The 5-Step Guide to Choosing the Right Car Insurance in Ontario

Wondering what you need in a car insurance policy? This guide will help you choose the right coverage for your lifestyle.

Buying a car insurance policy isn’t topping anyone’s list of favourite things. Traditionally it’s been known as a “grudge” purchase – something no one wants to buy, but they have to. It’s no wonder insurance shopping can feel like a chore.

But choosing the right coverage for your situation is important, and can save you big headaches – not to mention a lot of money – when you need your insurance down the road. A little research goes a long way!

We’re here to make the process as quick and easy as we can. If you’re a driver in Ontario, this guide will give you a run-down of important points to consider when buying an auto insurance policy, along with the kinds of coverage options you can choose from.

Make sure your coverage fits your lifestyle

The first question people ask when buying car insurance is often, “how much coverage do I need?” Understandably, this is hard to gauge without real-life context.

Legally, every driver in Ontario needs to, at the very least, meet the minimum level of coverage outlined in a standard auto insurance policy.

We don’t recommend settling for the legal minimum. The thin level of protection it offers leaves you vulnerable to some major out-of-pocket costs in the event of a serious collision.

Think of it this way: if you got into a collision tomorrow, how much of the cost could you cover yourself? The more coverage you get, the more your insurance company will be able to cover things like vehicle repairs and medical expenses.

Our recommendation is to get as much coverage as you can reasonably afford to maintain your lifestyle following a collision, considering the costs involved.

Third-Party Liability coverage

This part of your car insurance policy protects you if you hurt someone or damage their property while driving, and you're sued for damages.

Legally, you need at least $200,000 of third-party liability (TPL) coverage in order to drive.

That may seem like a high number, but if you’re found to be at-fault for a collision, a legal settlement can easily skyrocket past $200,000 -- especially if significant medical expenses are involved.

The good news is that it’s generally pretty cheap to upgrade your TPL coverage to provide you with more protection. To give you an idea of amounts, Onlia policies come standard with $1 million in TPL coverage, with the option to upgrade to $2 million.

Accident benefits

If you’re ever hurt in a collision, the last thing you want to worry about it is the financial cost. Your focus should be on getting better.

We’re lucky to have universal healthcare here in Ontario, but not every medical service is covered by OHIP. For example: physiotherapy, chiropractors, and prescription medications generally aren’t covered.

Many employers offer benefits that cover these types of expenses. These need to be used up before the accident benefits you have through your insurer can be used. Of course, if you don't have benefits through your employer, it's even more important to make sure your insurance comes with the accident benefits you need to properly protect yourself and your family.

In addition to the standard accident benefits that come with every car insurance policy, you also have the option to purchase optional benefits. When buying a policy, be sure to review the optional upgrades to make sure you're getting the right protection in light of your work and family situation.

Direct Compensation - Property Damage (DCPD)

This is the part of car insurance that covers damage to your vehicle caused by a collision, to the extent that you're not responsible. It's called "Direct Compensation" because, although someone else at-fault, your insurer pays you directly.

Keep in mind that your DCPD coverage only applies if:

  • The collision happened in Ontario
  • There was at least one other vehicle involved in the collision
  • At least one of the other vehicles involved is covered be an insurer licensed in Ontario

Assuming your collision falls under your DCPD coverage, your insurance company will help cover the cost to repair or replace your car.

Of course, there are plenty of situations that won't fall under the umbrella of your DCPD coverage. This is where Collision coverage becomes so important in protecting you from out-of-pocket repair costs. But more on that further below!

Is there a better rate out there?

Did you know that two drivers of the same gender, at the same age, driving the same car, in the same city, with the same driving record can pay two different car insurance rates?

Insurance companies weigh certain factors differently when deciding on prices. For example, they may have varying outlooks on the probability of a Honda Accord getting into a collision, or how fast people in their 20s tend to drive at night.

This is why your price from insurer to the next likely won’t be the same. Onlia, for example, places a lot of importance on safe driving practices and good driving records. Other insurers may place more emphasis on other factors.

In the end, your best bet is to do your research and shop around for a price that works for you. Keep these tips in mind:

  • You can compare car insurance quotes online to speed things up
  • Keep an eye out for new customer discounts: if they’re not advertised, just ask!
  • Check to see if renewal / loyalty discounts are offered for staying with a provider over time

Oh, and remember, leaving a provider before your renewal date may cost you a cancellation fee. It’s best to check on that before buying a policy. (Onlia doesn’t charge cancellation fees, but not every insurance provider does the same.)

What kind of customer service can you expect?

The service you get from an insurance company is about as important as it gets when choosing which one to go with. 

Chances are high that if you’re ever calling about a claim, you’re having a pretty bad day. Having an empathetic and helpful person to guide you through the process goes a long way.

  • Check out the website to assess how helpful it is: Take a look at the site. Does it have helpful content? Clear answers to frequently asked questions? Jargon-free explanations of their services? These are good indicators that a company cares about helping people and providing the right information.
  • Contact customer service: Speak to a support representative see how well-equipped they are to answer questions about your insurance. It'll help you suss out how responsive they’ll be when you really need them.
  • Review the 2019 JD Power Auto Insurance Satisfaction Study: This survey breaks down results by region, specifically Ontario, Alberta, the Atlantic Region, and Quebec.
  • Speak to friends and family: Car insurance is mandatory across Canada, so if you know a driver, you know someone with car insurance. Ask your friends and family for their honest take on different providers – having extra opinions will help inform your decision.

Don’t wait until you’re in a tough spot to find out what your insurer is like. Get to know them a little before making your purchase -- future you will be thankful!

What’s the absolute worst that could happen to my car?

Not that we want you to dwell on negatives, but it’s smart to consider worst-case scenarios when it comes to your vehicle to help determine your insurance needs.

Remember that a bare-minimum, standard auto insurance policy doesn’t cover vehicle damage to the extent that you're at-fault. It also doesn’t cover you if your vehicle is stolen, damaged by weather, or falls victim to many other unfortunate events that you can't see coming.

Repairing or replacing your car is expensive, and in a worst-case scenario where your car is totaled, footing the bill on your own can be a serious blow to the finances. This is where Comprehensive and Collision insurance comes in -- it helps cover damage to your vehicle so that you won't have to.

Comprehensive coverage

Comprehensive insurance coverage pays for these kinds of things:

  • Vehicle damage caused by fire, hail, windstorms, rising water / flooding, etc. 
  • Vehicle damage due to vandalism or rioting
  • Theft of your vehicle

Collision coverage

Collision insurance covers your vehicle if you collide into another object, including a car or someone else's property. In cases where your DCPD coverage doesn't cover your vehicle damage, you'll be glad you have collision coverage.

Both collision and comprehensive coverages are strongly recommended to keep yourself as protected as possible. There are some cases where these coverages may not be worth the investment – like if you have an older car that isn’t worth covering – but generally, they're good to have in your policy.

Do you want a lower deductible, or lower monthly bill?

Your deductible is the amount you pay on the cost of an auto claim, while your insurance company covers the rest.

Choosing a high deductible can reduce your monthly premium, but you'll have to pay more up front if you make a claim where a deductible applies. For people who want more coverage, but want to avoid steep premiums, this trade-off presents options. But keep in mind that if you choose a high-deductible as a way of saving month-to-month, it’s important to build up an emergency fund so that you can afford the deductible if you ever need to pay it.

Think about how much of a deductible you would comfortably be able to afford, and choose accordingly.

Choose a policy that meets your needs and has your back

Shopping for car insurance can be easier than you might think. Take a strategic approach and ask the right questions to make sure you get the right coverage with a provider you're happy with. 

In doing so, you'll drive away with an insurance policy that has your back – without breaking the bank.


Drive safe!

-Team Onlia