Mandatory and Optional Car Insurance Coverage in Ontario

1. Mandatory and Optional Car
Insurance Coverage in Ontario

2. Introduction
Car insurance is one of those personal expenses that no one wants to
pay, yet everyone knows they must have it and will be grateful they do if
they ever have to make a claim.
Car insurance rules and regulations vary from place to place, and in
Ontario there are both mandatory and optional types of coverage for
drivers.
Here is an overview of each one, according to the Insurance Bureau of
Canada.

3. Mandatory Coverage
Here are the different types of mandatory car insurance coverage you
must 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.

4. Mandatory Coverage
Accident 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.

5. Mandatory Coverage
Uninsured 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.

6. Mandatory Coverage
Direct 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.

7. Optional Coverage
The following types of coverage you are not required to purchase as
part 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.

8. Optional Coverage
Comprehensive
• 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.

9. Optional Coverage
All 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.

10. Optional Coverage
Increased Liability
• This optional coverage lets you increase your liability amount past
the minimum required by law, up to $1 million or even $2 million.

11. Optional Coverage
Increased 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.

12. Extras
Aside from just ‘mandatory’ and ‘optional’ coverage, you can also
purchase what are known as ‘endorsements’. These are enhancements
to your policy that make your coverage even more complete.

13. Extras
Here 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.