Car Insurance Coverages

What’s Covered by Ontario Auto Insurance?

Many people have questions about what is covered by an auto insurance policy in Ontario, the good news is this is all easily customizable. Standard coverages that must be included are third party liability, accident benefits, direct compensation property damage and uninsured automobile coverage. You can or may be required to add collision and comprehensive coverage by a financial lender or leasing company or for your own piece of mind. I will breakdown each of the coverages below to help you better understand the value. 

Third Party Liability Coverage :

This portion of the Ontario vehicle insurance policy protects you if someone is killed or injured, or their property is damaged. liability coverage pays for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. By law you must carry a minimum of $200,000 of liability coverage. For clients at CIBI we always recommend $2 million liability, the reason for this is simple, we are seeing a huge surge in liability claims in Ontario. With the rise of Diamond and diamond style lawyers who work upfront for no fee the frequency of liability claims has never been higher. Additionally, claimants are asking for higher amounts across the board. The increase in cost from minimum liability to 1 or 2 million can be very minimal cost wise. Make sure to chat with your agent or broker about the options for higher liability limits. 

Statutory Accident Benefit Coverage : 

Accident benefit coverage is mandatory in Ontario and should be discussed with your broker or agent to determine if increasing the standard limits makes sense. These benefits provide things like  supplementary medical (as we know not everything is covered by OHIP), rehabilitation and attendant care, caregiver, non-earner, dependent care and income replacement benefits.

Direct Compensation – Property Damage (DCPD) :

DCPD coverage is there for damage to your vehicle and for providing coverage if you have lost the use of your vehicle, it is critical to note this coverage enacts if another person was at fault for the accident. With “No-Fault Insurance in Ontario, it is referred to as direct compensation as even though someone else causes the damage, you would collect directly from your own insurer. The term No-Fault means in short you would always go to your own insurance company to settle a claim as oppose to dealing with the other parties carrier.

Crucial to Note: Direct Compensation is a mandatory coverage section of your automobile insurance policy and only applies if the following conditions are met:


  • the accident happened in Ontario;
  • another vehicle was also involved(can not be single vehicle incident) and;
  •  The other party (driver of the other vehicle) is also insured by an Ontario Insurance carrier 

If one or more of these items are not met, then you would need to pursue coverage through the optional collision coverage (if you have it). 

Collision Coverage :

Collision coverage comes into play when the vehicle is in motion and damage is caused, this is most often enacted when an accident happens with another party. A deductible exists on most policies for damage related to collision and should be reviewed and talked about with your broker or agent to customize. We would always recommend carrying collision coverage unless the vehicles value is below $2000 as it may not be worth paying extra for such a low value vehicle. 

Comprehensive Coverage :

Comprehensive and collision coverage together make up what most people would refer to as “full coverage” on an automobile. The comprehensive coverage is in place for damage while the car is parked such a fire, theft and vandalism. Together these can be offered as all perils coverage or individually listed on your coverage page. 

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Many additional coverages exist and can vary depending on the insurance provider. We work with 10+ insurance companies and can help you tailor a solution that provides the best value. Below are a few additional coverages to note:

Rental Car Package :

Referred to in insurance jargon as OPCF 20 and OPCF 27 this package we offer covers you for both the cost of the rental up to a specific limit and the insurance on the rental vehicle up to a specific limit. No need to buy additional walk away coverage or rental insurance coverage elsewhere. I typically recommend $1500-$3000 limit for the OPCF 20 as the cost of repairs is unpredictable. 

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