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What is covered by auto insurance

What other coverages are Available

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.


We urge you to discuss your situation with your insurance advisor to ensure you are completely satisfied with the protection that your policy provides.


Third Party Liability: Under certain conditions, the Auto Insurance Act still allows injured persons to sue a car owner and the driver who cause an accident. The lowest legal limit in Ontario is $200,000. Higher limits are available.

Family Protection Endorsement: This endorsement is commonly known as Ontario Policy Change Form 44 or simply OPCF 44 ". The coverage limit is usually the same limit as the Third Party Liability limit.

This endorsement provides for the difference in the limit of insurance carried by the "at fault" motorist and the limit stated in your Family Protection Endorsement.

It is easier to understand this important endorsement with an example. Let us assume:

In this case, your insurer would pay the balance of $300,000, (the difference between the judgement and coverage limit that was available to the at fault driver/owner). If there is more than one person injured in the same accident, the $1,000,000 limit is an "overall" limit.

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

Collision: This is the coverage that enables you to have your insurer repair your car when you or your driver cause an accident which damages your car. It also enables you to have your parked car repaired if it is damaged by an unidentified car. The deductible is the amount that you must pay. The normal deductible is $500 although higher deductibles are available. In the case of expensive cars, insurers sometimes insist on a higher deductible. While a higher deductible will reduce your insurance cost, the saving is usually very small.

Specified Perils: This is the coverage that pays for damage to your car caused by specific events other than collision. Examples are: theft or attempted theft, fire, lightning or hail. If your car is stolen, it also covers the cost to rent a substitute car up to $30 per day and subject to a maximum of $900 for any one loss. This coverage is not recommended. We recommend Comprehensive or All Perils coverage instead as they provide better coverage at a comparatively low additional cost.

Comprehensive: This is the coverage that pays for damage to your car caused by any Specified Peril (described above) plus vandalism and glass breakage. It does not cover damage caused by collision or upset, or damage resulting from wear and tear or mechanical breakdown.

The most common deductible is $500 although higher deductibles are available. Insurers sometimes insist on a higher deductible for expensive cars or if there have been several Comprehensive claims over a 2 or 3 year period. While a higher deductible will reduce your insurance cost, the saving is usually very small.

All Perils: This coverage combines collision and comprehensive coverages and offers other less common (but possible) causes of loss or damage to the car (for example: someone living in your household steals your car).

The cost is the same as would be charged if collision and comprehensive coverages were bought separately with the same deductibles. The most common deductible is $500 although higher deductibles are available. In the case of expensive cars, insurers sometimes insist on a higher deductible. While a higher deductible will reduce your insurance cost, the saving is usually very small.

Loss of use: This coverage is provided by an endorsement called the "OPCF 20". It provides up to $900 (or $1,000 for some insurers) for you to rent a replacement car if your own car is damaged:

Non-owned car/drive other car coverage: This coverage is provided by an endorsement called "OPCF 27". It extends whatever Collision, Specified Perils, Comprehensive, or All Perils coverage you have purchased for your own car to a rental car or other non-owned car for which you have accepted responsibility under a written contract. Note that because there must be a written contract, coverage does not extend to borrowed cars AND there is normally a coverage limit of $25,000 (Canadian dollars!) and your deductible will apply.

This coverage is valuable for people who rent cars while travelling if they want to avoid having to pay the daily insurance premium charged by the car rental company. However, when travelling keep in mind that this endorsement only applies in Canada and the United States. (This territorial restriction applies to ALL coverage provided by the car insurance policy.)

The endorsement provides another advantage with respect to Third Party Liability coverage. The standard auto policy automatically provides Third Party Liability coverage for the named insured and the insured's spouse while driving a car owned by someone else. However, other listed drivers such as children do not have this automatic coverage unless you have this endorsement. Purchasing this endorsement ensures peace of mind if they drive someone else's car because you will know they have the protection that is provided by your policy if needed and it is very cheap coverage (usually about $10).

See also the section "Am I covered driving a rented car?".

Waiver of Depreciation: If you own a car that you purchased or leased new you ought to have an endorsement called Waiver of Depreciation or "OPCF 43". Effectively, this endorsement means the insurer will not depreciate your car if it is a total loss due to theft or because of the extent of damage. The endorsement only applies during the first 24 months that you own the car. After 24 months the car is valued on a depreciated basis. It is important to keep this in mind if you are leasing a car, because leases become complicated contracts to deal with if the car happens to be a total loss. If you doubt this, try to calculate what you owe the leasing company if your car is a total loss 36 months into a 4 year lease and then compare that figure with the depreciated value of your car. (Note: purchasing this coverage does not guarantee that ALL outstanding lease-costs will be paid)


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