Guide to Third Party Liability Insurance in Canada

Accidents, crashes, collisions; whatever you prefer to call them, they are unavoidable, especially on the road. Even though Ontario is consistently listed among the top five jurisdictions with the safest roadways in North America, you never know when an accident may take place.

Thankfully, if you get into a car accident or collision that results in physical damage or injury, you can rely on your third party liability insurance.

If you're not familiar with this type of car insurance, or simply need a brief refresher, you've come to the right place. In this article, we'll go over the nuances of this type of coverage and discuss all of the third party liability insurance Ontario regulations that drivers should know.

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What is third party insurance for car drivers in Ontario?

Third party liability car insurance (occasionally written in numeric form as 3rd party liability insurance) is a type of coverage that protects drivers involved in an accident that damages property, results in physical harm or leads to the death of another motorist or pedestrian.

Here's a brief example:

You're driving down a country road at night and accidentally collide with a nearby cyclist. The cyclist is seriously injured by the collision and requires medical attention. Instead of paying for the medical work out of pocket, your third party liability car insurance will cover a portion or all of the collision-related expenses (depending on your level of coverage).

Who does third party liability car insurance cover in Ontario?

Drivers need to know that their third party liability car insurance only covers the other motorists or individuals involved in an accident, not the policyholder. In turn, you will not receive any financial support for your own expenses, just the other parties' expenses that you're liable for.

Feeling confused? Let's go back to the previous example:

After the collision with the cyclist takes place, you realize that you've suffered minor whiplash and need to visit a physical therapist. Your third party liability coverage will not cover any of the physical therapy expenses you incur.

Is third party liability car insurance mandatory in Ontario?

Yes, drivers in Ontario are legally required to have a minimum of $200,000 of third party liability car insurance coverage. Getting caught driving without third party liability car insurance can lead to serious consequences, such as fines and increased car insurance rates.

You may be asking yourself, "why is third party liability car insurance necessary in Ontario?", and the answer is relatively simple — requiring all drivers to obtain third party coverage ensures that Ontarians are able to cover expenses that they are responsible for, but might not be able to afford otherwise.

How much third party liability insurance should drivers have in Ontario?

Even though $200,000 may seem like a lot of coverage, it doesn't go as far as you'd initially expect. If you get into a severe accident, $200,000 worth of coverage will likely only cover a portion of your expenses. 

That's why most drivers choose to increase their third party liability insurance premium to $1,000,000 to $2,000,000. Although increasing the minimum coverage may cost you a bit more upfront, doing this will ensure that you're completely covered in the event of an accident in Ontario.

How much does third party liability car insurance cost in Ontario?

Unfortunately, there's no set-in-stone answer to this question — the price of your third party liability car insurance is based on several unique factors that vary from driver to driver. Some of these factors include the following:

• Additional forms of insurance selected
• Make and model of vehicle
• Age of vehicle
• Driving history and record
• Location
• Add-ons
• Discounts (bundling your home and auto insurance, student discounts, etc.)

We can say that most drivers in Ontario pay anywhere from $600 to $1,600 for third party liability car insurance each month. Although this is a wide window, it gives you a general idea of what the average driver pays for insurance in Ontario.

Are you paying too much for third party liability insurance in Ontario?

Do you feel like you're overpaying for third party insurance Ontario? Have you been thinking about re-shopping your car insurance policy?

If you answered "yes", then it's a great time to reach out to one of our experienced insurance advisors. At Surex, our advisors have one goal: help you find competitive quotes that work with your budget. After a quick chat, our advisors can provide you with upwards of ten cheap, personalized car insurance quotes that are bound to impress.

Call or click today to learn how you can save up to 35% by bundling your car and home insurance with Surex.

Are there other car insurance options for drivers in Ontario?

Of course! Car insurance isn't a one-size-fits-all solution — everyone has their own sets of preferences and opinions, which means that carriers need to offer different types of coverage.

If you'd like more protection and peace of mind, you can ask your insurance provider about a type of car insurance known as full coverage. Full coverage is a term that is used to describe a car insurance policy that features liability coverage, collision coverage and comprehensive coverage.

Collision coverage — a type of car insurance that covers damage related to collisions involving vehicles, in-ground features and other miscellaneous objects. Collision coverage protects the driver regardless of fault.

Comprehensive coverage — a type of car insurance that covers damage caused by risks and perils (an insurance term for unforeseeable events) such as falling objects, hail, theft and vandalism.

The only downside to full coverage is that it's more expensive than getting third party liability coverage individually (this is due to the fact that full coverage offers more protection).

If you'd like to learn more about the differences between third party liability car insurance and full coverage, feel free to click this link.

Third party liability car insurance is more important than you think

If you're a new driver, you may not have realized how crucial third party liability car insurance is until reading this article.

Do you still have questions about third party liability car insurance in Ontario? If so, don't hesitate to reach out to a Surex insurance advisor today.