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Frequently Asked Questions About Ontario Car Insurance

Here are some common questions we get about car insurance in Ontario. Feel free to contact one of our insurance brokers with any questions you have about car insurance coverage and rules in Ontario.

What is Collision Coverage?
What is Liability - Third Party Coverage?
What is Comprehensive Coverage?
What is an At-Fault Accident?
If I let my friend drive my car, will he or she be covered?
Does where I live affect my auto insurance premium?
What type of insurance do I need if my vehicle is being financed or leased?
Why am I considered high-risk?
What is Pleasure use or Work Commute?
What is a Lapse in Insurance?
What is Graduated Licensing?
Driving experience outside of Canada & USA
How do I report a claim?
What is a deductible?
The cost of my insurance seems to keep rising. Is there anything I can do to lower my annual premium?
Will my auto insurance be cheaper if I register the vehicle in someone else's name?
Do I need to add my son or daughter when they get their license?
How long do tickets and/or accidents stay on my driving record?


What is Collision Coverage?
Having collision coverage on your car will cover any accidental losses or the cost of fixing your car in the case of an at-fault accident. The minimum deductible is usually set at $500. The deductible is the amount indicated on your policy that needs to be paid towards repair costs or loss is deducted from settlement amount. Keep in mind that the higher the deductible the lower your premium.
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What is Liability - Third Party Coverage?
Third party Liability coverage is the mandatory minimum coverage you are able to hold in Ontario. Liability Coverage describes the amount of coverage you have when you cause injury to another person, or damage to someone else's property. Most consumers carry a minimum of $1,000,000 however $2,000,000 is not uncommon. The minimum required coverage is $200,000 although most companies require a minimum $1,000,000.
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What is Comprehensive Coverage?
Having comprehensive coverage on your vehicle will cover the accidental loss or cost of repairs for damages cased by; fire, theft, vandalism, lightning, windstorm, hail, rising water, earthquake, explosion, riots or civil disturbance and falling or flying objects
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What is an At-Fault Accident?
If you are involved in a car accident, your insurance company is required to assign the percentage of fault for both parties involved. Insurance companies are required to assign the percentage of blame or fault for the all the drivers involved in an accident. Insurance companies determine this based on the "Fault Determination Rules" located within the Insurance Act. Please note that you could be considered At-Fault even if you are considered Not-At-Fault by the police.
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If I let my friend drive my car, will he or she be covered?
If you lend your car, you are also lending out your insurance. If anything happens, your friend will be covered under your auto insurance policy as long as he or she has a valid driver's license and meets the other conditions of your policy.
If your friend is involved in an at-fault accident while driving your car, it could affect your premium. If you lend your car to someone, remember that your auto insurance coverage may not apply if he or she does not have a valid driver's license.
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Does where I live affect my auto insurance premium?
Where you live is one factor that affects the cost of your auto insurance premium. Drivers who live in a city generally pay higher auto insurance premiums than those who live in the suburbs, reason being more traffic on the roads increases the risk of accidents. The vehicle you drive and your driving record is another factor to your insurance premium.
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What type of insurance do I need if my vehicle is being financed or leased?
If you recently purchased a vehicle that is either being financed or leased, then you may be required to carry full coverage on this vehicle as you do not completely own this vehicle at this time. This would need to consist of collision and comprehensive coverage's, with a minimum deductible set to $500 in most cases.
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Why am I considered high-risk?
Most insurance companies have a limit on how many moving violations and claims you can have before you no longer qualify with them. Tickets stay on your record for a total of 3 years and for At Fault accidents, most insurance companies go back 6 years and some look as far back as 10 years. They best advice we can give to our clients is try your best to keep a clean driving record in order to get the best possible premiums and discounts.
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What is Pleasure use or Work Commute?
Pleasure use is when you are not using the vehicle to commute to and from work. Work Commute is when you use your vehicle to commute to and from work on a daily basis. If you are not commuting to work, this will usually lower your insurance premium.
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What is a Lapse in Insurance?
A lapse in insurance is gap where a driver didn't hold insurance during this time. There are many types of lapses which may affect your premium that include; but are not limited to:

  • Lapse due to cancellation for non-payment of premium
  • Lapse due to driver's license suspension
  • Lapse due to policy being cancelled for misrepresentation or non-disclosure
  • Lapse due to not owning a vehicle or being out of country for an extended period
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What is Graduated Licensing?
Graduated Licensing is a program for all new drivers who must meet specific requirements/restrictions before they can obtain an Ontario driver's license. A driver is considered a fully licensed driver once they have completed all three stages of the program; G-1, G-2 and G license. The purpose is to allow new drivers to gain real hands-on driving experience.

With a "G-1" you will be able to drive while under supervision of an accompanied "G" class driver with a minimum of 4 years' experience and restricts the "G1" operator to all 400-series highways, driving between the hours of midnight - 5:00am and a blood alcohol level of "zero" percent. The accompanying "G" class passenger must also have a blood alcohol level below 0.05% – in case the "G1" driver needs to be relieved.

After successfully completing a certified driver's training course (which in most cases will lower your insurance rates) you are able to obtain your "G2" license as soon as 8 months. If you chose not to complete this drivers training course, then you would have to wait a minimum of 12 months. With a "G2" you are able to drive on any 400-series highways at any time, with the only restriction of having a "zero" blood alcohol level.

The wait period from "G2" to "G" is set to a minimum of 1 year. Once you have obtained a "G" class the only restriction is having less than 0.05% blood alcohol level while behind the wheel.
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Driving experience outside of Canada & USA
Driving experience outside of North America is not recognized by most insurance companies. If you happen to have a license outside of Canada & USA, most of the major insurance companies will consider you to be a new driver until driving experience is gained in within Canada.
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How do I report a claim?
You can report an auto claim by calling the claims number listed on your insurance "pink slip" or by calling us during regular business hours.
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What is a deductible?
A deductible is the amount you have agreed to pay in the event of a loss. Your policy premium is calculated based on the amount of your deductible.
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The cost of my insurance seems to keep rising. Is there anything I can do to lower my annual premium?
Yes, increasing your deductibles will reduce your overall annual premium. As well as removing collision and/or comprehensive on a vehicle that you own is also another option only if the vehicle is not being leased or financed.
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Will my auto insurance be cheaper if I register the vehicle in someone else's name?
No, the insurance company is more concerned in who will actually be driving the vehicle, rather than who's name the vehicle is registered in.
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Do I need to add my son or daughter when they get their license?
Yes, only when they have successfully completed the graduate licensing program from "G-1" to "G-2". Please contact your broker once they have been awarded with a "G-2" license to have them added as a listed driver on your insurance policy.
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How long do tickets and/or accidents stay on my driving record?
In Ontario, any moving violation will stay on your driving record for a period of three years from the conviction date not the offence date. In respect to at-fault accidents, they will stay on your driving record for a total of six years.
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