Auto Insurance

Why is Auto Insurance Required and what is covered?

There are a variety of reasons why people need car insurance. It is legislated by the Ontario Government and there is a $5,000 fine for driving with no insurance. However the principle reason you should purchase car insurance is to re-imburse you for loss or damage to your automobile and protect yourself 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 apply are provided under the Accident Benefits section of the policy. Included in those benefits are Replacement of lost wages, medical and 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: pays for damage to your vehicle caused by collision with an object. If the accident is your fault, you will have to pay your deductible. If someone else is responsible, in most cases you will not have to pay your deductible.

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: covers claims for losses other than collision such as broken glass, vandalism, fire and theft.

All Perils: This is a combination of collision and comprehensive all under one coverage.

Specified Perils; a very limited form covering fire & theft only.

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.