Auto Insurance

Ontario law requires that all motorists have auto insurance.

Fines for vehicle owners, lessees, and drivers who do not carry valid auto insurance can range from $5,000 to $50,000.

If you are found driving without valid auto insurance, you can have your driver’s license suspended and your vehicle impounded.

If you are convicted of driving without valid auto insurance, your insurance company may consider you a “high-risk” driver and charge you higher premiums or refuse to sell you insurance altogether. If you are injured in an accident while driving or occupying an uninsured vehicle:
• you may not be entitled to receive income replacement and/or non-earner benefits; and
• you may not be allowed to sue the at-fault driver for compensation as a result of injuries received in the accident.
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.

What’s in a Standard Auto Insurance Policy?

If you own a vehicle in Ontario, you are required to have insurance coverage:
Third-Party Liability Coverage:

This section of your automobile insurance policy protects you if someone else is killed or injured, or their property is damaged. It will pay for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. By law you must carry a minimum of $200,000 in Third-Party Liability coverage but options exist to increase the minimum amount.
Statutory Accident Benefits Coverage:

This section of your automobile insurance policy provides you with benefits if you are injured in an automobile accident, regardless of who caused the accident, including supplementary medical, rehabilitation and attendant care, caregiver, non-earner and income replacement benefits. Options exist to increase most of these coverage.
Direct Compensation – Property Damage (DC-PD) Coverage:
This section of your automobile insurance policy covers damage to your vehicle or its contents, and for loss of use of your vehicle or its contents, if another person was at fault for the accident. It is called direct compensation because even though someone else causes the damage, you collect directly from your own insurer.

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.
In addition to the mandatory minimum coverages that are required by law, you may purchase higher liability limits under your Third-Party Liability Coverage, as well as increased Accident Benefits Coverages. You have choices and flexibility over optional or increased coverages and the price you pay for auto insurance. These options allow you to customize your policy to better suit your needs.
Increased Third Party Liability Coverage:

While you are legally required to carry a minimum of $200,000, you may want to increase this coverage. The cost to increase your Third-Party Liability coverage to $500,000, $1 million or $2 million is small in most cases.
Optional Accident Benefits Coverages:
You may also want to consider increasing your Statutory Accident Benefits coverage by buying any or all of the optional benefits listed below.
• Income Replacement Benefits: If you cannot work as the result of an automobile accident, you may be eligible for basic weekly income replacement benefits of 70 per cent of your gross income up to $400. If this is not enough to cover your current after tax income level, you may want to consider buying optional income replacement benefits to increase your maximum weekly benefit to $600, $800 or $1,000. When considering the amount of coverage you will need, keep in mind you are required to first claim wage loss benefits from a disability plan you have purchased or workplace benefits that you have access to.
• Medical, Rehabilitation and Attendant Care Benefits:
For policies issued or renewed on or after June 1, 2016, the standard maximum amount for medical, rehabilitation and attendant care expenses, such as physiotherapy, chiropractic treatment or an aide to assist you if you have been seriously injured is $65,000. If you are catastrophically injured, the standard maximum is $1,000,000. You can buy optional benefits which will cover up to $130,000 in medical, rehabilitation and attendant care expenses for non-catastrophic injuries, or an additional $1,000,000 for catastrophic injuries, bringing the total for catastrophic injuries to $2,000,000. There is also an optional benefit for medical, rehabilitation and attendant care expenses for all injuries that will increase the combined non-catastrophic benefit to $1,000,000 and the combined catastrophic benefit total to $2,000,000. If you purchase both the optional medical, rehabilitation and attendant care benefit for catastrophic injuries and the optional benefit for all injuries, the total benefit amount for a catastrophic injury will be $3,000,000.

Keep in mind that many health care expenses are not covered by OHIP, or only partially covered, including physiotherapy and chiropractic treatment, mobility devices (crutches, wheelchairs), modifications to your home and car that you may require, and other specialized goods and services. Minor injuries may only require a few thousand dollars in treatment. The most serious injuries (brain injuries, amputations) are permanent and may require hundreds of thousands of dollars in specialized goods and services on an ongoing basis. You may need the services of an attendant 24 hours a day. Review any extended health care plan you have access to, such as through work, to help you decide how much coverage you require.
• Caregiver Benefits: If you are not employed, are providing care full-time to dependants like children or aging parents, and can no longer provide that care as the result of an automobile accident, you may be eligible for caregiver benefits if you need to hire someone to care for your dependants. The maximum amount for caregiver benefits is $250 per week for the first dependant, plus $50 per week for each additional dependant. The standard coverage can only be claimed by those who are catastrophically injured in an auto accident. You can extend coverage so that it can be claimed for all injuries by purchasing an optional benefit. If you have children you need to consider who will look after them if you are injured in an auto accident.
• Housekeeping and Home Maintenance Expenses: If you are unable to perform your usual housekeeping or home maintenance duties, you may be eligible for these benefits if you need to hire someone to perform the duties. The maximum benefit payment is $100 per week. The standard coverage can only be claimed by those who are catastrophically injured in an auto accident. You can extend coverage so that it can be claimed for all injuries by purchasing the optional benefit. If you normally do the cleaning and maintenance of your home, you need to consider who will look after these things if you are injured in an auto accident.
• Death and Funeral Benefits: In the event that you die as a result of an auto accident, the standard amount which will be paid is $25,000 to your eligible spouse, $10,000 to each dependant, and a maximum of $6,000 for funeral expenses. If you buy optional benefits, you can increase these amounts to $50,000 to your eligible spouse, $20,000 to each dependant, and $8,000 for funeral expenses.
Other Optional Coverage

Options exist to purchase any of the other additional coverages and benefits listed below.

• Dependant Care Benefits: This optional benefit is not provided in a standard auto insurance policy. Optional dependant care benefits cover up to $75 per week for the first dependant and $25 for each additional dependant but can only be claimed if you were employed at the time of the accident, are not receiving a caregiver benefit, and have to pay for additional childcare expenses as a result of the accident.
• Indexation: This optional benefit is not provided in a standard auto insurance policy. If purchased it provides for an annual adjustment for inflation for Income Replacement, Medical, Rehabilitation and Attendant Care and other benefits, determined according to the Consumer Price Index of Canada.

If you have benefits from your employer or another policy, you may already have some level of coverage for some or all of the optional benefits listed above. You should consider these benefits as you review
Summary of optional accident benefits coverage available for policies issued
on or after June 1, 2016

Coverage Options available to increase your benefits
Medical, Rehabilitation and Attendant Care benefits ‐ for non‐catastrophic injuries Increase the benefit for medical, rehabilitation and attendant care including assessment costs for non-catastrophic injuries to $130,000.
Medical, Rehabilitation and Attendant Care benefits ‐ for catastrophic injuries Add an additional $1,000,000 for medical, rehabilitation and attendant care benefits including assessment costs for catastrophic injuries, for a total of $2,000,000.

Medical, Rehabilitation and Attendant Care benefits – for all injuries
Increase the benefit for medical, rehabilitation and attendant care including assessment costs for non-catastrophic injuries to $1,000,000 and the benefit for medical, rehabilitation and attendant care including assessment costs for catastrophic injuries, to $2,000,000.
You may purchase both the increased coverage for catastrophic injuries, and this increased coverage for all injuries. If so, you will increase the benefit for non-catastrophic injuries including assessment costs to $1,000,000 and the benefit for catastrophic injuries including assessment costs to $3,000,000.

Caregiver benefit - Make the amounts available in your standard policy for catastrophic injuries (up to $250 per week for the first dependant plus $50 for each additional dependant), available for all injuries.

Housekeeping and Home Maintenance expenses - Make the amounts available in your standard policy for catastrophic injuries (up to $100 per week), available for all injuries.
Income Replacement benefit -
Increase the weekly limit to $600, $800 or $1,000.

Death and Funeral benefits:
Increase the amounts provided in your standard policy to a $50,000 lump sum to an eligible spouse; $20,000 lump sum to each dependant; maximum $8,000 for funeral benefits.
Indexation benefit – applicable to income replacement benefit, non‐earner benefit, caregiver benefit, and medical, rehabilitation and attendant care benefit Annual adjustment for inflation according to the Consumer Price Index for Canada.

Extra Coverage for Loss or Damage to Your Vehicle

In addition to the standard policy coverages you may also buy extra coverage for loss or damage to your vehicle including:
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.

Note: A deductible may apply to all of the above coverages.
Optional Policy Endorsements:

Additional optional enhancements, also known as policy endorsements or Ontario Policy Change
Forms (OPCF), are special agreements that allow you to change, add or reduce the amount of coverage for certain situations.

The six most common policy endorsements are:
Rented or Leased Vehicles (OPCF 5):

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.

Note: A deductible may apply to all of the above coverages.

Optional Policy Endorsements

Additional optional enhancements, also known as policy endorsements or Ontario Policy Change
Forms (OPCF), are special agreements that allow you to change, add or reduce the amount of coverage for certain situations.

The six most common policy endorsements are:
Rented or Leased Vehicles (OPCF 5):
This endorsement extends coverage to a vehicle that you drive, but that is owned by a leasing company.
Transportation Replacement (OPCF 20):
This coverage, also referred to as “Loss of use”, covers the cost of a rental vehicle while your vehicle is being replaced or repaired, if the damage or loss is caused by a peril for which you are insured.
Liability for Damage to Non-Owned Automobile(s) and Other Coverages (OPCF 27):
This endorsement provides physical damage coverage to vehicles that you may operate but do not personally own – such as a vehicle that you have rented or borrowed – subject to a deductible. It also provides Liability, Accident Benefits, Uninsured Automobile and Direct Compensation-Property Damage coverages in specific circumstances.
Removing Depreciation Deduction (OPCF 43):
This coverage removes the insurer’s right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage caused by a peril for which you are insured.
Family Protection Coverage (OPCF 44R):
This coverage protects you, or an eligible member of your family, to the same limits as your Third-Party Liability coverage if you are involved in an automobile accident where you are not at fault, with someone who carries less insurance, no insurance, or is an unidentified driver (e.g., hit and run).
Added Coverage to Offset Tort Deductibles (OPCF 48):
This endorsement reduces the deductible associated with court awarded compensation for pain and suffering by $10,000 for non-Family Law Act claims and by $5,000.00 for Family Law Act claims.

Please keep in mind that these are only some of the many policy endorsements available for purchase. Ask your broker, agent or insurance company which policy endorsements would benefit you.