Auto Insurance in Ontario – Basics

What does an Ontario auto insurance policy need to include?


Let’s talk about what a standard Ontario car insurance policy includes as well as what other coverages you may need.

It’s mandatory to have auto insurance in Ontario. Not having auto insurance can lead to fines, driver’s license suspensions and vehicle impounds.


Mandatory car insurance coverage


No matter the kind of car you drive or how old your car is, your car insurance must, at the very least, have a specific amount for these four types of coverage.

  • Third-party Liability Coverage: This will cover you if you were to injure someone or damage their property. Ontario drivers must have at least $200,000 in third-party liability coverage. There are options to increase this coverage.
  • Direct Compensation Property Damage: Here, the damages and loss of use of your car and its contents are covered if you are in a collision. Under this coverage, if you are not at fault your accident claim will be paid out directly by your insurer.
  • Uninsured Automobile Coverage: Here, you and your vehicle are covered if you suffer from any damages by an uninsured motorist or hit-and-run driver. It will also pay benefits to families who lost a loved one in an accident.
  • Accident Benefits Coverage: Here, it doesn't matter who is at fault, many expenses, including medical expenses, are covered. There are options to increase this coverage. Talk to your Five Star Insurance Broker about what coverage best meets your needs.


Additional coverage options to consider 


In addition, to the mandatory insurance coverage available to customers, here are some options to choose from that go beyond the minimum protection.

  • Specified Perils: Here, your vehicle is protected from specified perils like losses due to fire, hail, floods or theft.
  • Comprehensive: Here, you are likely to find yourself completely covered for any damages, except for collision or upset.
  • Collision or Upset: Here, you can be protected from any damage to your vehicle that was caused due to a traffic collision.
  • All Perils: Here, customers receive the widest coverage level, combining both collision and comprehensive coverage, along with increased theft protection.
  • Accident Forgiveness: Here, you are protecting and ensuring your car insurance rates won't increase after an at-fault or partially-at-fault accident.
  • Removing Depreciation Deduction: Here, when you suffer a total loss, your settlement value will be the purchase price of your vehicle.


Factors to consider when choosing an auto insurance policy


When you decide to buy auto insurance, you need to take a few things into account.

Premiums: Whenever you buy any kind of insurance, you pay an insurance premium. The amount of premium you need to pay is dependent on various factors like

  • Type of insurance
  • Age
  • Gender
  • Medical history
  • Type of car you drive 
  • The amount of coverage you need
  • Deductible
  • Claim history
  • The amount you owe for credit protection insurance

Your premium amount is derived from the probability of you making a claim. The more likely you are to make a claim, the higher your premiums.

  • Risk: In insurance, the term risk is based on the likelihood that an insured event may occur in the future. So, if you have a series of medical issues, your life insurance premiums will be higher. Similarly, if your driving record has accidents or speeding tickets, you are likely to pay a higher car insurance premium versus someone who doesn't have one.
  • Deductibles: When you buy car insurance, you may be required to pay a deductible, which is where you agree to pay a portion while the insurance company pays the rest. The higher your deductible, the less you may pay in premiums.


Tips for saving money on auto insurance


  • Get only the coverage you need: Your insurance premiums are dependent on your age, where you live and your driving habits. So, you may not necessarily require a fully loaded policy. Five Star Insurance Brokers will help you figure out your needs.
  • Compare rates: Our brokers will compare rates across multiple insurance companies for you.
  • Loyalty: When covered under the same insurance provider, some insurance companies will offer loyalty discounts when you reach certain milestones.
  • Bundle policies together: Do you have homeowner, motorcycle or boat insurance? Or what about multiple people in your home who also need auto insurance? Some insurers provide steep discounts for bundling your insurance services.
  • Pay your premiums all at once: Insurance companies offer good discounts on premiums if they are paid all at once during policy renewal. 


What to do in the event of an accident


If you have unfortunately met in an accident, you need to file a report with your broker, agent or insurance company within seven days. If you fail to report within a reasonable amount of time or without a good explanation, your claim may not be honored. 

Provide the following when making your report

  • Policy number
  • Make, model, year, registration and license plate number of the vehicle
  • Driver's name and license number 
  • Date, time and location of the accident
  • The extent of injuries
  • Number of passengers involved
  • The extent of damage
  • Your description of the accident
  • Names and license numbers of all drivers involved
  • Names of the insurance provider for all the drivers involved
  • The name and badge number of the investigating officer 


Once you have filed your claim, a claims adjuster will contact you and may further require you to complete a Proof of Loss form. The adjuster will finally take into account the entire event and determine how much the insurer will cover, and guide you through the claims process.


Figuring out what level — and how much — insurance you need can be frustrating. So reach out to a trusted brokerage like Five Star Insurance Brokers for the best car insurance quotes. We pride ourselves in finding you cost-effective, quality auto insurance in Canada. 


Five Star Insurance Brokers work with 15 insurance companies to give you the best car insurance quote. After all, with so many coverage options, finding cost-effective but quality coverage for your vehicles and properties can be complicated, but we will vet and carefully select the best insurer for you.