Cars driving on highway

Mandatory VS optional car insurance coverage in Ontario

While some forms of insurance, such as health or life insurance, are optional in Ontario, when it comes to car insurance you have no option but to get yourself an adequate policy. While there are lots of option on the market, there are some insurance that is mandatory. If you’re caught driving without the right type of insurance, even if you didn’t know you needed a particular option, you can be faced with severe consequences. So to make sure you aren’t caught short, we broke down the difference between mandatory and optional insurance coverage in Ontario.

Mandatory insurance

Third Party Liability

Third party liability insurance covers injury to other people and property in the event of an accident, against an at fault driver. Every driver must have coverage for a minimum of $200,000 in third-party liability insurance, however most drivers choose to extend this and opt for closer to $1 million.

Accident Benefits Coverage

Accident benefit coverage is there to protect both the driver and any others who are in the vehicle at the time of an accident. They are provided by the driver’s own insurance, regardless of who was at fault in the incident. Not only does it include medical needs, it also steps in to help cover income replacement, rehabilitation, non-earner benefits and caregiver costs if you are injured in a motor vehicle accident.

Mandatory coverage includes:

  • $65,000 for non-catastrophic injuries, including sprains, broken bones and whiplash.

  • $1,000,000 for catastrophic injuries

  • A maximum of $250 a week a dependent who may have to care for you after a car accident. For any additional support there is an extra $50 per week, per person.

  • In the event of a catastrophic injury additional help may be needed to support you with housekeeping and home maintenance. Your coverage will include up to $100 a week.

  • Death and funeral benefits, which include a payment of $25,000 to your spouse, $10,000 to each of your dependants and a payout of $6,000 for funeral expenses.

Uninsured Driver Coverage

If you are injured or killed by an uninsured driver, this covered will protect you, or a member of your family. It also applies even if the driver is unidentified, for example, in a hit-and-run incident.  

Direct Compensation-Property Damage Coverage

This coverage pays out for any damage to your vehicle and any valuables inside, regardless of where the accident occurs or who is at fault.

Optional insurance

For any of the mandatory options there is always the option to extend your coverage. While this will give you more protection in the likelihood of an accident, it will also be reflected in how much you’re pulling out for your premium.

For everything else, there are two main categories of coverage: collision and comprehensive. The difference between them comes down to how a car is damaged in the event of an accident. If damage happens while the car is being driven, this will fall under collision coverage, however damage or loss caused while the car is parked is classed as comprehensive. Usually there are options to add fire, theft, vandalism and extreme weather coverages to your comprehensive policy.

Some insurers also offer the option of purchasing transportation replacement coverage and depreciation coverage. Transportation replacement coverage will simply reimburse the money you spend on a car rental, or provide you with a rental car, while your car is being fixed or replaced after an incident. Some insurers may also offer you support for public transport or taxis.

Depreciation coverage will pay enough to help you replace your vehicle in the event your car is stolen, or is unsalvageable.

 

Insuring your car can end up being expensive, but it is necessary. Luckily, there are some ways you can save on insurance, including installing safety features. If you still have any confusion or questions, or want to figure out the best way to save money while remaining fully covered, get in touch with your insurance broker who will be able to give you some tips and advice.