Each province within Canada has its own car insurance laws and requirements. In Ontario, Canada auto insurance is regulated by the Financial Services Commission of Ontario (FSCO), an agency of the Ministry of Finance. Ontario law requires that all motorists have automobile insurance.
If you own a vehicle in Ontario, you are required to, at the very least, purchase the following automobile insurance coverages:
Third Party Liability Coverage – This type of coverage 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 of Third-Party Liability Coverage.
Statutory Accidents Benefits Coverage – This provides you with benefits if you are injured in an automobile accident, regardless of who caused the accident including supplementary medical, rehabilitation, attendant care, caregiver and income replacement benefits.
Direct Compensation – Property Damage (DC-PD) Coverage – This section of an Ontario auto insurance policy covers damage to your vehicle or its contents, and for loss of use of your vehicle or its contents, to the extent that 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, instead of the person who caused the damage.
It is important to note that coverage under the DC-PD section of an auto insurance policy only applies if the following conditions are met:
- the accident took place in Ontario;
- there was at least one other vehicle involved in the accident; and
- at least one of the other vehicles is also insured by an insurance company that is licensed in Ontario or has signed a special agreement with FSCO to provide this coverage.
If these conditions are not met, then you would need to make a claim under your Collision coverage (if you have it this optional), whether or not you are at fault. If you did not have collision coverage on your vehicle, you may be able to pursue recovery from the at-fault driver to the extent you were not-at-fault for the accident.
Uninsured Automobile Coverage – This required coverage is for 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 may also want to buy extra coverage for loss or damage to your vehicle. Optional coverages include: specified perils coverage, comprehensive, collision or upset and all perils coverage.
To find out more information about Ontario's auto insurance requirements and the way their system works you can go to the FSCO site or contact them. For information on all of Canada and the various types of auto insurance required by each province you can go to the Insurance Bureau of Canada (IBC) site and read our article on the Basics of Canadian Car Insurance.
The last information that we found regarding the average cost of auto insurance in Ontario is from 2004 and stated that the average premium had declined from $1,499 to $1,319. FSCO noted on its site that Ontario private passenger auto insurance approved rates decreased during the first quarter of 2006 (January 1, 2006 to March 31, 2006). This government agency should be able to provide you with an accurate average of what it costs to insure a car in this Canadian province.
You may want to take advantage of FSCO's Educational Auto Rate Tutorial which provides possible rates based on predetermined generic profiles.
FSCO also notes that while basic automobile insurance policies are standardized to some extent, it's still important to compare policies in terms of coverage as the particular amounts and range of coverage (for example: deductibles, limits and optional coverages) may differ from company to company.
To get a quote for Ontario car insurance, follow this link.