Automobile Insurance - Why?
Ontario law requires that all vehicles driven on the road must have
automobile insurance.
Drivers found driving without insurance can immediately have their
licence suspended and vehicle impounded. A conviction of driving a vehicle
without insurance could result in a fine that can range from $5,000 to $50,000.
More importantly, if you are found to be at fault for an accident causing
injury or death to another person, you may be held personally responsible for
his/her medical costs and other losses. This could be in the millions of
dollars!
Back to Top
Basic Coverage
In Ontario, the minimum amount of coverage required to drive on the
road is:
|
Third-Party Liability Coverage: |
|
This provides coverage for you or other insured persons if
someone else is killed or injured or their property is damaged in an
automobile incident. It will pay for legitimate claims against you
or other insured persons up to the limit of coverage purchased and includes
the cost of settling claims. By law you must carry a minimum of $200,000
in Third-Party Liability coverage. |
|
Statutory Accident Benefits Coverage: |
|
This section of the automobile insurance policy
provides benefits if you or other insured persons are injured in an
automobile accident, regardless of who caused the accident including
supplementary medical, rehabilitation, attendant care, caregiver,
non-earner and income replacement benefits. |
|
Direct Compensation - Property Damage
(DC-PD) Coverage: |
|
Provides coverage in Ontario, under certain conditions, for damage to
your automobile and to property it is carrying, to the extent that
another person is responsible and has valid insurance coverage of their
own. It is called direct compensation because even though someone
else causes the damage, you collect directly from your own insurer,
instead of the person who caused the damage. |
|
Uninsured Automobile Coverage: |
|
Protects you and your family if you are injured or killed
by a hit-and-run driver or by an uninsured motorist. It also covers
damage to your vehicle caused by an identified uninsured driver.
This is subject to a $300 deductible. |
Back to Top
Optional Coverages
In addition to the basic policy coverages you have a number of options to increase
the basic coverages and purchase additional coverage for loss or damage to your
vehicle:
|
Third Party
Liability Coverage: |
|
Although the minimum
liability coverage prescribed by law is $200,000 this is not nearly
enough.
In today's increasingly litigious society awards for serious injuries
very often exceed $1,000,000.
Most serious injury claims will take 4-6 years to be settled.
In order to protect against what a court could award in the
future, you need to have higher limits of protection before the accident
occurs today. A minimum of
$2,000,000 should be purchased.
Higher limits beyond $2,000,000 are also available and
recommended. |
|
Increased Accident
Benefits: |
|
The optional benefits are:
Increased
Death and Funeral – the
standard level of death benefits paid to the surviving spouse
and dependant of a person who is killed ($25,000 to surviving
spouse; $10,000 to each surviving dependant) can be doubled by
purchasing the optional coverage. This coverage also increases
the standard funeral expense benefit from $6,000 to $8,000.
Increased
Income Replacement –
the standard level of income replacement in the policy ($400 per
week maximum) can be increased by purchasing optional coverage
so that the weekly limit is up to $600, $800 or $1,000. All
income replacement benefits are based on 70% of gross weekly
income.
Increased
Medical, Rehabilitation and Attendant Care –
the standard benefit pays up to
$50,000 for medical and rehabilitation expenses, and up to
$36,000 for attendant care expenses for non-catastrophic
injuries. If catastrophically impaired, the standard benefit
pays up to $1,000,000 for both medical and rehabilitation
expenses and up to $1,000,000 for attendant care expenses. You
can purchase A) optional medical and rehabilitation benefit of
$100,000 ; B) optional attendant care benefit of $72,000; or C)
an optional medical, rehabilitation and attendant care benefit
of $1,000,000.
Caregiver, Housekeeping and
Home Maintenance Expenses –
The standard caregiver,
housekeeping and home maintenance expenses benefit is available
only for a person who is catastrophically impaired. You can
purchase an optional benefit to provide this coverage for all
injuries.
Dependant
Care –There is no
Standard coverage. If you are employed and have dependants
(i.e. people relying on you for financial support) then there is
an optional benefit intended to pay additional expenses incurred
for their care. The optional coverage provides $75 per week,
plus $25 for each additional dependant to a maximum of $150 per
week.
Indexation Benefit –
This optional coverage will
increase certain weekly benefit payments and monetary limits on
an annual basis to reflect the changes in the cost of living.
Annual adjustments are
made according to the Consumer Price Index for Canada (or CPI
Canada). |
|
Specified Perils
Coverage: |
|
This coverage pays for losses caused by one of the
following perils: fire, theft or attempted theft, lightning, windstorm,
hail, or rising water; earthquake; explosion; riot or civil disturbance;
falling or forced landing of an aircraft or parts of an aircraft; or the
stranding, sinking, burning, derailment or collision of any kind of
transport in, or upon which an insured vehicle is being carried on land
or water. |
|
Comprehensive
Coverage: |
|
This coverage pays for losses, other than those covered by Collision
or Upset, including perils listed under Specified Perils, falling or
flying objects, missiles and vandalism. |
|
Collision or Upset Coverage: |
|
This coverage pays for losses caused when an
insured vehicle is involved in a collision with another object,
including another vehicle, or rolls over. "Object" includes:
another vehicle or a trailer that is attached to the vehicle that is
covered by your insurance policy; the surface of the ground, and any
object in or on the ground. |
|
All Perils Coverage: |
|
This combines
Collision or Upset
and
Comprehensive coverages. In addition, it covers loss or damage
caused if a person who lives in your home steals the vehicle that is
covered by your insurance policy. All Perils also covers you
if an employee who drives or uses, services or repairs that vehicle,
steals it. For example, if you take your vehicle to a garage for repairs
and an employee involved in the repair of your vehicle steals it, All
Perils would cover you. |
Back to Top
How Is The Cost Of Automobile Insurance Determined?
The cost of automobile insurance is the combination of many factors which
include the make and model of the car, your driving record, how much you
drive, where you live and your age and gender.
Most insurance companies rate makes and models of vehicles according to their
actual claims experience, such as the cost of repairs, the rate of injury, and
the likelihood that a particular vehicle may be stolen or involved in an
accident.
Your driving record: The better your driving record, the lower your
premium will be. Your driving record includes the number of years
you have been licenced in Canada, the number of at-fault accidents you have had in a given
number of years, the number and type of driving convictions in the past three
years, and whether you are a newly licensed driver and have taken an
Ministry of Transportation approved driver-training course. Some
companies will forgive your first at fault accident. Others may
increase your rates. Most companies will allow one minor
conviction with no impact on your rates however if you have two or more tickets in the
last three years, it will most likely affect your record. A combination of
at-fault accidents and driving convictions will not only cause higher premiums
but can also restrict the number of companies that will insure you.
How much you drive: The more time you spend driving the higher
your chances are of becoming involved in an automobile accident. Therefore
insurance companies look at the type of driving you are doing, the total
kilometers driven in a year and the distance driven to work. Driving
to work also includes driving to a subway, bus, or train station. If you
live close to work, you will probably have a lower premium than someone who
lives far from work or who needs to use his or her vehicle for business.
Where you live: Automobile insurance rates are generally higher in larger
urban centers. This is due to a larger volume of vehicles on the
road, which increases your likelihood of getting into an accident. Also, more
vehicles are stolen in urban areas.
Your age: Generally older drivers have fewer accidents than younger drivers.
Male drivers under the age of 25 have a significantly higher amount of
accidents.
Back to Top
What's Needed For A Quote
In order to quote you a premium, we will require some basic information
about:
- you;
- your vehicle;
- your driving record;
- your current broker, agent or insurance company; as well as
- any other drivers.
It’s a good idea to have all this information on hand before you contact
us.
You must be accurate and honest, and advise us of any changes in your
circumstances. Non-disclosure or misrepresentation of any facts could
cause your policy to be null and void, and leave you without protection in the
event of a claim. Also this could cause your future rates to go up
and restrict the number of companies that will insure you.
Back to Top
Compare Quotes
There are a few things you need to know when shopping for automobile insurance.
Legitimacy: Remember, insurance can only be sold by a licenced broker, agent or
insurance company in Ontario. Visit FSCO's website at:
www.fsco.gov.on.ca
for a list of insurance companies and agents licenced to do business in Ontario
and www.ribo.com for a list of licenced
brokers.
Rates: Rates may vary greatly from one company to
another. It is our job as a broker to find a company that has competitive
rates and the coverage that will meet your needs. We work for more than
one company and can provide a comparison of different quotes.
Coverage: When comparing prices make sure you are comparing coverages as
well. As a broker this is our expertise.
While automobile insurance is standardized to some extent, there can be differences in coverage (for example: deductibles, limits and optional coverages). Make sure the coverages are
comparable on each quote you receive. Different companies will also
have different practices. You should question what the company's practices
are in the event that you have an at-fault claim, obtain your first ticket or under what
circumstances your insurance would not be renewed.
Service: You may get what you paid for. It is not always the right
decision to buy the cheapest insurance policy you can find as the service
may not be there. As a broker we can help you compare service as well as
price.
Back to Top
Deductible
The deductible is the amount which you agree to pay, per claim or per
accident, toward the total amount of an insured loss. Your deductible can
vary, depending on the type of coverage you have and the percentage of fault you
are assigned in the event of an accident. There are deductibles for Direct
Compensation-Property Damage (DC-PD) , Collision or Upset, Comprehensive, All
Perils, and Specified Perils coverages.
The higher the deductible the lower the premium. For example, you
may save 10 percent on your collision premium by having a $1000 deductible
rather then $500.
Back to Top
|
|
|
