Ontario Car Insurance

How Does Car Insurance Work in Ontario?

Once you choose the right type of car insurance coverage and deductible amount with the insurance company, you pay for the insurance premium. The coverage will protect you against bodily injury or physical damages that occur after a car accident. The coverage covers liability costs in case a driver injures someone else or damages their property in a car accident. With enhanced coverage options, you can add extra protection too.

Car Insurance Eligibility and Restrictions

To be eligible for car insurance, the driver must have a valid driver’s license. The insurance company will check your previous driving records to determine if you qualify and the rates. Some past violations may arise, which might affect your eligibility; this will vary depending on the duration and nature of your violations. Other insurance conditions may occur depending on the car type, its usage, and any customization made to the car. For example, if the vehicle is modified to increase its performance or appearance, most insurers will require to examine the vehicle before they insure the car if you have plans to customize the vehicle, call the insurance company first. The company will let you know if the modification changes will affect your policy and premiums.

Car Insurance cost in Ontario

The annual average car insurance cost is $1,505. Nowadays, Ontario no longer has the most expensive car insurance in Canada; however, drivers still get higher insurance rates than other areas in Canada.

Car Insurance System in Ontario

Ontario has a no-fault insurance system. The insurance company pays for the damages caused by a driver, and the other insurance company pays for their driver. The advantage of a no-fault system is that it allows the injured person to access financial compensation easily. The driver is responsible for the injuries and damages they cause in the at-fault system. The insurance companies will examine the accident and figure out who is at fault before issuing compensation. At the no-fault system, the injured party doesn’t have to wait to be paid the settlement. No-fault doesn’t mean that the driver will not receive penalties after the collision; they can still be convicted in the court of law under the Criminal Code and the Highway Traffic Act. The injured party can also sue the at-fault driver, and this can exceed your insurance limits. Most provinces in Canada operate under a no-fault system, with restrictions around the injured party’s right to sue for the damages. This means the injuries must be severe enough before filling for a lawsuit.

Factors that affect car insurance rates:

Type of Car
The model, make, and the year of the car affects your premiums. New, sports, and luxury cars have higher insurance premiums due to the higher cost of repair and replacing parts.

• Car Usage
The commute time can affect the premium rates.

Driving Records
Driving violations, accidents, or convictions can increase premium rates.

• Area Code
Where you live can affect your rates. Drivers in the city pay higher rates than rural ones due to the high number of claims.