Ontario Auto Insurance FAQs

Tuesday May 8, 2018

Category: Insurance

What is Auto Insurance?

Ontario Auto Insurance is a financial service provided by insurance companies. Auto insurance provides financial protection to drivers in the event of a driving-related accident or theft. Individual drivers pay an annual premium to an insurance company. And, in the case of an accident or theft, the insurance provider covers most or all costs related to the incident.

How does Ontario Auto Insurance work?

Ontario Auto Insurance is a “no-fault” insurance system. The name of the system is a bit misleading because it does not mean no one is at fault in the event of an accident. A no-fault system means, in the event of an accident, each driver works with their own insurance provider to resolve any claims made in the incident.

The purpose of the no-fault system is to minimize delays in getting the affected parties the benefits or treatments they may need.

Is Auto Insurance Mandatory in Ontario?

Yes, auto insurance is mandatory in Ontario. At minimum, Ontario drivers must have $200,000 in third-party liability coverage. This coverage protects you if you are found responsible for damage to someone else’s property or injuries as a result of an incident. However, many drivers choose to purchase added coverage for protection of up to $1,000,000 or $2,000,000. At Easyway, we recommend a minimum of $1,000,000 in coverage to our clients.

What is the penalty for driving without insurance?

If you are caught driving without insurance, you can be fined $500 to $50,000. To make matters worse, if you’re in an accident, you will be responsible to pay all the costs out of your own pocket.

How much is Ontario Auto Insurance?

According to an article published by Global News in January 2018, the average Ontario driver pays an annual premium of $1,458 for car insurance. The Financial Services Commission of Ontario (FSCO) monitors the rates charged by insurance companies.

How are insurance rates determined?

Your insurance rate depends on on a variety of factors including: 

The rate you get for the same coverage may vary between insurers. Therefore, it is your right to shop around get the base rate for your coverage needs.

If I lend my car to a friend, are they insured?

Yes. When you lend your car to a friend, your insurance covers them. Therefore, if they are involved in an accident, they can make a claim against your policy. However, if you frequently lend your car to the same friend, you may need additional insurance. 

Does Ontario Auto Insurance cover me out of the province?

Most policies cover drivers when they travel outside of their province or into the US. However, you should confirm with your provider if your policy is valid while out of province. If you plan to drive in another country, check with your insurance provider to ensure your coverage applies out of province.

Is my insurance provider allowed to cancel my insurance policy?

Yes. As long as they notify you, your insurer can cancel or non-renew your policy for a variety of reasons including:

If your provider cancels or non-renews your policy, contact a high risk insurance broker.

How can I get cheap insurance rates?

To get the best insurance rates, be sure to ask if you are eligible for discounts on your policy. The FSCO recommends checking with your insurance provider for available discounts each year. According to the FSCO, insurance providers offer a range of discounts for:

In addition to taking advantage of discounts, always practice good driving habits. Risky drivers pay more for insurance than good drivers. Therefore, keeping your driving record clean ensures your premium doesn’t skyrocket.

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