Car Insurance

Onlia’s guide to car insurance in Ontario

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Understanding auto insurance in Ontario

Wherever you’re coming from, this guide will help you understand the basics of auto insurance in Ontario.

Car insurance companies in Ontario use a no-fault insurance system, just like Québec, New Brunswick, Nova Scotia, P.E.I. and Newfoundland.

No-fault insurance means that instead of approaching the other driver’s insurance company for the cost of damages after an accident, you’ll be reimbursed by your insurer. The no-fault system also helps you avoid lengthy and expensive legal battles, as you’ll only need to interact with your insurance company — they’ll handle everything else.

The insurance companies will then make a fault determination. Depending on the situation, you’ll either be considered fully at fault, partially at fault or not at fault. This affects what type of coverage is activated and whether your insurance premiums change after the accident.

With this in mind, the next thing you should know is what your mandatory insurance covers. Then, you’ll be on your way to finding the best auto insurance Ontario has to offer.

Will private insurers give you what’s mandatory to drive in Ontario?

While car insurance companies in British Columbia and Manitoba are government-run, and car insurance companies based in Saskatchewan and Québec are partially run by the government, all car insurance companies in Ontario are private sector. But even though car insurance packages in Ontario are set by the free market, a minimum amount of coverage is mandatory and included with any basic insurance package.

The minimum coverage you’ll need to put your car on the road is available with even the cheapest car insurance in Ontario. It guarantees you what you need, while also allowing for competitive rates between companies.

If you buy car insurance in Ontario, the mandatory coverage you receive includes:

Direct Compensation coverage

This helps pay to repair your car when you were deemed not at fault. If you’re partially at fault, it will provide partial coverage. For example: if you’re considered 10% at fault for an accident, you’ll receive up to 90% of the cost of repairs.

Uninsured Automobile coverage

This protects you financially on multiple fronts: if you collide with an uninsured driver, if you’re the victim of a hit-and-run where the driver is unknown, or if a driver’s coverage limit isn’t enough to pay your costs.

Combined, the basic package will cover you for a variety of situations you may encounter out on the road. But it’s far from exhaustive. Depending on your needs as a driver, and the budget you have for your car insurance, you may want to consider further protection (like increasing your liability or accident benefit coverage). Onlia has plenty of add-ons to offer.

Third-Party Liability coverage

This covers your legal liability even if you’re partially at fault for an accident. Anyone that suffered injury or property damage (a driver, passenger, pedestrian, or property owner), can pursue a legal settlement. Third-party liability coverage will pay for legal fees and any expenses you’re deemed responsible to cover.

Accident Benefits coverage

This provides medical, rehab and funeral costs to you, your passengers and anyone else injured in an accident. Most importantly, it protects you by paying for any medical costs that aren’t covered by the Ontario Health Insurance Plan (OHIP).

Premium car insurance options in Ontario

Before you hit the road, it’s worth checking out some of the insurance options that aren’t included in your mandatory coverage. The most common are collision insurance and comprehensive insurance.

Collision insurance balances out your direct compensation by covering the cost of damages when you are at fault. This is highly recommended to ensure you’re fully protected no matter how an accident occurs.

Comprehensive insurance rounds out your policy by covering you for damages that occur in most other situations. This means anything that happens outside of a collision like objects falling on your car, fire damage, vandalism, harsh weather and even theft.

If you’re aiming for cheap car insurance, Ontario has specified perils coverage. This acts in the same way as comprehensive, but is less expensive and limits what’s covered. It’ll likely exclude events like vandalism or falling objects.

If you still need more to put your mind at ease, look into endorsements for extra protection. These can extend coverage to car rentals while your vehicle is being repaired and even stop your premium from going up after your first at-fault collision.

How the price of car insurance in Ontario is calculated

Generally, the average cost for car insurance in Ontario is $1,500 per year. Your unique price is calculated based on:

  • Age
  • Gender
  • Location
  • Car age & model
  • Mileage driven
  • How often you use your car
  • Who else is driving your car
  • Your driving record
  • The number and types of claims you’ve filed

All this adds up to determine how likely you are to file an insurance claim, and ultimately, your insurance price. Learn more about what goes into calculating your car insurance premium

Ways to save on car insurance in Ontario

Insurance rates in Ontario are variable. Here are a few things you can do to get your price down.

Increase your deductible

You’ll be paying a larger portion of the cost if you get in an accident, but the monthly premium will be lower.

Use a safe driving app

They can offer rewards for improving your road habits, and your premium will drop as you improve your overall driving record.

Bundle your home and auto insurance

Many insurance companies will offer a healthy discount on both when you keep them together.

Take driving lessons

Completing a government-approved course will give you a break on insurance.

Reconsider your coverage

If your car has depreciated in value and is no longer worth much more than the deductible for collision or comprehensive insurance, it could be cheaper to discontinue those options and save up for a replacement.

Look into the cheapest cars to insure in Ontario

The particular type of car that you drive could be driving up your price. 

Once you find the best auto insurance in Ontario for your needs, talk to your provider about how they can work within your budget. They may be able to offer up advice on how to get the most from your auto insurance.

Get a quote from Onlia today to hit the road tomorrow. We’re always available if you need help along the way.

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