A Beginner's Guide to Auto Insurance

In Ontario and most jurisdictions across Canada it is compulsory to have auto insurance for your vehicle. There are many variations of policies and conditions governing auto insurance in different provinces but in Ontario the fines for vehicle owners, lessees, and drivers who do not carry valid auto insurance can range from $5,000 to $50,000. You could also have your driver’s license suspended and even have your car impounded if you are found driving without valid insurance.

🚙 Penalties for driving without insurance

The penalties and consequences increase if you have an accident while driving without auto insurance and you may end up being characterized as a “high-risk driver”. If that happens, you will not only face much higher premiums in the future, you may not be able to get auto insurance at all. In the case of a driver who gets injured in a car accident while driving in or being a passenger in an uninsured vehicle, neither may be entitled to claim income replacement to receive non-earner benefits. You may not even be able to sue another driver for compensation, even if they were at fault in the accident. Finally, if you are the driver of an uninsured automobile that causes injury or death you might be held personally responsible for their medical bills and other losses resulting from the accident.

🚙 Where to buy auto insurance

You have a number of options to consider when purchasing auto insurance for your vehicle. You can get your insurance from an insurance broker, an insurance agent, or a direct writer of auto insurance. Brokers offer auto insurance for a variety of insurance companies and work to find you the right rate and the right coverage for your automobile. Agents usually only offer insurance quotes from one company and direct writers are insurance companies that sell their own insurance products directly to the customer.

Before you buy, make sure to get a few quotes to compare and check with your family and friends about their experience in purchasing auto insurance. They may be able to recommend an insurance broker, an insurance agent or direct writer to help you. It is also easy to find agents and brokers in your area by checking the telephone directory or searching online. It is recommended to get at least three quotes from different direct writers, brokers and agents before you make your decision.

🚙 What is covered under an automobile insurance policy?

There are some basic auto insurance policies that are standard to almost all insurance companies. But every policy will be different and have minor variations on things like deductibles, limits and optional coverages) may differ from company to company. You have to provide them with some basic information like your vehicle and your driving record including any accidents or moving traffic violations. Then they can provide you with a quote based on that information and some general population data.

In Ontario, the basic package includes some minimum coverage. That includes third-party liability coverage that protects you if someone is killed, injured or their property is damaged by your vehicle. It will also pay the costs of settling any claims against the policy. You must as well have statutory accident benefit coverage. This provides everyone in accident with benefits including medical care and both non-earner and income replacement. Finally, you must also have direct compensation for property damage coverage that covers any damage to your vehicle and contents

🚙 Additional coverage

In addition to the basic insurance package there are many other options you can consider to enhance your auto insurance policy. This includes higher liability coverages and optional accident benefit coverages. This might be to increase the payout for income replacement from the basic $400 a week coverage to a maximum benefit of $1,000 a week. You can also increase the amounts for medical, rehab, and attendant care benefits. This would allow you to claim up to $1 million dollars in these types of benefits versus the minimum of $65,000. This could cover items not covered by provincial medical plans like wheelchairs, massage and physiotherapy services.

You can also choose to buy additional coverage for many other things including caregiver benefits, housekeeping and home maintenance services and death and funeral benefits. You can even select options that will financially look after any dependent children if you are killed or incapacitated in a car accident. You can cover almost anything you can think of, as long as you are willing to pay the premiums.