How Does Car Insurance Work in Ontario?

Buying a car in Ontario may seem relatively straightforward at first, but you’ll quickly realize that there are several tasks that you need to complete before you can hit the road for the first time.

One of the tasks you need to do is buy car insurance. Each Canadian province and territory has its own set of province-specific car insurance rules. So, whether you’re new to Ontario or buying your first car, you should take a moment to review the process and learn how it works.

This brings us to today’s question, “how does car insurance work in Ontario?”.

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Continue reading to learn the basics of car insurance in Ontario and to get some tips for finding competitive quotes for your next policy.

How does car insurance work in Ontario? — An in-depth guide

At its core, car insurance is a contract between policyholders (i.e. car owners) and auto insurance companies. Policyholders make monthly or yearly payments; in return, car insurance companies financially protect them in the event of an unforeseen accident, collision, etc. 

However, it’s important to note that the level of coverage that you get depends on the type/s of car insurance that you have.

A standard car insurance policy in Ontario features the following types of coverage:

• Third-party liability coverage
• Direct compensation - property damage coverage (DC-PD)
• Statutory accident benefits coverage
• Uninsured automobile coverage

How does third-party liability insurance work in Ontario for policyholders?

Third-party liability insurance is a type of mandatory coverage that protects drivers if they cause an accident that results in an injury, death or third-party property damage. This type of insurance will cover claims that result from accident-related lawsuits. 

In Ontario, drivers are required to have a minimum of $200,000 in third-party liability coverage, but most insurance brokers suggest having upwards of $1 million in liability coverage. As the award amounts are steadily increasing, at Surex we recommend $2 million or higher.

How does DC-PD coverage work in Ontario for policyholders?

DC-PD coverage financially protects your automobile or its contents (limits pending), along with loss of use for said automobile or its contents (limits pending) if another party was deemed “at fault” for the event. Ontario insurance allots for $25,000 payable for contents, subject to a $300 deductible.

To use the DC-PD section of your policy, you need to meet the following conditions:

• The event needs to take place in Ontario
• There were a minimum of two vehicles involved in the event
• One of the involved parties has valid auto insurance from a licenced insurance company in Ontario (the policy covering the
  other automobile must be issued by an insurance company licensed in Ontario, or one that has filed with the Financial Services Commission of Ontario to provide this coverage)

How does statutory accident benefits coverage work in Ontario for policyholders?

Statutory accident benefits coverage offers benefits to policyholders who are injured in an accident. Policyholders can use this coverage regardless of who was deemed at fault for the accident. Statutory accident benefits coverage can cover the following:

• Physical rehabilitation expenses
• Attendant care expenses
• Supplementary medical expenses
• Caregiver expenses
• Non-earner benefits
• Income replacement

Even if you are a pedestrian or cyclist and injured by a vehicle, these coverages will extend to your medical care.

How does uninsured automobile coverage work in Ontario for policyholders?

Uninsured automobile coverage protects policyholders who are involved in an accident with an uninsured motorist. 

How does no fault car insurance work in Ontario for policyholders?

No fault car insurance coverage is a system in Ontario that ensures that each policyholder will work with their own car insurance company (regardless of who is at fault). When you buy car insurance in Ontario, no fault car insurance is automatically added to your policy.

What are the optional forms of car insurance in Ontario?

Now that you know about the different types of insurance in Ontario and which one is mandatory, let’s go over some of the optional forms of car insurance for policyholders:

• Comprehensive car insurance
• Collision coverage
• All perils coverage
• Specified perils coverage

Speak with your Surex insurance advisor to learn more about these optional forms of coverage.

Bonus — Click here to learn the answer to the question, “how does car insurance work for immigrants in Canada?".

How does car insurance work in Ontario if you aren’t a fully licenced driver?

The answer to this question depends on the type of driver’s licence that you have. Ontario has what’s known as a graduated licencing system, which means that drivers are required to earn three different driver’s licences over the course of four years:

• G1 licence
• G2 licence
• G-class licence

If you currently have your G1 licence, you will most likely not be able to find an auto insurance company that will offer coverage. Due to your lack of on-road experience, you pose too much of a risk to yourself and other drivers. Additionally, if you have your G1, you can’t legally operate a vehicle without the supervision of an experienced, insured driver, so you don’t need to worry about getting coverage (yet). However, a few Ontario insurer's will sell a policy to a vehicle owner who has a G1 license, trusting that they will follow all provincial rules for their license and always have a G driver with them.  Intact, Aviva, Travelers and Wawanesa are in this list.

If you have your G2 licence, then you can get car insurance quotes from most auto insurance companies in Ontario. However, it will most likely be more expensive than if you wait until you have your G-class licence. 

How can you compare auto insurance quotes in Ontario?

There are two ways that policyholders can compare auto insurance quotes in Ontario: by reaching out to auto insurance companies directly or by teaming up with the best insurance broker in their area.

Reaching out to auto insurance providers directly can be effective, but it’s rarely efficient. You need to spend a considerable amount of time chatting with individual brokers before finding the right quote.

On the other hand, if you team up with a reputable insurance brokerage like Surex, you can get high-quality auto insurance quotes from the top-rated car insurance companies in Ontario in a matter of minutes.

Save up to 25% on car insurance when you team up with Surex

At Surex, we know that drivers are constantly looking for ways to save on coverage. That’s why we work hard to provide policyholders with the best auto insurance quotes in Ontario. 

We do this by teaming up with the best insurance companies in Ontario, like Intact. Teaming up with top-rated companies allows us to offer our customers some of the most competitive quotes in the Canadian insurance industry.

Contact your Surex insurance advisor today to get started and to receive your quotes in ten minutes or less!