Why auto insurance is mandatory in Ontario

Car insurance in Ontario is much more than a “nice to have.” It’s legally required for you to drive in compliance with Ontario’s auto insurance law. It’s mandatory for every driver in Ontario to have valid car insurance. Failure to have insurance can result in costly fines, license suspensions, and possibly even having your vehicle impounded.


Why is car insurance mandatory?

The concept of the mandatory auto insurance law protects all individuals that are involved in a motor vehicle accident, some of which may otherwise not be able to afford costs associated with healthcare and rehabilitation. Furthermore, the victims of automobile accidents would be very unlikely to see much compensation from the drivers that are deemed to be at fault in many cases. This is essentially how car insurance works.

Although car insurance is compulsory across Canada, each province has established provincial minimum coverage requirements. In Ontario, for example, the minimum amount of third-party liability coverage required is $200,000.

However, it’s important to keep in mind that given the number of multi-million dollar lawsuits the minimum legal requirement is not recommended. It’s a good idea to discuss with your broker an appropriate liability limit for you considering your personal circumstances.



When did car insurance become mandatory?

The Compulsory Automobile Insurance Act was introduced in Ontario in 1990. This auto insurance law established the the bare-minimum levels of car insurance for drivers on the road so that people wouldn’t be left without a means to recover and support themselves if another driver involved them in an accident.

There have been several amendments to the Act since then, but the core principles remain the same.


Everything else about Ontario’s auto insurance law

Accident benefit coverage is a part of that required coverage by law. This provides supplementary care for you if you’re injured in an accident no matter who’s at fault, including:

  1. Medical care
  2. Rehabilitation
  3. Attendant care
  4. Income replacement

Even if you’re involved in an accident with an unidentified hit and run driver—or worse yet, you’re involved in an accident with an uninsured driver—your mandatory insurance coverage will protect you.

In addition to the mandatory coverage, there are several other options that might be of interest to you. You can insure your vehicle to be repaired in the event of at-fault accidents, fire, theft, and vandalism. Also, you can purchase additional features such as accident protection or vehicle depreciation waivers that can provide you with additional benefits if you were to make a claim.


Details required for car insurance

If you’re about to start driving, here’s what you’ll need to buy your insurance policy:

  1. Driver’s license
  2. Current insurance company (if you have one)
  3. Previous tickets, even if you earned them while on a learner’s permit
  4. Previous claims, even if you earned them while on a learner’s permit
  5. Your vehicle information

Car insurance has been made mandatory for the protection of all of us. Just remember that there are as many important optional features to your policy as the mandatory ones so it’s important to know what’s right for you.

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