Ever wondered about the 5 parts of a car insurance policy? It’s worth knowing everything that you’re getting before you sign any policy contracts. Policies need your attention to detail so that you can fully understand how your coverage works. Let’s look at what you need to know about vehicle insurance in Ontario.
Driving without vehicle insurance in Ontario is a no-no as that can lead to you facing severe consequences such as a suspended license, impounded vehicle, or hefty fines. When purchasing vehicle insurance, several layers come with it to ensure you get quality protection for its duration. Vehicle insurance Ontario providers offer comes with four basic coverages, by law.
1. Third-party liability insurance
Third-party liability insurance protects you in case someone is injured or if there is property damage. Your policy must carry a $200,000 minimum. Standard third-party liability coverage pays for claims as a result of lawsuits filed against you and pays for any settlements regarding those claims.
If you choose to add to that $200,000 minimum, you can opt for increased third-party liability insurance where you can get up to $2 million. This upgrade can be done for a low fee in most cases, which is part of how car insurance works.
2. Direct compensation for property damage
Direct compensation-property damage covers damage to your vehicle and its contents. It would cover any loss of use of the car or its contents if another person were found at fault for an accident.
Though someone else caused the damage during your collision, you can collect money directly from your own insurer, which is tied to no-fault insurance in Ontario. Direct compensation-property damage coverage applies if the accident occurred in Ontario and at least one other vehicle was involved.
Furthermore, it applies if an Ontario insurance provider also insures at least one other car. If these conditions are not met, you might be able to seek recovery from the at-fault driver. If you have optional collision insurance, you can make a claim using that insurance no matter who is at fault for the accident.
3. Statutory accident benefits coverage
If you have been injured as the result of a collision, accident benefits coverage helps you pay for your medical expenses, rehabilitation, or attendant care. It offers replacement income in case you’re unable to work. These benefits are available regardless of who caused the accident, and there are options to increase this coverage as well.
This is particularly useful if you develop a sore neck after a car accident, or some other kind of condition that wasn’t immediately apparent. Even minor collisions can cause shock and adrenaline rushes, so it’s easy to miss the little things in the moment. We’ve been there, too.
4. Uninsured driver coverage
With uninsured insurance coverage, you and your family are protected against reckless and uninsured drivers. This section details coverage you get should you be injured or killed by a hit-and-run driver or by an uninsured driver. You also receive compensation for any vehicle damage caused by an identified, uninsured motorist.
5. Optional coverage options
When purchasing your vehicle insurance in Ontario from a private insurance company, as required, you can always enhance the protection your policy offers with alternative options.
You can buy a number of policy riders for your auto policy, including:
- Accident forgiveness
- Collision coverage
- Comprehensive coverage
- Caregiver insurance (up to $250 per month per dependent)
- Higher liability limits
You don’t have to use that coverage if you don’t want it. For example, you wouldn’t need collision insurance on an old car, but a new car or a moderately aged luxury vehicle would likely. If you don’t commute too far for work, then you probably don’t need to worry about windshield insurance claims—but if you commute more than 40 minutes for work (one way), then it might be worth getting comprehensive coverage to protect your rates in case other vehicles kick up stones into your windshield one too many times.
There’s also housekeeping and home maintenance expenses. If you’re unable to perform these tasks, you’re eligible to receive benefits if you need to hire someone to assume each role. Other optional coverage includes:
- Death and funeral benefits
- Dependent care benefits
- Indexation (matching benefits with inflation to maintain the same dollar value)
- Income replacement benefits
- Medical and rehabilitation
- Attendant care benefits
Meanwhile, if you need extra coverage for loss or damage to your vehicle, you can buy coverage enhancements such as specified perils coverage. This coverage pays for losses caused by natural disasters and other unpredictable events.
Those are the 5 parts of an insurance policy in a nutshell!
Opportunities for coverage and savings that go beyond the bare-minimum price, in most cases. We’ll walk you through each available option for your car insurance, starting with the standard stuff as well as any extra coverage you might want. Choose what’s necessary or what makes sense for your habits, experience, and situation.
