Types of Car Insurance in Canada

Published: September 28, 2015

Updated: May 15, 2018



When looking for car insurance in Canada you should be able to find at least a basic policy that offers a broad range of protection and coverage in a range of circumstances. These basic packages usually consist of six basic benefits and some coverage is required by law in the Province of Ontario.

Like the entire country, Ontario requires a driver to have auto insurance by law, and penalties for driving without coverage can be severe, with fines ranging from $5,000 to as much as $50,000. Another consequence of driving without insurance is having a driving license suspended or revoked and having the vehicle impounded.

On top of this, insurance companies may later see you as a high risk driver, which means premiums for future coverage may be significantly higher.

So, car insurance is essential in Ontario and in fact the Province insists on a number of variables within a basic package. The following coverage stipulations are the minimum requirements for a basic auto insurance policy:

Third party liability coverage

This is a standard coverage that is found across all policies and is a guaranteed benefit worldwide. This policy protects you if you damage someone else’s property or someone else is killed or injured, this coverage will pay lawsuit claim fees against you up to the value of the stated agreement between you and the insurance provider. The law states this should be a minimum of $200,000.

Statutory accident benefits coverage

This coverage protects you in the event of injury during a car accident, no matter who is at fault. This includes supplementary medical care as well as rehabilitation, attendant care, caregiver, non-earner and income replacement benefits.

?Direct compensation – property damage coverage

This part of your auto insurance may also be known simply as DC-PD in your policy details and it covers against damage to your vehicle or its contents. It also protects against losing the use of your vehicle and its contents, which usually means a replacement vehicle is provided. However, this area of your policy is dependent on any accident not being your fault. Direct compensation means your insurer will issue the payment instead of waiting for the insurer of the driver who caused the damage.

This policy is only in effect if the accident took place inside the Province of Ontario, there was at least one other automobile involved, and that another vehicle involved in the accident is also insured in Ontario. In the event one or all of these stipulations is not present, you will need to apply for optional collision coverage, which is an added policy that can be purchased from your insurer.

Uninsured automobile coverage

This section of your Ontario law required insurance coverage protects you in the event of your injury or death from an uninsured driver or a hit and run driver.

As mentioned, these are the sections of personal automobile insurance coverage that are required under Ontarian law. There are myriad other policy points that can be added to coverage, and each addition will cost more; those extra benefits will be covered in later guides.