In the province of Ontario, automobile insurance is compulsory and required by law. This means that before you can obtain licence plates for your car or renew your vehicle registration, you need to purchase auto insurance.
Unfortunately, there have been some cases of drivers operating their vehicles without insurance which endangers everyone on the road. To protect all drivers and help to keep our roads safe, the Ontario government and the Canadian insurance industry have introduced the Uninsured Vehicles Project.
As of November 2010, a new electronic verification system is being implemented that will provide immediate confirmation of valid insurance coverage to be used during the licence plate renewal process. Currently drivers are required to provide proof of insurance coverage when renewing their plates, but until now there has been no way to validate it.
If there is an issue with the insurance on a vehicle, the owner will be notified in writing approximately four months before the licence plate expiration date to give them sufficient time to update their insurance information.
Penalties for driving without insurance
When driving your own car or a vehicle belonging to someone else, you are required to have the pink liability insurance card for that vehicle. If you are stopped by a police officer, you must show this insurance card upon request. Failing to do so can result in a fine of up to $400.
It is an offence to operate a vehicle without insurance. On first conviction you could receive a fine ranging from $5,000 to $25,000. A second and any subsequent convictions could land you a fine of $10,000 to $50,000.
Minimum mandatory insurance coverage in Ontario
To drive in Ontario you are required to have the following minimum insurance coverage on your vehicle:
Liability- protects you if someone is killed or injured or their property is damaged due to your negligence while operating your vehicle.
Accident Benefits- provides benefits if you are injured or killed in an automobile accident in Canada or the United States.
Uninsured Motorists - protects you if you are injured or killed by an uninsured motorist or hit-and-run driver if you were not at fault, and covers damage to your vehicle caused by an uninsured motorist.
Direct Compensation – Property Damage- covers you for damage to your vehicle and its contents caused by someone else.
Optional insurance coverage
The following auto insurance coverage is not required by law. If you owe money on your vehicle, the lien holder-the person or company to whom you are making payments-may require you to have Collision and Comprehensive coverage to protect the vehicle.
Collision - pays for damage to your vehicle if you are at-fault in an accident, or for damage caused by an unidentified vehicle or object such as fire, theft or vandalism.
Comprehensive- pays for all insured damage to your vehicle other than collision damage.
All Perils- combining collision and comprehensive coverage, it is the broadest coverage available as it includes all types of coverage unless specifically excluded.
Specified Perils - pays only for losses caused by perils specifically listed in the policy, primarily fire and theft.
To shop around and find the insurance coverage that is best for you, go online to compare quotes on sites like InsuranceHotline.com or contact an insurance professional for more information.