more sustainably.
Combine your insurance plans
Consider combining your Toronto car insurance with other forms of coverage offered by the same company, such as business insurance, home insurance, or even Ontario boat insurance. Many insurance companies provide reduced rates for combining these policies under one portfolio. Another plus is that your insurance coverage will be a lot easier to manage.
Opt to pay annually
Another approach that can be taken to save money on Ontario auto insurance is to pay for it annually instead of monthly. Many insurers allow you to pay in one annual payment or monthly installments. However, insurers charge an administrative fee for each payment made, which, in turn, increases your premium costs. So, if you can afford to do so, think about paying for your policy in one lump sum at the beginning of the year.
Look around for the best coverage
Take a little bit of time shopping for various vehicle insurance plans from various companies. Because just about every business has its own unique pricing model, comparing the policies allows you to find the most affordable option that best suits what you are looking for
Make your deductible more expensive
A deductible is a set amount of money that you must pay in advance of your insurance coverage kicking in. Lower insurance premiums may result from a higher deductible. Just make sure that you can afford a more expensive deductible, as you will need to bear a greater financial burden in the event that your car is damaged.
Factors that determine the cost of your Ontario car insurance premium
When calculating auto insurance rates in Ontario, insurance companies consider a variety of factors. It may be useful for Ontario drivers to understand what kind of information insurers are looking at. We've compiled a list of a few of the most significant factors influencing the cost of car insurance in Ontario:
- Where you live (and work - if you drive to work)
- Make, model, and year of the vehicle
- Claims history
- Annual mileage
- Driving experience
- Driving record
- Insurance History
- Local laws
- Vehicle usage
Why are insurance rates different throughout the province?
The fact of the matter is that the cost of insurance tends to vary across metropolitan areas due to a variety of factors that point to the unique characteristics and hazards associated with a given area. All of these differences are founded on empirical evidence as well as real-world evaluations. Let's take a look at a few of the reasons for this in greater depth below:
Density of the population
Urban areas with a higher population density are more likely to have substantial traffic delays, as well as increased volume of traffic, which increases the likelihood of a car accident. The more significant number of accidents can result in higher demands for reimbursements from the insurance provider, which can result in a more substantial cost of insurance in comparison to rural areas with fewer people living there.
Vandalism and theft
Urban areas with a higher percentage of vehicle theft and break-ins are considered to be less safe by insurance companies. The likelihood of these types of events affects the comprehensive coverage component of insurance rates, meaning if you opt for this additional coverage, you'll need to pay more for it.
Because of the greater possibility of vehicle damage or loss in natural disaster-prone cities caused by hurricanes, earthquakes, or floods, insurance premiums may be higher for individuals living in these types of regions.
The large number of drivers who do not have insurance may also have an impact on rates. Insurance companies may be obligated to account for potential damages from people who do not have insurance when calculating rates in cities, which tends to be more prevalent in areas with a larger number of residents.
Why work with a broker?
Working with an insurance broker can provide you numerous benefits that you may not be aware of. Take a closer look at some of the advantages you can experience when partnering with the team at BrokerLink:
Insurance brokers work separately from insurance companies
First and foremost, insurance brokers operate separately from insurance providers, unlike traditional agents. This enables us to prioritize your needs above all else. We'll take the time to understand what your needs are before providing unbiased advice on what policies you can benefit from as a motorist.
Brokers do all of the legwork
Another advantage of partnering with a BrokerLink insurance broker is that we'll do all of the legwork. Your experienced insurance broker will be 100% dedicated to delivering you the best possible coverage from the very first time you contact us. They will ask you to clarify your requirements, look at what different companies are offering, and review policies prior to providing you several tailored options.
Brokers are knowledgeable about auto insurance
Another reason why you should work with an Ontario-licensed insurance broker is because of the professional experience they hold. Brokers are fully licensed and have years of prior experience assisting Ontario drivers like you in finding high-quality auto policies that will make renewing your insurance more manageable and more streamlined from start to finish.
Help with filing claims
In the unfortunate event that you must file a claim, brokers can walk you through each step of the process, ensuring that you are aware of precisely what needs to be taken care of and that your claim will be dealt with as soon as possible.
Long-term assistance is available any time you need
Brokers provide ongoing assistance, replying to questions and assisting with any issues or revisions that may be required at any time. You can count on them to provide you with all of the information that you require.
What is the minimum legal driving age in Ontario?
The legal driving age in Ontario is 16 years old. At this age, drivers are entitled to apply for a G1 (learner's) license, which will put them on the road to becoming capable drivers. The province of Ontario employs a three-tiered licensing system—G1, G2, and G.
Each stage has its own unique set of rules and constraints, allowing new drivers to incrementally enhance their driving abilities. A number of conditions apply to the G1 stage, like being only able to drive under the supervision of a fully licenced driver and being unable to drive on the highway. Individuals who advance to the G2 stage will receive additional privileges, such as the freedom to drive on freeways without adult supervision. Last but not least, after meeting all of the criteria and completing the G2 phase, drivers can obtain a full G driver's licence with no restrictions on driving privileges.
Where can I find a competitive auto insurance quote?
Insurance renewal does not have to be complicated. Begin by visiting insurer websites to obtain instant online quotes. Alternatively, you can contact a licensed insurance agent or broker in person, over the phone, or via email for personalized advice. Take the time to compare quotes and identify potential savings you may qualify for. Lastly, before purchasing a car insurance policy, make sure to examine your coverage to ensure it meets your current needs.
Work with BrokerLink today
Are you in need of car insurance in Ontario? If so, BrokerLink is your one-stop shop for high-quality, customized insurance policies from some of Canada's top insurance providers. When you partner with our team, you can rest assured that your best interests are kept in mind every step of the way.
For a customized insurance quote, check out our free online quote tool or reach out to us over the phone or through email. For those looking for a face-to-face interaction, please do not hesitate to visit us at any one of our locations throughout Ontario! We look forward to working with you!
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If you’re a member of a group or association, you may be eligible for more discounts.
Contact us today
We can be reached by phone, email, or in person at any of our locations across the province. A BrokerLink insurance broker in Ontario will gladly assist you regardless of how you contact us. We also invite you to use our free online quotation tool, which is capable of providing you with an accurate estimate in minutes.
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Ontario Auto Insurance FAQs
How much is car insurance per month in Ontario on average?
"How much is car insurance per month in Ontario?" is a frequently asked question that many drivers tend to have. The cost of car insurance in Ontario costs around $2,000 per year on average, ranking it second in Canada only to British Columbia. However, it is very important to keep in mind that this average estimate is meant to be an estimate. The actual cost of insurance can vary greatly depending on a variety of factors that are unique to each driver. As such, we suggest comparing quotes online or speaking with an insurance broker for a more tailored quote.
Is car insurance the same as motorcycle insurance?
No, vehicle and motorcycle insurance aren't the same. While both provide vehicle coverage, the risks and requirements differ. Ontario motorcycle insurance is designed to cope with the particular risks and potential hazards of riding motorcycles, such as bodily harm, property damage, and coverage for custom parts and accessories.
Do I need more than one policy if I have numerous vehicles?
If you have numerous vehicles under one household, it may make more sense to purchase a multi-car policy rather than separate plans. This type of coverage is ideal for groups of people who share a home and have multiple vehicles. We suggest speaking to your insurance company about whether this option is available to you.
Do you get points on your licence if you drive without insurance?
Operating a vehicle with no insurance does not result in a demerit point being added to the driver's record like some other violations do. Demerit points are often assigned for infractions that pertain to dangerous driving. Keep in mind, however, that while no points are awarded, the penalties for operating a vehicle without an insurance policy are severe. Significant fines can be imposed for this offence, which can also be combined with further penalties such as vehicle forfeiture, the suspension of your licence, and more.
What is specified perils protection?
Specified perils protection is a type of car insurance that protects your vehicle from specific hazards such as theft, fire, windstorms, hailstorms, earthquakes, floods, and other natural disasters. Unlike comprehensive coverage, it pertains only to the risks that are listed in the policy. If you are only worried about the above-mentioned risks, this more limited coverage may be less expensive. However, before deciding on this type of coverage, it is essential to familiarize yourself with the risks and constraints listed by speaking with your insurer.
Can I drive another person’s car without insurance of my own?
Driving another person's car, such as a spouse or your parents, without having any insurance is fine if there is an existing auto insurance policy that offers coverage for the car you’re driving. Insurance follows the vehicle, not the driver. You're covered under their policy if the vehicle is insured and you're driving it with the permission of the owner. If you are pulled over by a law enforcement officer, you need to be able to provide proof of the car's insurance.
Will my insurance cover the cost if my car is stolen?
You may get taken care of if your vehicle's insurance plan includes comprehensive coverage. If your comprehensive coverage includes theft, your insurer may be able to help you with the financial burden of replacing your stolen vehicle. Aside from theft, this coverage can also reimburse you for break-ins, fires, water-related damage, and other incidents. Unless it is otherwise stated in your policy, comprehensive coverage is applicable only if the entirety of the vehicle is stolen, not the individual possessions.
How long does an accident affect your insurance rates?
In Ontario, an accident typically has a six-year impact on the amount you pay for insurance. Within this time, a motor vehicle collision remains on the driver's licence, which insurance companies can use to assess your risk and set your rates. However, the extent of impact can vary significantly based on the severity of the incident and the criteria they use to calculate rates, which is why it's essential to shop around and compare quotes before purchasing your new policy.
Does my credit score affect my premium?
Yes, insurance companies consider your credit score when calculating insurance costs. A higher rating frequently results in lower insurance rates as it implies that you are financially stable. When it comes to insurance firms, people with good credit scores are much less likely to file claims. Keep in mind, however, that the actual effect of your credit history on your premiums can vary from one provider to the next, as each one has its own pricing structure.
If you have any questions, contact one of our local branches.
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