January 31, 2019
What You Should Know About Car Insurance
Accidents happen, even for the most experienced driver. As these situations are never anticipated, it pays to be protected by insurance. Canada requires all drivers of motor vehicles to be covered; the law specifies both a legal minimum accident benefits coverage and third-party liabilities, but you can purchase optional coverages beyond those prescribed.
The Financial Services Commission of Ontario (FSCO) requires that all drivers have:
- Third party liability insurance: The law requires you to purchase at least $200,000 in third party liability insurance to protect yourself if you are ever involved in an accident that damages your vehicle or harms another person.
- Uninsured automobile insurance: Not all drivers comply with the law requiring mandatory car insurance. If you have been involved in an accident with someone who is uninsured, your uninsured automobile coverage will take care of the claims.
- Statutory accident benefits insurance: Statutory accident benefits coverage pays certain benefits if you’re ever hurt in an accident, regardless of who is at fault. These benefits include income replacement, rehabilitation, attendant care, and supplementary medical care.
- Direct compensation-property damage (DCPD) insurance: DCPD insurance covers damage to your vehicle and provides you compensation direcltly from your own insurer if another party’s negligence caused damage to your car. It means you deal with your own insurance company, and do not have to wait on the other driver’s insurance company to make a decision. You do not have to sue the other driver for the property damage.
What is a No-Fault System?
No fault insurance began in ontario in 1989. The term “no-fault” may be misleading; it does not equate simply to no one being held responsible for an accident. Instead, it means that regardless of who is at fault for the accident, you will be dealing with your own car insurance company.
Traditionally, an at-fault driver’s insurance company pays the claims of all parties involved in the incident. In a no-fault insurance system, it doesn’t matter who played a bigger hand in causing the accident; each party’s insurance company pays out the respective policyholder’s claims for certain medical bills, income replacement and other benefits . (The driver who is determined to be at fault may face an increase in their premiums, however.)
Ontario is a no-fault province; the system ensures that claims are paid quickly—without having to wait for the results of an investigation.
Ability to sue
Although you will deal with your own insurance company to get your vehicle repaired and collect your accident benefits which include medical benefits and income replacement benefits, you can still sue the at-fault driver for your pain and suffering and damages not covered by your accident benefits. This is called a tort claim.
Ontario’s Private Insurance System
Ontario’s private insurance system is very different from those of other Canadian provinces. Ours gives you the freedom to shop for a policy among numerous insurance companies. It allows you to compare rates so you can determine which deal best suits your needs.
Buying Your Insurance Policy
Insurance policies can be purchased from agents, brokers, or directly from insurance companies themselves. When choosing an option, here are five important factors to consider:
- Licensing: In Ontario, insurance policies can only be sold by a licensed insurance company, broker, or agent. Check the Registered Insurance Brokers of Ontario website to determine if the person you are dealing with is licensed to sell insurance policies.
- Accident Forgiveness and Claims: Research the insurance company’s reputation when it comes to paying out claims and whether there are provisions on accident forgiveness.
- Rates: Rates vary greatly from one company to another and can depend on several factors (like your age, driving record, and the type of coverage you want).
- Service: While price is usually one of the first factors to consider when purchasing a policy, cheapest isn’t always best. Consider the company’s reputation when it comes to customer service and dealing with their clients.
- Coverage: Most basic insurance policies are standardized to comply with the mandatory laws of a municipality. However, you may need certain coverages that are not offered by some companies, or you may need more than the mandatory minimums in the event of an accident. For example, third party liability of $200,000 may not be enough to pay another person’s damages if you are found at fault in an accident, or accident benefits which include an income replacement benefit of $400 per week may not ben enough for you if you are rendered unable to work.
Why Ontario Drivers Pay More in Insurance than in Other Provinces
If you’ve lived in another province, you may have noticed that car insurance policies are more expensive for Ontarians than for drivers in other parts of Canada. This may be due to Ontario’s no-fault system, the high cost of living, and on the growing insurance fraud problem.
How to Lower Your Rate
For some people, paying for car insurance can be a high-priced headache. If you want to decrease your premium, here are some tips that are known to affect rates:
Keep your driving record clean:
Driving safely and obeying traffic rules is a good way to keep your rates down. Insurance companies look for a clean driving record that is free of accidents or convictions. Being involved in a previous at-fault car accident can increase your premium.
Review your coverage:
Take a look at your current coverage limits and deductibles, as some may be unnecessary. Consider paying a higher deductible to lower your monthly premium. Also, compare the value of your vehicle to the amount you insured it for and decide if it’s worth it. You may also wish to purchase additional coverages for accident benefits, or increase your third party liablity limits if the coverage you currently have is not enough.
Consider the “Porsche factor:”
Brand new or more expensive cars may cause your rate to skyrocket. If you are concerned with your premium, choose a car that has a low theft rate and is not too costly to repair.
Installing an anti-theft device can also affect your insurance rate; inquire with the agency to see if they approve of your anti-theft device.
Choose who gets to drive your car:
Allowing high-risk drivers (like newly licensed teenagers) to get behind the wheel can increase your rate. Insurance companies will often give you the option of whether or not you want them excluded from your policy.
Filing an Insurance Claim
If you are involved in a motor vehicle accident, report it to your insurance company as soon as possible to avoid delays in potential compensation. Collect the following information before calling your insurance provider:
- Name of the other party’s insurance company and their policy number.
- Details about the vehicle (model, make, year, registration, and licence plate number).
- Detailed information regarding the accident, including:
- Your description of what happened.
- The date, time, and location.
- Damages and injuries sustained.
- Name and badge number of the investigating police officer (if the accident was reported to the authorities).
Once you report the claim, a claims adjuster will contact you. Sometimes they will talk to you over the phone; in other cases, they might want to talk to you in person. The adjuster will determine the extent to which your claim is covered and how much you will be compensated.
The claims process may seem a bit overwhelming and you might get compensated less than you feel you deserve. If the adjuster offers a low or unfair offer, you can contest it and negotiate with the insurance company. To maximize the compensation you receive, enlist the help of a good lawyer.
If you are in need of an automobile accident lawyer in Toronto or the GTA, Michelle Linka Law is at your service. Our team specializes in cases involving motor vehicle accidents, personal injury, accident benefit claims, and pedestrian accidents. Call us at 416-477-7288 to make an appointment.
This blog is intended for information use only and does not constitute legal advice or the opinions of an Ontario personal injury lawyer. You should not act on information contained in this blog. If you have a legal issue or legal question, you should seek advice from an Ontario lawyer.