If you are new to Ontario, it’s important to understand how the insurance system in the province works. Especially if you are from a province that does not use a no-fault system, you might find things a little confusing. Fortunately, the insurance system in Ontario is quite straightforward once you understand how it all works. Get to know the basics about your new province and its auto insurance industry, and shopping for auto insurance will be much easier.
Auto Insurance Basics
As in all Canadian provinces, all drivers are required by law to carry a certain legal minimum in third-party liability coverage and accident benefits coverage. Above and beyond this required legal coverage, you can add a wide variety of optional coverages including comprehensive and collision. This is similar to other Canadian provinces, but there are some differences you should know about, especially those brought about by the 2010 auto insurance reform in the province.
The reform was intended to keep rates more stable and to allow drivers to customize their policies. You can choose from a standard coverage level, which is the legal minimum, or an upgraded coverage level. It also made some changes to how an at-fault accident affects car insurance rates. If you are found less than 25% at fault in an accident, it will not affect your premiums.
How No-Fault Insurance Works
Ontario is a no-fault insurance province. While this sounds to most people like it means no one will be found at fault in the event of an accident, it in fact means something very different. Whenever there is an auto accident there will be a determination of fault. In a no-fault system what differs is how the claim will be paid out.
In a traditional system, the insurance company of the driver who is found at fault will pay out on claims for both their own insured party and for the other party as well. Because their insured has been found to be at fault, that driver’s liability coverage kicks in to pay the claim. In a no-fault insurance system however, it does not matter who is found at fault – your own insurance company will pay your claim and the other driver’s insurance company will pay theirs.
If you are found at fault in an accident, you will still face an increase in your insurance premiums as a result. Ontario’s no fault system makes certain that claims are paid out quickly and without waiting for fault determination, allowing everyone to get straight to repairs on their vehicles.
Ontario’s Fault Determination Rules
In Ontario, a set of fault determination rules make the process of determining which driver is at fault in an accident simple and straightforward. These rules have been created in order to reduce the time involved in determining who is at fault and to prevent disagreements among insurance companies and drivers which can slow down the process.
The fault determination rules are applied to accidents in Ontario regardless of weather or road conditions, for which drivers are expected to adjust their driving to avoid accidents. This makes fault determination straightforward in most cases.
Fault can be assigned anywhere between 0 to 100% fault, so that fault can in fact be shared in a accident and in some cases shared equally. It is possible to appeal a fault determination, but the rules make these cases fewer.
The Private Insurance System
If you are coming from one of the provinces that use a public insurance system, you will find the private insurance system in Ontario very different. You are free to shop around for car insurance rates from a large number of insurance companies. Although there is a minimum requirement for your coverage set out by the government, beyond that you can pick and choose which options you want to add and how much you want to increase your coverage above the legal minimum.
A private insurance system means that you can shop around and compare rates to find the best deal on your policy. When you first arrive in Ontario, it’s good idea to obtain a variety of quotes so that you can get an idea of what the range of premium costs is across various insurance companies. Because insurance companies can determine their own rates, the difference from one company to another can often be a big one, which means you could be saving a lot of money if you take the time to shop around.
Ontario’s insurance system is designed to ensure that everyone has the coverage they need and that rates can remain affordable and competitive. New Ontario residents shopping around for car insurance sill quickly find that their options are many and varied, making it possible to find just the right policy at the right price.
