Auto insurance is a contract that protects your financial security in case of an accident. Although it is not mandated by federal law, the purchase of auto insurance is usually a requirement in most states; every state (with the exception of New Hampshire and Wisconsin) have minimum insurance laws.
These two states, instead of having insurance requirements, have mandated financial responsibility laws, so that the owner of a car is required to show that he has sufficient funds to pay any necessary claims. If said owner cannot produce proof of satisfactory assets, then he must buy an auto insurance policy. Regardless of the law, having good auto insurance is practical for the driver who wishes to avoid lawsuits or immense repair bills.
According to the Insurance Information Institute (III), a basic auto insurance policy is comprised of six basic types of coverage. While some of these types of coverage are required by state law, some are considered optional. These are:
1. Bodily injury liability
2. Property damage liability
3. Medical payments or Personal Injury Protection (PIP)
4. Collision
5. Comprehensive
6. Uninsured/Underinsured motorists coverage
Liability coverage is the foundation of any auto insurance policy, and is required in most states. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily-injury coverage pays for medical bills and lost wages. Property-damage coverage pays for the repair or replacement of things you wrecked other than your own car. The other party may also decide to sue you to collect "pain and suffering" damages.
Liability insurance
Liability insurance (both bodily injury and property damage) is the foundation of most auto insurance policies. Every state that requires auto insurance mandates the purchase of property damage liability, and Florida is the only state that requires auto insurance but does not call for bodily injury liability. If you are at fault in an auto accident, your liability coverage will pay all the expenses, bodily injury, property damage, and any legal bills. The bodily injury coverage would pay for medical bills and lost wages; the property damage coverage would pay for any auto repairs, or replacement. Property damage liability usually repairs damage to other vehicles, but can also cover damages to things such as lamp poles, fences, buildings, or anything else that your car may have struck.
Collision and comprehensive coverages
If you cause an accident, collision coverage will pay to repair your vehicle. You usually can't collect any more than the actual cash value of your car, which is not the same as the car's replacement cost. Collision coverage is normally the most expensive component of auto insurance. By choosing a higher deductible, say $500 or $1,000, you can keep your premium costs down. However, keep in mind that you must pay the amount of your deductible before the insurance company kicks in any money after an accident.
Insurance companies often will "total" your car if the repair costs exceed a certain percentage of the car's worth. The critical damage point varies from company to company, from 55 percent to 90 percent.
Comprehensive coverage will pay for damages to your car that weren't caused by an auto accident: Damages from theft, fire, vandalism, natural disasters, or hitting a deer all qualify. Comprehensive coverage also comes with a deductible and your insurer will only pay as much as the car was worth when it got wrecked.
Because insurance companies normally will not pay you more than your car's book value, it's helpful if you have a rough idea of this amount. Check the Kelley Blue Book or the National Automobile Dealers Association. If your car is worth less than what you're paying for the coverage, you're better off not having it.
Neither collision nor comprehension insurance is required by any of the states, but some lenders, when the owner finances the car, may require the purchase of collision and comprehensive in the loan agreement. Even when it is not required, collision and comprehensive coverage is highly recommended by the insurance industry, so that in the unforeseen event of damage or theft, the owner of the car can avoid heavy bills. Theft of cars is not as unusual as some people may think. In 2004, a car was stolen in the United States every 26 seconds, and a car had a 1 in 190 chance of being stolen.
November 30, 2007
Auto insurance basics
November 17, 2007
Tips for Young Drivers in auto insurance
As a young driver, here are a few tips on getting the best
rate for you:
■ Take a driver training course that is recognized by your
insurance company.
■ Consider gaining experience as a named occasional
driver under the insurance policy of a parent or
guardian, rather than as a principal driver of your own
car. Premiums for young, occasional drivers are much
lower than premiums for young, principal drivers.
■ Ask your insurance company if they offer any student
discounts. Some companies give discounts to young
drivers with good grades, or young drivers who live
away from home for part of the year.
As a young driver, building a good driving record free of
at-fault accidents and driving convictions is the best way to
ensure low future premiums.
Tips for Saving Money on Car Insurance
The following tips may help you save money on your car
insurance:
■ Build a good driving history free of accidents and
convictions. This means driving carefully and obeying
the rules of the road. Wear your seat belt and don’t use
your cell phone while driving. Don’t drink and drive.
■ Be a comparison shopper. Talk to your friends and
neighbours. Make some phone calls and check
websites for on-line quotes. Compare rates. Different
companies price policies differently. Do your shopping
well in advance of when your current policy expires.
■ Don’t pay for coverage you don’t need. For example,
it may not be cost effective to have Collision or
Comprehensive coverages on a car that is worth less
than $1,000 because any claim you make would not
substantially exceed your deductible or the annual cost
of the premium.
■ Consider higher deductibles. This means you’ll
contribute more toward the loss if you have an
accident, but it will also mean a lower premium.
■ Make sure you always pay your premium on time.
If you pay your premium by cheque or through
automatic withdrawals from your bank account, make
sure you always have enough money to cover your
payment. If your insurance company is unable to
withdraw your payment because you don’t have
enough money in the account, it could result in the
is cancelled for nonpayment of premium more than
twice, and you have to purchase car insurance all over
again, many companies may consider you a higher risk,
and you could pay much more for your car insurance.
Also, if you’ve had your insurance policy cancelled
more than once over the past three years because you
failed to pay your premium, insurance companies are
not required to offer the option of monthly payments.
■ Choose the type of car you drive wisely. For example,
if you buy a car with a high theft rate, your premium
will be higher. Choose a car with good security
features.
■ Take advantage of discounts which may be available
to you. (See the section called “Discounts” for more
information.)
■ Make sure you tell your broker, agent or insurance
company about any changes (e.g., different drivers,
different use of the car) on your policy. In some cases,
your premium will drop.
Discounts for an insurance shopper
As an insurance shopper, you should check with your
insurance company, agent or broker about possible
discounts that may be applicable to you, such as:
Driver Training Discount: Most companies offer a discount
or a reduced premium for new drivers who have completed
a recognized driver training program.
Group Discount or Group Rates: If you belong to an
eligible group, check to see if they offer group rates.
An eligible group may include employees of the same
employer, members of a union or professional or
occupational association, or certain non-profit associations.
Multi-Policy Discount: Some insurance companies offer a
discount if you purchase your car and home insurance from
the same company. This discount can range from 3 to 15%.
Multi-Vehicle Discount: You may be able to get a
discount if you insure more than one vehicle with the
same insurance company. The multi-vehicle discount can
range from 5 to 15%.
Renewal Discount: Your company may offer you a renewal
discount if you have been with the company for a certain
number of years without an at-fault accident. The discount
can range from 5 to 20%.
Retiree Discount: If you are retired and meet certain
conditions, you may be able to get a retiree discount on
your premium. The retiree discount can range from 5 to
15% off your premium for the accident benefits coverage.
Other Discounts: Some companies may offer discounts if
your yearly car mileage is low or if you have installed an
alarm in your car. Each company applies discounts differently,
with some applying it to certain coverages only,
while others apply it to your entire premium. Check with
your broker, agent or insurance company to find out what
discounts are available and how they are applied.
What Are Underwriting Rules?
Insurance companies use underwriting rules to decide
whether or not to sell car insurance to you. Insurance
companies also use underwriting rules to decide whether
or not to renew your existing car insurance policy, or to
change your physical damage coverage, such as Collision
or Comprehensive coverage.
All underwriting rules used by insurance companies must
be filed with FSCO. Once FSCO has reviewed and approved
these rules, insurance companies may not use other rules
to deny you coverage.
If an insurance company refuses to sell you an insurance
policy, or to renew your policy, the company must advise
you in writing which rule (or rules) it has used to deny
coverage to you.
While underwriting rules differ from company to company,
these are some of the more common rules:
• whether you or drivers in your household have had
more than a certain number of at-fault accidents or
driving convictions;
• whether you’ve had a car insurance policy cancelled
a number of times because you failed to pay your
premium; or
• whether you’ve failed in the past to provide correct
or complete information when applying for car
insurance.
When shopping for car insurance, or when trying to renew
your car insurance policy, keep in mind that an insurance
company’s underwriting rules will affect whether or not you
can obtain insurance – or continue to be insured – with
that insurance company. Check with your broker, agent or
insurance company to find out what your company’s
underwriting rules are and how they may affect you.
Underwriting rules which do not comply with the Insurance
Act or the regulations, such as those which are contrary
to public policy, are prohibited. FSCO has determined that
rules which are contrary to public policy deny insurance
to individuals based on such factors as:
• religion, race, nationality or ethnic group;
• age, sex and marital status;
• location of the car; or
• whether they are newly licensed or a driver new
to Canada.
Note: Factors such as: age; sex; marital status; where
you live or the location of the car; and whether you
are newly licensed or a driver new to Canada; ARE
permitted as rating criteria (i.e., what the policyholder
will pay for coverage).
Auto Accident Victim
“DISCOVER WHAT INSURANCE COMPANIES
DON’T WANT YOU TO KNOW ABOUT YOUR INJURY CLAIM!”
If you have recently been injured in an auto accident because of someone else’s fault, you are probably confused or worried about what steps to take next:
1. Will I be paid for the time I’m losing from work?
2. Will my medical bills be paid?
3. What do I do if the person who hit my car doesn’t have auto insurance?
4. Will my car be repaired?
5. What if I don’t make a full recovery and cannot return to my former work?
6. What will the insurance company offer me for my personal injuries?
7. How will I know that the insurance settlement is fair for my injuries?
8. How will I know that the lawyer I’ve chosen to represent my case is a competent lawyer and will know what to do?
9. How will I be able to know if I don’t have a competent lawyer?
NINE INSIDE SECRETS INSURANCE COMPANIES DON’T WANT YOU TO KNOW ABOUT YOUR INJURY CLAIM
This is where you get Ripped Off. The insurance companies don’t want you to know your rights and to what you are entitled when you make a personal injury claim following an accident. The following are secrets the insurance companies do not want you to know:
1. You DO have the right to an attorney and should at least consult with one:
Attorneys who specialize in personal injury and auto accident law generally do not charge an injured person in an initial conference. Generally, you can meet with an attorney for one hour and learn what rights you have as a result of the injury that you suffered. You can then make your own decision as to whether you wish to retain an attorney to represent you on your claim. As I mentioned, there is generally no charge for this conference and you should find that out up front from the attorney when you call the office to schedule such a consultation.
2. You are not in “GOOD HANDS” if you trust the insurance company:
Despite the fact that many insurers will encourage you not to retain an attorney, and they will tell you that they intend to treat you as one of their insureds and that you are in good hands, this is a myth. The insurance companies have one and only one interest when they contact you early after your accident. They are interested in getting your claim settled as quickly and cheaply as possible. Providing you a “fair” settlement is not first and foremost in their mind. They want to save the shareholders of their big insurance company as much money as they can from lost profits.
3. The auto body repair shop the insurance company refers you to has a sweetheart deal with the insurer:
Frequently, insurance companies will refer you to one or more body shops to have estimates performed on the damage to your vehicle. What they do not tell you is that with many of these body shops, there are sweetheart deals by which the body shops use cheaper and inferior parts to repair your vehicle and only repair the obvious damage as opposed to the hidden damage. As a result of these repairs, you might have continuing problems with your car which will frustrate you and may never get fully repaired. It will also result in a lower cost of repair which the insurance company will then throw back at you and say how badly could you have been injured if it didn’t cost much money to repair your vehicle.
4. In addition to getting your vehicle repaired, you are also entitled to recover the decreased fair market value of your car:
Insurance companies will talk to you about repairing the property damage to your vehicle. They will never initiate conversation with you regarding the fact that in addition to the repairs to your vehicle, if, as a result of the accident, your vehicle has lost fair market value, you are also entitled to a sum of money to compensate you for that loss of fair market value. This is something that even many attorneys are not aware of and you have to be certain to inquire into this when you consult with an attorney.
5. Insurance companies often do not tell you about all benefits to which you are entitled:
Whether it be your insurance company or that of the responsible party, you might be told that you are entitled to have your medical bills paid and they may offer to pay you for your loss of earnings or out-of-pocket expenses. But, the insurance company will not go into any detail as to what other damages you are entitled to receive compensation for. Some of these damages I have listed in the prior section of this report. Further, if you are a pedestrian or bicyclist and are injured by a person driving a motor vehicle, you are considered an additional insured under that policy, even if the accident was not that person’s fault.
6. It is not in your best interest to settle your claim quickly:
The insurance adjuster will be interested in settling your claim as quickly and cheaply as possible. To accomplish that, the adjuster might even offer to pay the medical bills that you have incurred to date and continue to pay reasonable medical bills for another six months. However, early in a case, you have no way of knowing just how seriously injured you are and just how much treatment you might need and for how long. If you enter into a settlement of that nature, once that six months passes, you are out of luck. Further, what do you do if you submit additional medical bills to the insurance company within that six month period of time, and the insurance company tells you that they don’t believe those bills are reasonable or related to the accident? You have lost all leverage in dealing with the insurance company and may not even be in a position where you can sue them to force them to pay for those medical bills. It will certainly be difficult for you to find an attorney to represent you at that point in time.
7. People truly can be injured even with minimal property damage to their automobile:
If you are injured in an accident where the vehicles did not sustain much property damage, the insurance adjuster will tell you that they would not expect you to be very injured, nor to have incurred much in the way of medical expenses given the minimal amount of damage to your vehicle. They will attempt to intimidate you into not seeking health care and not getting adequate treatment for those injuries. In reality, studies show that people very definitely can be injured in what are called low impact automobile accidents. In fact, thousands of people sustain such injuries and the visible damage to the automobile itself is irrelevant to the injuries that can be sustained by the occupants of the automobile.
8. So called “independent medical examiners” where the insurance company might send you to be examined are NOT “independent”:
Whether it be your insurance company or the other person’s insurance company, at some point in time they may wish to send you to a doctor for an examination. They will tell you that this is an “IME,” which is supposed to stand for “Independent Medical Examination.” In reality, these doctors are NOT independent. They get paid thousands upon thousands of dollars every year by the insurance industry to write boiler plate reports that are designed to cut off all benefits to the injured person. Although there are times that you cannot avoid attending these examinations, there are things you can do to prepare for them and to attempt to minimize the damage that could be done to your claim by such examinations. You’ll never learn these things from the insurance company. You will have to be advised by a private attorney who specializes in personal injury and auto accident claims.
9. If they can’t settle early, delay, delay, delay:
If the insurance company cannot get the claim settled early, then they switch tactics to delay matters as long as possible. It is not unusual to have your telephone calls not returned and, when you do finally talk to an adjuster, find out that the adjuster has been changed. In many instances, an adjuster may be changed three or four times within a matter of a couple months. The intent here is to get the injured person as confused and frustrated as possible so that hopefully he or she will decide they can’t waste anymore time on trying to deal with this company and will just go away.
These are just some inside secrets or tips that the insurance companies don’t want you to know about your personal injury or property damage claims.
Factors That May Affect Your Car Insurance Rates
Insurance works according to a “pooling” concept. This
means that companies “pool” the money they receive from
you and other drivers they insure. As a policyholder, you are
one member of the risk pool in the company you select as
your insurer.
The cost of all the claims paid out by the insurance company
is reflected in the rates it charges its customers.
The rates charged to individual customers are based on a
number of additional factor.
Factors That May Affect Your Car Insurance Rates
The amount you pay for insurance will depend on factors
such as:
The type of car you drive: Many insurance companies rate
makes and models of cars according to their actual claims
experience, such as the cost of repairs, the rate of injury,
and the likelihood that a particular car may be stolen or
involved in an accident.
Your driving record: The premium you pay for car insurance
also depends on your driving record. This includes at-fault
accidents, the length of time you have been licensed to
drive, whether or not you have taken a driver training
course that your insurance company recognizes, and driving
convictions (such as speeding, impaired or careless driving).
Generally, your first minor conviction will have little or no
impact on your rates. But if you have had a second minor
conviction in the last three years, it will most likely affect
your premium. If you have had at-fault accidents over the
last six years and/or major, serious or a number of minor
driving convictions over the last three years, your premium
will be higher or your insurer may not renew your
insurance. Likewise, the better your driving record, the
lower your premium will be. (Impaired or Careless Driving
convictions are not considered to be minor convictions, but
are major convictions and will impact your insurance premium and whether you are renewed.)
How much you drive: Your car insurance premium will also
be affected by how much you drive. This is because the
more time you spend on the road, the higher the chances
of becoming involved in a car accident. In urban areas,
driving to work may include driving to a subway, bus or
train station. If you live close to work, you will probably
have a lower premium than someone who lives far from
work or who needs to use their car for business.
Where you live: Car insurance rates are generally higher
in larger urban centres. This is because there are a greater
number of cars on the road, and the chances of getting
into an accident are higher. Also, more cars are stolen in
urban areas.
Your age: In general, mature drivers have fewer accidents
than younger drivers, particularly teenagers. Drivers who
are 25 years of age and over can generally buy insurance at
a considerably lower cost than younger drivers.
The amount of coverage: Many people buy additional
protection beyond the mandatory coverage. For example,
if you buy optional Collision coverage which protects you
for damage to your car regardless of who caused the
accident, or Comprehensive coverage which protects you
against theft, vandalism, hail or explosion, your car will be
covered against any such incidences, but you will pay more.
There are also other options such as increasing your Third-
Party Liability protection. All of these optional coverages
will have an effect on the cost of your policy.
Your deductibles: Your deductible is the portion of a
loss that you are required to pay. Your deductible can
vary, depending on the type of coverage you have and
the percentage of fault you are assigned in the event
of an accident. There are deductibles for Collision,
Comprehensive, All Perils and Specified Perils coverages.
You can also pay a lower premium by having a deductible
on Direct Compensation-Property Damage (DC-PD)
coverage, or raising the deductible on the other coverages.
For example, by having a higher deductible of $500,
instead of $300, on Comprehensive coverage you can save
about 10% off of your Comprehensive premium.
These savings are due to the fact that higher deductibles
mean you pay more towards the cost of repairing your car,
while your insurance company pays less toward the total
cost of repair. As a result, your premium will be lower.
If you’d rather have lower deductibles, you may be able to
do so if you meet certain conditions and if your company
offers them, but your premium will be higher. (Recognize,
however, that since Collision and Comprehensive coverage
are optional coverages, your insurance company may
obligate you to carry higher deductibles if you have had
a lot of prior claims.)
If you have an older car, you may choose to reduce your
premium further by dropping Collision and Comprehensive
coverage entirely.
Note: Your insurance company cannot use rating criteria such
as credit history, bankruptcy, employment status, credit
card possession and residence stability, to determine how
much you should pay for car insurance.
Insurance companies use underwriting rules to decide
whether or not to sell car insurance to you. Insurance
companies also use underwriting rules to decide whether
or not to renew your existing car insurance policy, or to
change your physical damage coverage, such as Collision
or Comprehensive coverage.
All underwriting rules used by insurance companies must
be filed with FSCO. Once FSCO has reviewed and approved
these rules, insurance companies may not use other rules
to deny you coverage.
If an insurance company refuses to sell you an insurance
policy, or to renew your policy, the company must advise
you in writing which rule (or rules) it has used to deny
coverage to you.
While underwriting rules differ from company to company,
these are some of the more common rules:
• whether you or drivers in your household have had
more than a certain number of at-fault accidents or
driving convictions;
• whether you’ve had a car insurance policy cancelled
a number of times because you failed to pay your
premium; or
• whether you’ve failed in the past to provide correct
or complete information when applying for car
insurance.
Where Can You Buy Car Insurance?
Shopping for car insurance can be confusing. There are
many companies that sell car insurance in Ontario. There
are also many ways to buy car insurance. For example, you
can buy car insurance in person, over the phone or through
the Internet from:
■ a broker;
■ an agent; or
■ directly from an insurance company.
The difference between insurance agents and brokers is that
an agent represents an insurance company, while a broker
represents consumers to assist them in obtaining coverage
from one of the companies with which that broker deals.
If you choose to buy car insurance through a broker, you
may ask him or her for a list of all the companies for whom
he or she sells insurance. You can also ask your broker for
the names of the companies and the quotes. If you want
this information in writing, your broker is required by law
to provide it to you.
You should never buy insurance from a company that accepts
barter payment. People who barter perform a service for
another member of the barter company and obtain barter
dollars for the work they do. They can trade barter dollars
for other products or services offered through the barter
company. Companies that accept barter payments are not
licensed to sell insurance in Ontario, and if you buy car
insurance through barter companies, you do not have valid
insurance and may have to pay substantial fines.
Multiple Car Insurance Quotes - How to Get the Best Rate
Getting multiple car insurance policies through the same insurance company can save you a lot of money on your insurance. Here's how to get the cheapest multiple car insurance quotes with a reputable company.
Why Get Multiple Car Insurance?
Having one or more cars insured with the same company can save you up to 15% on your auto insurance. Another benefit is that you have only one insurance company to deal with, and only one bill to pay.
How to Get the Cheapest Multiple Car Insurance Quote
The easiest and quickest way to get the cheapest multiple car insurance quote is to go online to an insurance comparison website (see link below). The advantages of using one of these sites are:
* You get quotes from multiple insurance companies, not just one, so you can compare those quotes and choose the cheapest one.
* It only takes a few minutes of your time, saving you hours of visiting insurance company websites or calling local insurance agencies.
* Most insurance comparison websites only affiliate with A-rated companies, so if you choose to purchase your insurance through them you know you'll be dealing with a solid, reliable company.
How to Lower Your Premium
Increase your deductible - Increasing the deductible (what you pay toward insurance claims before your insurer will pay) can save you up to half on your insurance bill. This will also prevent you from making too many small claims which could cause your insurer to cancel your policy.
Request discounts - Auto insurance companies offer all kinds of discounts and taking advantage of them can save you a lot of money. Some of these discounts include:
* Multiple policy discounts for having both your homeowners policy and your auto insurance policy with the same company.
* Safety discounts for having airbags, anti-lock brakes, or other safety features installed on your car.
* Security discounts for having an auto alarm or an anti-theft device installed on your car.
* Senior discounts if you are over the age of 50.
* Safe driver discounts if you have an accident-free driving record for three or more years.
* Low mileage discounts for driving less than the average driver.
* Professional discounts if you're in the military, law enforcement, or other designated professions.
Multiple Car Insurance Quotes - How to Get the Best Rate
Getting multiple car insurance policies through the same insurance company can save you a lot of money on your insurance. Here's how to get the cheapest multiple car insurance quotes with a reputable company.
Why Get Multiple Car Insurance?
Having one or more cars insured with the same company can save you up to 15% on your auto insurance. Another benefit is that you have only one insurance company to deal with, and only one bill to pay.
How to Get the Cheapest Multiple Car Insurance Quote
The easiest and quickest way to get the cheapest multiple car insurance quote is to go online to an insurance comparison website (see link below). The advantages of using one of these sites are:
* You get quotes from multiple insurance companies, not just one, so you can compare those quotes and choose the cheapest one.
* It only takes a few minutes of your time, saving you hours of visiting insurance company websites or calling local insurance agencies.
* Most insurance comparison websites only affiliate with A-rated companies, so if you choose to purchase your insurance through them you know you'll be dealing with a solid, reliable company.
How to Lower Your Premium
Increase your deductible - Increasing the deductible (what you pay toward insurance claims before your insurer will pay) can save you up to half on your insurance bill. This will also prevent you from making too many small claims which could cause your insurer to cancel your policy.
Request discounts - Auto insurance companies offer all kinds of discounts and taking advantage of them can save you a lot of money. Some of these discounts include:
* Multiple policy discounts for having both your homeowners policy and your auto insurance policy with the same company.
* Safety discounts for having airbags, anti-lock brakes, or other safety features installed on your car.
* Security discounts for having an auto alarm or an anti-theft device installed on your car.
* Senior discounts if you are over the age of 50.
* Safe driver discounts if you have an accident-free driving record for three or more years.
* Low mileage discounts for driving less than the average driver.
* Professional discounts if you're in the military, law enforcement, or other designated professions.
Tailoring Your Coverage,
Your insurance broker, agent or company representative
can provide you with a complete explanation of optional
coverages that are available, as well as help you to decide
which, if any, you may require.
Optional Coverages
Optional coverage is a term used to describe increases to
the mandatory minimum coverages that are required by
law in the basic car insurance policy. Optional coverages
allow you to choose your car insurance coverage to suit
your individual needs. For example, you may increase
your maximum level of Third-Party Liability and Accident
Benefits coverages.
Third-Party Liability Coverage: While you are legally
required to carry a minimum of $200,000, you can increase
this coverage to better protect yourself. The cost to
increase your Third-Party Liability coverage to $1 million
or $2 million is small in most cases.
Accident Benefits Coverage: You can also increase your
maximum level of Accident Benefits coverage by buying
any or all of the optional benefits listed below. Check to
see if you have benefits available to you at work or elsewhere,
so that you are not paying for coverage you already
have. If you are covered by these benefits elsewhere, you
may not need to buy optional benefits.
Income Replacement Benefits: If you cannot work as the
result of a car accident, you may be eligible for basic weekly
income replacement benefits of up to $400. If this is not
enough to cover your current income level, you may want
to consider buying optional income replacement benefits
to increase your maximum weekly protection to $600, $800
or $1,000.
Medical, Rehabilitation and Attendant Care Benefits: The
standard maximum amount for medical and rehabilitation
expenses, such as physiotherapy, chiropractic treatment,
dental expenses, etc., is $100,000. If you are catastrophically
injured, the standard maximum is $1,000,000. The
standard maximum for attendant care is $72,000. If you
are catastrophically injured, the standard maximum is
$1,000,000. You can buy optional benefits which will
cover up to $1,172,000 in additional medical, rehabilitation
and attendant care expenses, and up to $3,000,000 for
catastrophic injuries.
Caregiver Benefits: If you are providing care full-time to
dependants and can no longer provide that care as the
result of a car accident, you may be eligible for caregiver
benefits. The standard maximum amount for caregiver
benefits is $250 per week for one dependant, plus $50 per
week for each additional dependant. If you buy optional
caregiver benefits, the coverage increases to $325 per week
for one dependant, plus $75 per week for each additional
dependant.
Dependant Care Benefits: You can only claim optional
dependant care benefits if you were employed at the time
of the accident, are not receiving a caregiver benefit, and
have to pay for childcare expenses as a result of the accident.
Optional dependant care benefits cover up to $75 per
week for the first dependant and $25 for each additional
dependant.
Death and Funeral Benefits: In the event that you die as a
result of a car accident, the standard amount which will be
paid is $25,000 to your eligible spouse or same-sex partner,
$10,000 for each dependant, and a maximum of $6,000 for
funeral expenses. If you buy optional benefits, you can
increase these amounts to $50,000 to your eligible spouse
or same-sex partner, $20,000 for each dependant, and
$8,000 for funeral expenses.
What’s in a Basic Car Insurance Policy?
If you drive a car in Ontario, provincial laws require you to
buy, at the very least, the following car insurance coverage:
Statutory Accident Benefits Coverage: This section of your
car insurance policy provides you with supplementary
medical, rehabilitation, attendant care, caregiver, nonearner
and income replacement benefits if you are injured
in a car accident, regardless of who caused the accident.
Third-Party Liability Coverage: This section of your car
insurance policy protects you if someone else is killed or
injured, or their property is damaged. It will pay for claims
as a result of lawsuits against you up to the limit of your
coverage, and will pay the costs of settling the claims.
By law you must carry a minimum of $200,000.
Direct Compensation - Property Damage (DC-PD)
Coverage: This section of your car insurance policy covers
damage to your car or its contents, and for loss of use of
your car or its contents, to the extent that another person
was at-fault for the accident. It is called direct compensation
because even though someone else causes the damage,
you collect directly from your own insurer, instead of the
person who caused the damage.
Note: Coverage under the DC-PD section of your car
insurance policy only applies if the following conditions
are met:
■ the accident took place in Ontario;
■ there was at least one other car involved in the
accident; and
■ at least one of the other cars is also insured by an
insurance company that is licensed in Ontario or has
signed a special agreement with FSCO to provide this
coverage.
If these conditions are not met, then you can make a
claim on your optional Collision coverage (if you have it),
whether or not you are at-fault. If you don’t have Collision
coverage, you may be able to pursue recovery from the
at-fault driver to the extent you were not at fault for the
accident.
Uninsured Automobile Coverage: protects you and your
family if you are injured or killed by a hit-and-run driver
or by an uninsured motorist. It also covers damage to your
car caused by an identified uninsured driver.
Your Car Insurance Policy
insurance that is summarized on your Certificate of
Automobile Insurance, and for which you have agreed to
pay a premium.
A Certificate of Automobile Insurance is a written document
summarizing your insurance coverage contained in
your insurance policy. You can view the entire automobile
insurance policy at: www.fsco.gov.on.ca or by asking your
insurance company for a copy.
The Certificate lists the car or cars insured and the coverages
purchased, a description of how you are rated for
the premiums charged and the period during which you
are covered by insurance. It is important that you read
this Certificate.
You only have insurance coverage for a car if your
Certificate of Automobile Insurance shows a premium for
that car or shows that the coverage is provided at no cost.
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Car / auto Insurance
You have many choices to make when
buying car insurance. This guide can
help you understand your car insurance
coverage and assist you in asking
informed questions so you can choose
the coverage that best meets your needs.
This blog is offered as a service from me to help
you understand insurance coverages, and to assist you
in asking informed questions so you can choose the car
insurance coverage that best meets your needs.
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