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Ontario Car/Auto Insurance
Ontario Insurance Coverage Information
If you have any questions that are not answered on this page, please do not hesitate to contact us here.
1. Are all house insurance policies the same?
There are many similarities but policies do differ. It's better to have an "All Risk" policy versus a named peril policy. The "All Risk" is the best money can buy. But beware, just because it says "All Risk" does not mean every claim/scenario is covered. There are numerous exclusions that are part of every property policy.
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2. I have just bought a new home but won't be moving in right away. When is the best time for me to get home insurance?
You need to ensure your home insurance coverage begins as soon as you become the legal owner of the property. Before moving into the house, make sure to ask your broker or agent if your current policy covers your contents at both old and new locations, and also while in transit. Moving into a newly built home? It's important to note that theft insurance is only applicable when a building is ready for occupancy; vacant buildings are not normally insured for more than 30 days.
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3. What type of perils (causes of loss) are insurable under a typical home policy?
The most common types of perils are fire and theft but some examples of others that can be insured against include:
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Electrical currents |
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Explosion |
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Lightning |
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Smoke (only if released suddenly from malfunctioning cooking or heating devices, not from fireplaces) |
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Vandalism (while building is normally occupied) |
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Water damage (this is a complex issue; be sure to discuss it carefully with your agent or broker) |
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Wind and hail (usually applies to the outside of a building with exceptions for antennas, satellite dishes, etc.; the interior of a building and its contents are covered only if the storm has first created an opening) |
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4. Acts of God are never covered, right?
Wrong, things like a tornado, lightning, and hail are always covered, however earthquake is a common exclusion but this coverage can be added to your policy, for an additional premium.
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5. What is the difference between replacement value and actual cash value?
The amount of money your insurer will pay to you following an insured loss is usually referred to as either Actual Cash Value (ACV) or Replacement Cost.
Actual Cash Value is the cost of replacing the property with something of like kind and quality - minus an allowance for depreciation.
Replacement cost means you may be able to receive a settlement of your claim without deduction for depreciation, but this requires you to have the property repaired or replaced with like kind and quality.
A deductible may apply in either case.
It's important to note that all home insurance policies automatically include "replacement cost" payments for building losses if repair or rebuilding occurs. The settlement can be up to, but not greater than, the amount of insurance stated in the policy.
Although you and your insurer may appraise your home thoroughly, there's still a possibility of underestimating the replacement cost of a building. Guaranteed replacement cost coverage will make up for such a shortage either completely or to an agreed amount.
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6. What exactly is "no-fault" insurance?
"No-fault" means that your insurance company will pay benefits to you, the driver, and to anyone else injured in your vehicle who doesn't have his or her own Ontario automobile policy, no matter who caused the accident. Their insurance company pays for injuries sustained by persons in the other vehicle.
WHAT IS NO-FAULT INSURANCE?
Ontario has a "no-fault" car insurance system, but this does not mean that no one is at fault in an accident. The term "no-fault" insurance simply means if you are injured or your car is damaged in an accident, then you deal with your own insurance company, regardless of who is at fault. You don't have to go after the at-fault driver for compensation.
Similarly, if any passengers in your car are injured, then each passenger who has a car insurance policy of their own will approach their own insurance company for benefits. If your passengers do not have a car insurance policy of their own, then your insurance company may pay benefits to them. The driver of the other car involved in the accident will claim benefits from his or her own insurance company.
Someone is always deemed to be "at fault" in a car accident, whether partly or fully. The law requires insurance companies to assign the percentage of fault for each of the drivers involved in the accident. This is done by using the "Fault Determination Rules".
These rules, which are set out in a regulation under the Insurance Act, help insurance companies deal with accident claims quickly and economically.
Keep in mind that the Fault Determination Rules differ from any charges laid by the police under the Highway Traffic Act. For example, if you were unable to stop your car on an icy road and rear-ended another car, the police officer may have told you that "no one was at fault".
This usually means that no police charges will be laid. It does not mean that the insurance companies involved will not consider who was at fault. In this case, the insurance company would apply the Fault Determination Rules, which state that a car that rear-ends another car is at fault, since drivers are required to take road conditions into consideration.
Keep in mind that your percentage of fault will determine the amount of deductible you have to pay. Generally, insurance companies will increase your premiums at your next renewal date if you have been deemed to be fully or partially at fault in an accident.
If you don't agree with the way in which your insurance company has determined fault, you should contact the person your insurance company has appointed to deal with consumer complaints. This is usually the company's Ombudsman Liaison Officer. If you are still not satisfied with your insurance company's position, you may choose to go to court.
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7. I've sold my vehicle and don't plan on getting a new one right away. Will I be penalized for lapsing my insurance coverage?
A person cannot be penalized for a lapse in insurance coverage unless:
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the driver's licence was suspended because of a conviction related to the use or operation of the automobile such as impaired driving; |
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an accident or conviction happened that would result in higher premiums and the individual did not notify the insurance company; |
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the insurance policy was cancelled for non-payment of an insurance premium. |
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8. How much liability should I purchase?
As much as the insurer is willing to sell you. Most companies will sell up to $2,000,000 on an auto policy. The difference in premium is usually only around $25.00 or less to go from $1,000,000 to $2,000,000. At, Believer Plus we strongly recommend that all of our clients purchase $2,000,000 liability.
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9. What basic coverage must I have legally?
You can choose how much insurance coverage you want to have. But, at the very least, you must have the following to operate a vehicle on Ontario roads:
Statutory Accident Benefits
This covers your medical expenses and provides you with income replacement benefits if you are injured in a car accident, no matter who is at fault in the accident. |
Third-Party Liability of at least $200,000
This protects you if you are sued because you or anyone else driving your car injures someone else or damages someone else's property. |
Direct Compensation-Property Damage
This protects you if someone else causes damage to your car and its contents. It is called direct compensation because you collect directly from your insurer. |
Uninsured Automobile Coverage
This covers you if you are injured or killed by an uninsured motorist or by a hit-and-run driver. It also protects you if an identified uninsured motorist causes damage to your car or its contents. |
While the above coverages are what you must buy at the very least, you can choose to buy extra coverage to get extra protection. (click here for information about optional coverages and for additional coverages you can purchase).
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10. I'm considering buying a new car and would like to keep my insurance costs down. Do certain models of cars cost less to insure than others?
The Canadian Loss Experience Automobile Rating system (known as CLEAR) is the system that most insurers now use in calculating automobile insurance rates. This system bases rates on each vehicle model's claims experience, including cost of repairs, frequency and severity of injury claims, and frequency of theft. But the kind of vehicle you drive is only one factor insurers take into account when calculating your premium. Others factors include your driving record, your location, and how far you drive on a regular basis.
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11. How can I save money on car insurance without sacrificing thorough coverage?
Of course, as a client of Believer Plus, our staff will help you find the best way to save money on your auto insurance. The following explanations are some key examples of how to reduce your premiums:
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Higher Deductibles: One of the best ways to save money on car insurance is to choose a higher deductible. The deductible is the portion of the claim that you agree to pay. In most cases, the higher the deductible the lower the premium. |
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Minimize Claims: Another way to save is not to make a lot of small claims. The more claims you put through, the more you will be seen as a risk to insure. |
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Discounts: Some insurance companies will offer discounts for placing more than one line of business with their organization. Others will give discounts if you have installed protection devices into your auto. There are also group discounts or rates available from some companies to members of an eligible organized group. |
How to get the best Value
To ensure you get the best value from your car insurance policy:
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Build a good driving history free of accidents and convictions. This means driving safely!
Don't pay for coverage you don't need. For example, if you have an old car, it may not be worth having collision and comprehensive coverage. |
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Consider higher deductibles. This means you'll contribute more toward the cost of your claim if you have an accident, but it will also mean a lower premium. |
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Make sure you always pay your premium on time. If you pay your premium by cheque or through automatic withdrawals from your bank account, make sure you always have enough money to cover your payment. If your insurance company is unable to withdraw your payment because you don't have enough money in the account, it could result in the cancellation of your car insurance policy. |
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12. Does my car insurance policy cover me anywhere in the world?
No. Your car policy covers you for incidents occurring in Canada, the US and on a vessel travelling between ports of those countries.
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13. What happens if I get a new car over the weekend, and my insurance company is closed until Monday morning? Can I drive it? Is it covered?
A newly acquired automobile is automatically covered for up to 14 days, but be careful because the new car is only covered for what your existing car/cars are presently covered for.
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14. How do traffic tickets affect my insurance rates?
Most insurance companies will excuse one minor conviction such as being charged for running a red light, but they may not overlook more than one in a three year period. A driver with a flawed record is considered a higher risk on the road and is charged accordingly.
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15. If I lend my car to a friend and they get in an accident, do my rates go up?
If you've given another person permission to use your vehicle, and they get into an accident that deems it necessary to make a claim, it will be your insurance rates that are affected.
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16. Optional coverages.
You may purchase other optional coverages including Coverage for Transportation Replacement, Family Protection Coverage and Removing Depreciation Deduction:
Coverage for Transportation Replacement
This coverage under the collision or comprehensive portion of your policy provides you with the use of a rental car while your car is being repaired. |
Family Protection Coverage
This coverage protects you to the same limit as your liability coverage if you are involved in a car accident with an underinsured driver, an uninsured driver or an unidentified driver, such as a hit-and-run driver. |
Removing Depreciation Deduction
This coverage removes the insurer's right to deduct depreciation from the value of your car when settling a claim for loss or damage caused by a peril for which you are insured. |
Please keep in mind that these are only three of many other optional coverages that you may want to buy. Ask your broker, agent or insurance company for more information on these and other coverages.
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17. Coverage you must have.
You can choose how much insurance coverage you want to have. But you must, at the very least, have the following:
Statutory Accident Benefits
This covers your medical expenses and provides you with income replacement benefits if you are injured in a car accident, regardless of who is at fault in the accident. |
Third-Party Liability of at least $200,000
This protects you if you are sued because you or anyone else driving your car injures someone else or damages someone else's property. |
Direct Compensation-Property Damage (DC-PD)
This protects you if someone else causes damage to your car and its contents. It is called direct compensation because you collect directly from your insurer. See the section called "Glossary" for a definition of DC-PD. |
Uninsured Automobile Coverage
This covers you if you are injured or killed by an uninsured motorist or by a hit-and-run driver. It also protects you if an identified uninsured motorist causes damage to your car or its contents. |
While the above coverages are what you must buy at the very least, you can choose to buy extra coverage to get extra protection. Ask your broker, agent or insurance company for more information.
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