Auto Insurance

Whether you are transferring your insurance from another province, seeking to change insurers or owning a car for the first time, the process of getting an insurance quote can be daunting. In general, the more the insurer knows about you and your driving record, the better off you will be, even if your record is less than perfect. Full disclosure at the beginning will save any risk of misrepresentation if you do need to make a claim in the future.

This is an area where your broker can be of particular assistance in helping you to navigate the terrain. There are three main categories of information required:

1. Information about you
   • Names of the drivers of the vehicle to be insured. This usually includes all licensed members of your household since it is assumed they will use the car. Provide their names as shown on their license, the number of years licensed and the percentage of time they will use the vehicle.
   • Driving records of all applicants will be screened to identify applicants with undesirable driving records. This will include driving convictions in the last three years and accident claims in the last six years.
   • Insurance history for the preceding three to six years must be provided, including any cancelled, declined or refused insurance.
   • License history of all listed drivers must be provided for the preceding six years, including suspensions, cancellations or lapses.
   • In provinces that have public insurance, all required information is already captured by the government.
2. Information about the vehicle
   Full information about the make, model and year are required as well as the Vehicle Identification Number or VIN. Also, include the details of a lease if you have one, the purchase value, whether new or used, and the value of any modifications to the vehicle. Include vehicle ownership. If any other party has a financial interest in the vehicle, this should be recorded so they are protected in the event of a loss.
3. Information about your coverage requirements
   Finally, you will need to provide information of how the vehicle will be used. Is it for pleasure or business? If it is for commuting, what is the daily estimated distance? What will the annual distance be? If for business use, will you be carrying paying passengers, renting the car out to others or transporting any goods? You will also need to indicate your choices regarding your coverage, for example, your preferred deductible, liability limit and coverage for any special situations, including storing the car or driving in the U.S.

What is liability insurance?
Liability insurance covers the cost of damages (for accident benefits, medical costs, lawsuits and awards) in the event of personal injury or death from an accident involving the insured party. In other words, you are financially protected if you are held liable for an injury or loss by others arising from the operation of your vehicle.

What is no-fault insurance?
Many provinces in Canada now have some level of no-fault insurance in which each person's own insurance company pays for injury or damage up to a certain limit. This applies regardless of whether or not the insured person was at fault. In Quebec and Manitoba, for example, there is a pure no-fault. In Ontario, however, there is a threshold system in which the no-fault clause only applies up to a certain threshold of liability. So, if you are involved in an accident and injured, your own insurance covers the associated costs of treatment, living expenses, loss of work and pain and suffering. This means injuries that are not "serious and permanent" are covered by your own insurance. Your insurance also covers the associated costs of treatment, living expenses, loss of work and dependent care.

When to consider extra coverage
The recommended level of liability insurance coverage is usually about $1 million. There are some situations in which you might want to increase your liability limit depending on the use of your vehicle. For example, if you drive into the U.S. on a regular basis, where liability settlements are generally higher than in Canada, you might want to consider higher coverage. If you carpool to work or drive groups of children in your car to school or after-school events, you might want to increase your coverage to reflect the higher risks to which you are exposed.

Umbrella Liability Policy
You can purchase an Umbrella Liability Policy that provides additional liability coverage to your home and car insurance. For example, if you have $1 million on your home and $1 million on your car, but don't feel it is sufficient, instead of adding $1 million to each, you can buy an Umbrella Liability Policy for an additional million that covers both.

Ask us for more information about liability insurance and how to obtain the right level of coverage.

Every policy is different, but there are some common situations to be aware of.

Your vehicle insurance policy likely has some flexibility built in to ensure you are covered in different situations. You should check your policy or ask your broker to be sure.

Renting a car
If you drive a rented car or any vehicle that is not owned by you, your existing policy automatically extends accident benefits and third party liability coverage to your rented car. These limits are the same as those on your own car. You can purchase additional coverage by way of an annual endorsement to your own policy that provides physical damage insurance for any rented vehicle during the policy term. It is important to note that this endorsement usually has a limit of $50,000. So, if you rent a luxury car, you should be aware that the cost of repairs are limited. This endorsement is simple to arrange and far more economical than the costly damage waivers offered by the rental companies.

Traveling outside the province or country
Your insurance will apply if you take your car on short trips to other provinces or into the continental U.S., as long as you engage in normal use of the vehicle.

Moving to another province
If you are relocating long-term or permanently, you must inform your insurer and arrange for new coverage that reflects the risks in your new location.

When the car is "in the shop"
Under most insurance policies, you are not entitled to a replacement vehicle while your car is in the shop for normal maintenance or repair. If you lose the use of your car because of an accident, then you might be entitled to a loaned vehicle depending on the situation.

When driving someone else's car
If you borrow someone else's car, you are covered by the insurance on that car. However, if you are involved in an accident, the owner's record, not yours, will be affected.

When someone else drives your car
Remember that when someone else is driving your car, you are still responsible for it. Any at-fault accidents or claims will go onto your driving record and affect your future premiums.

Don't guess ...
If you are not sure about your coverage, it's better to give your broker a quick call than to guess. Remember, if you're not covered and an accident occurs, the insurer is not obliged to pay.

Ask us for more information about liability and how to obtain the right level of coverage.

Understanding Your Auto Insurance Policy

There are many important elements to an Auto Insurance Policy that you should be aware of when making decisions in regards to your Policy. This breakdown explains the statutory and optional benefits available with any Auto Insurance Policy as well as answers important questions in regards to claims and payouts.

Standard Auto Insurance Policy

All auto insurance policies include the following coverages: 

• Third Party Liability
• Uninsured Automobile
• Direct Compensation-Property Damage
• Accident Benefits

Statutory Accident Benefits

Whether you are buying a new policy or renewing an existing one, you should be aware of statutory accident benefits:

Some important things to remember about these benefits:

Medical, Rehabilitation and Attendant Care benefits for minor injuries are fixed at a maximum limit of $3,500.

The optional benefits available for Medical, Rehabilitation and Attendant Care.

The chart below illustrates the overall benefit limits available depending on which optional benefit or combination of optional benefits you purchase, if any:

*$130,000 optional combined (non-catastrophic injuries) and $1 million optional (all injuries) cannot be purchased together. ** Duration of benefit is five (5) years for adults.

Other Optional Benefits

What else is there to know? 

Minor Accident
Insurers can not use a minor at-fault accident that meets certain criteria in order to increase your premiums. This criteria includes: No payment has been made by any insurer, that there are no injuries, and that damages to each car and property were less than $2,000 per car and were paid by the at-fault driver. This provision is limited to one minor accident every three years.

Interest Rate for Monthly Payment Plans
The maximum interest rate that insurers can charge if you make monthly premium payments is 1.3% for one year policies, with corresponding reductions for shorter terms.

Comprehensive Deductible
The standard deductible for Comprehensive coverage is $500. 

Non-Earner benefit
The six-month waiting period for people who are not working to receive benefits is four weeks. Conversely, benefits can be received for up to two years after the accident.

Duration of Medical, Rehabilitation and Attendant Care benefits
For all claimants except children, the amount of time that you can receive this standard benefit is five years for non-catastrophic injuries, and it will be paid only as long as you remain medically eligible.

For more information, please visit http://www.fsco.gov.on.ca