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Why is Auto Insurance Required and
what is covered?
There are a variety of reasons why
people need car insurance. Of course it is legislated by
the Ontario Government and there is a $5,000 fine for
driving with no insurance. However the principle reason
people buy car insurance is protection for your
automobile and you self from lawsuits due to accidents.
Driving without insurance could ruin you financially.
No Fault Insurance:
Ontario does not operate
a true No Fault System. The only true No Fault Benefits
that you have are your Accident Benefits. Included in
those benefits are Replacement of lost wages,
rehabilitation costs and death benefits. Insurance
companies still determine fault in all situations based
on police reports and fault charts. Only at fault claims
can affect your rates and companies will consider at
fault losses in the past six years when determining your
rates. Your deductible is only applicable for at fault
losses or hit and run accidents when you cannot identify
the third party. Comprehensive claims, i.e. broken glass
or vandalism does not affect your rates, but companies
are concerned about frequency of claims and may increase
deductibles
Auto Insurance Coverage’s
Mandatory car insurance
requirements include:
Third Party Liability, it pays
for losses you are held legally responsible for while
driving. Example: you injure another party or damage
someone else’s property. This coverage pays for your
legal defence is as well as any damage awards (up to the
limit of the policy)
Statutory Accident Benefits:
It pays for medical expenses, income replacement (up to
a certain limit) and funeral expenses if you are killed
in a car accident. These benefits are available
regardless of who was at fault for the accident.
Optional Coverage’s
Collision, most people carry a
$500 deductible. If an accident is your fault, you pay
the $500 deductible and the insurance company pays the
rest.
As your car gets older and
depreciates some people will elect to delete collision,
you then become responsible for any damages to your car
if you are at fault in an accident.
Comprehensive, most people
carry a $300 deductible. Comprehensive covers claims for
glass, vandalism, fire and theft. As cars get older some
people will also chose to delete this coverage. Another
way of decreasing premium is to amend the coverage
slightly to Specified Perils; it will only cover fire
and theft.
Other: You may also purchase a
number of other specific coverage’s, which are available
based on your circumstances. Your Utter Morris broker
will review these with you and make recommendations.
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