Romanov Report 34 - Mar 2, 2006

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Your Insurance Policy

Here's what you're insurance policy covers that's Mandatory, Optional, and stuff you will want to ask your insurance rep about.

Mandatory Liability Insurance

The normal limit is $1 million, you can lower you insurance rate and select $500,000. Or there is a $2 million option too. The mandatory minimum in Ontario is $200, 000.

Liability insurance provides protection for you if someone else is injured or killed or if their property is damaged as a result of an auto accident.

Your Policy Automatically Covers You For:

Accident Benefits, Uninsured Automobile and Direct Compensation Property Damage. These and liability are the only coverages required by law.

Accident Benefits:

Provides protection to those injured or killed as a result of a motor vehicle accident. It provides income replacement, caregiver benefits (if you normally look after another person and cannot continue to do so), benefits for medical expenses, rehabilitation, pays the cost of someone to look after you if needed, pays a death benefit for those who are killed and also a funeral expense. You can accept the standard limits for these coverages or you can purchase increased limits of protection.

Uninsured Automobile:

Provides coverage for bodily injury or death if you are hit by an uninsured or unidentified automobile. It also covers you for damage to, loss of use and contents coverage if you are hit by an identified, but uninsured automobile.

Direct Compensation Property Damage:

Covers the cost of repairs to your car after an accident where you were not at fault. There is usually no deductible, although you can select a deductible to reduce your rate. If you were partially at fault, you may be covered by both your collision and your direct compensation property damage coverage.


If you're trying to save money, here's the stuff you can cut.

Collision Coverage

The normal deductible is $500, or there is a $1,000 option which is becoming very popular too, for lowering your cost of insurance. You can check it out on by choosing different deductibles and seeing what rate fits your budget best.

Collision covers repairs to your auto after a collision with another object. The other object can be another vehicle, the surface of the ground (those potholes) or any object in or on the ground, like a guardrail. If your vehicle tips over, that's covered too.

Comprehensive Coverage

The normal deductible is $500. Some policies still have a $300, but that is being slowly phased out. There is a $1,000 option which is becoming very popular too, for lowering your cost of insurance.

Comprehensive pays for damage other than those covered by collision or upset including:

fire; theft or attempted theft; lightning, windstorm, hail, rising water; earthquake; explosion; riot or civil disturbance; falling or forced landing of aircraft or parts of aircraft; stranding, sinking, burning, derailment or collision of any kind of transport upon which the auto is being carried on land or water, falling or flying objects (usually windshield damage here), missiles and vandalism.

Ask About Accident Benefits :

Your policy automatically covers you for a percentage of your income, up to a maximum $400 income replacement per week. This may be too low if your weekly income is greater and you don't have coverage elsewhere. You can purchase increased limits.

Loss of Use:

This pays for replacement transportation (usually a rental car) while yours is laid up because of a covered loss. You can often choose from several limits, with slight price differences. It only costs around $20 a year, and is well worth it.

Waiver of Depreciation:

If you buy or lease your car new, you can choose this coverage to be sure that depreciation is not considered in an accident or theft. There is a time limit on this, usually 24 months from the date you take possession of the car.

A Rental Car Endorsement:

This is a great deal, for around $30 you can get insurance coverage when ever you rent a car. And it's better coverage too. Most rental car companies, or credit card cover, offer very limited coverage. For example they may cover you if someone hits you, but NOT if you hit someone. Your car insurance policy, hands down, provides you with the best protection.

Claims Protection Coverage:

If your insurance company offers and you qualify for claims protection coverage, get it. It will ensure if you have an at-fault accident your rate will not increase, although it will still show on your record. Don't be fooled by the terminology "Accident Forgiveness" which does NOT protect your rate from increasing.