What to Know When Evaluating Optional Auto Insurance Coverage

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Every driver is required to have basic auto insurance coverage to legally drive in Ontario. This includes Third Party Liability, Accident Benefits coverage, Uninsured Automobile coverage, and Direct Compensation-Property Damage coverage. But there are many expanded coverage options available to drivers you’ll likely want to consider in order to increase your protection and benefits.

Liability coverage has three expansion options.  

You must have $200,000 in liability coverage for property damage, injury, or death due to an accident you are responsible for. However, that coverage may be increased to $500,000, $1 Million, or $2 Million. Typically, most drivers have $1 Million. You can see more information about how car insurance rates are calculated here.

What is covered under accident benefits and what can you expand on.

There are five required areas of accident benefits: income replacement benefits, medical rehabilitation and attendant care benefits, caregiver benefits, housekeeping and home maintenance expenses, and death and funeral benefits.

Drivers are required to have weekly income replacement benefits of 70% of your gross income up to $400 per week. These may be increased to $600, $800, or $1,000. Under medical rehabilitation and attendant care benefits, non-catastrophic injuries, such as sprains, broken bones or whiplash, require $65,000 in coverage and catastrophic injuries, including loss of limbs and paralysis, require an additional $1 Million. However, both coverage limits can be increased to $2 Million.

Basic caregiver benefits cover only catastrophic injuries that prevent you from providing care to your dependants as a result of the accident. However, these benefits may be extended to include all injuries. The same goes for housekeeping and home maintenance expenses. In both cases, the amount of coverage provided does not change.

Finally, all drivers are required death and funeral benefits. The minimums pay out $25,000 to your spouse, $10,000 to each dependant, and up to $6,000 for funeral expenses. Benefits may be increased to $50,000 for your spouse, $20,000 for dependants, and $8,000 for funeral expenses.

Not required under accident benefits are dependant care benefits, which covers care for your dependants if you’re employed and injured in an auto accident, and indexation, which provides an annual adjustment of your benefits accounting for inflation. Both can be added on top of your mandatory policies.

Options for if you lose or damage your vehicle.

Everyone is legally required direct compensation property damage coverage (DCPD). This covers damage to your vehicle and its contents when you are not responsible for the accident. There are no additional options in terms of DCPD. However, you are able to expand your coverage to include collision or upset coverage, specified perils coverage, comprehensive coverage, or all risk coverage.

  • Collision or upset coverage. This is coverage for losses resulting from damages obtained when your vehicle is involved in a collision with another object, such as another vehicle, a trailer, the surface of the ground, or any object in or on the ground.
  • Specified perils coverage. This covers losses caused by a specific event such as fire, theft, natural disaster, explosion, or civil disturbance.
  • Comprehensive Coverage. This will cover the cost of repairing or replacing your vehicle from damage not caused by collision. Examples include fire, theft, or natural disasters.
  • All risk coverage. This optional form of coverage combines collision or upset coverage with comprehensive coverage. It also covers loss or damage caused by theft by someone who lives in your home or by an employee with access to your vehicle.

Using insurance comparison site Kanetix can make sure your covered when it matters most.

Coverage against uninsured drivers and hit and runs.

To protect you and your family against injury from a hit-and-run, or drivers illegally operating without insurance, you are required to have uninsured automobile coverage. This offers up to $200,000 in compensation. To expand on it, Ontario drivers would require Family Protection Coverage, which would provide up to $1 Million in coverage.

Considering additional auto insurance coverage became especially important for Ontarians in 2016 when legislation was introduced that reduced required minimum insurance coverage. When shopping for insurance, be sure you clearly understand what’s covered so you aren’t left surprised if you ever need to file a claim. There are many options from insurer to insurer in terms of optional insurance coverage and you will want to carefully compare your policy options.