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What is covered by auto insurance

What insurance is mandatory

The explanations of insurance coverages in each subsection are in general terms only. In all cases, actual coverages are as stated in the terms and conditions of the policy wording. Nothing stated in this website can be construed to extend, expand or modify the actual policy wording. If you have a specific question of significance to your situation contact your insurance Advisor.

Auto insurance in Ontario is compulsory. The "Ontario Automobile Policy" Owner's Policy (OAP 1) is a standard wording approved by the Financial Services Commission of Ontario. (previously known as The Ontario Insurance Commission). Optional coverage wordings are also approved by the same regulatory body.

The following coverages are mandatory:

Third party liability: This coverage protects the auto owner and driver if the insured auto injures someone or damages someone's property. The minimum coverage limit is $200,000.

Uninsured auto coverage: If the owner or driver of the auto that injures you is not insured or is not identified, this coverage pays you what you have a legal right to recover as damages from the owner or driver of the uninsured or unidentified auto. There is a maximum coverage limit of $200,000 that applies to death or bodily injury claims. The death and bodily injury limit can be increased and expanded to protect you by an approved endorsement. See the description of Family Protection Endorsement for more details.

If your auto is damaged and you have a legal right to recover from an IDENTIFIED owner or driver of an uninsured auto, this coverage pays a maximum of $25,000 toward repairing damage to your automobile and its contents (subject to a $300 deductible).

Accident Benefits: This is such an important coverage we have a whole section on it. See "Accident Benefits - Mandatory and Optional"

Direct compensation for property damage: Let's assume what normally happens: First, you are involved in an accident in Ontario. Second, the other automobile is insured by a company licensed to issue automobile policies in Ontario. Third, the other driver is 100% at fault. If this is all true, this particular coverage allows you to claim for the damage to your auto, its contents and loss of use from your own insurance company. In other words, your own insurance company pays to repair your auto even if you are not at fault for the accident.

If you are partially at fault in an accident and you have the optional collision coverage, then this coverage and your collision coverage work together to enable you to recover most, but not all of the cost to repair your auto. You do not recover all of the costs because your collision deductible will apply to the extent that you are at fault. For example: if you are 50% at fault, then 50% of your collision deductible will be applied.

You can buy a deductible under this section and in doing so, you can reduce your premium. However, keep in mind that a deductible in this section means you will pay a portion of the cost to repair your own auto even if the other driver is 100% at fault and you are 0% at fault.

See also the "No-fault" section for more details about fault allocation and the impact of fault on your claims record.

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