We understand that navigating car insurance can be confusing, especially when dealing with unfamiliar terms. In this blog post, we’ll explain some of the most common terms you might come across when shopping for car insurance in Ontario.
Premium:
This is the amount of money you pay for your car insurance policy. Your premium will be based on factors such as your driving history, the make and model of your car, and your location. Insurance companies in Ontario use a government-approved formula to calculate premiums.
Deductible:
The amount of money you need to pay out-of-pocket before your insurance kicks in. For example, if you have a $500 deductible and you get into an accident that causes $2,000 worth of damage, you’ll need to pay the first $500 and your insurance will cover the remaining $1,500. The deductible you choose can affect your premium, so it’s important to consider your budget when selecting a deductible.
Liability Coverage:
This is the most basic type of car insurance and is required by law in Ontario. It covers damages you may cause to other people or their property while driving. It is usually broken down into two parts: bodily injury liability and property damage liability.
Accident Benefits Coverage:
This type of coverage is mandatory in Ontario and covers medical and rehabilitation expenses, as well as some income replacement benefits, in case of an accident regardless of who is at fault.
Uninsured Automobile Coverage:
This coverage is also mandatory in Ontario, it covers damages to your own car and injuries sustained by you or your passengers in an accident caused by an uninsured driver or a hit-and-run driver.
Direct Compensation-Property Damage (DC-PD) Coverage:
This coverage is a mandatory component of automobile insurance in Ontario, it covers damages to your own car in an accident caused by another driver who is at fault and is not insured or inadequately insured.
Collision Coverage:
This type of insurance is optional and covers damages to your car from an accident, regardless of who is at fault if you choose to add it to your policy. It is usually recommended for newer or high-value cars.
It’s important to note that every province has its own set of insurance rules, coverage availability, and requirements. As your insurance broker, we’re here to help you understand the specific laws and regulations of car insurance and find the best policy for your needs. And we will always be available to assist you in case of any queries or concerns regarding your policy.