Car Insurance 101

Your Auto Insurance policy allows you to choose coverage options that are right for you.

Certain coverages are mandatory, and others are optional. The coverages you choose, along with your selected deductibles will dictate your premium. Your M&R Insurance Expert would be pleased to help you make decisions that are right for you.

  • The mandatory coverage are:

    Third-Party Liability Coverage:
    This section of your automobile insurance policy protects you if someone else is killed or injured, or their property is damaged. It will pay for claims as a result of lawsuits against you up to the limit of your coverage, and will pay the costs of settling the claims. By law, you must carry a minimum of $200,000 in Third-Party Liability coverage, but options exist to increase over the minimum amount.

    Statutory Accident Benefits Coverage:

    This section of your automobile insurance policy provides you with benefits if you are injured in an automobile accident, regardless of who caused the accident. These include supplementary medical, rehabilitation and attendant care, caregiver, non-earner and income replacement benefits. Options exist to increase most of these coverages. They are discussed below under optional coverage – Accident Benefits

    Direct Compensation – Property Damage (DC-PD) Coverage:

    This section of your automobile insurance policy covers damage to your vehicle or its contents, and for loss of use of your vehicle or its contents if another person was at fault for the accident. It is called direct compensation because even though someone else causes the damage, you collect directly from your own insurer.

    Uninsured Automobile Coverage:

    Protects you and your family if you are injured or killed by a hit-and-run driver or by an uninsured motorist. It also covers damage to your vehicle caused by an identified uninsured driver.

  • Optional Coverages

    Increasing Your Liability and Accident Benefits Coverage:

    In addition to the mandatory minimum coverages that are required by law, you may purchase higher liability limits under your Third-Party Liability Coverage, along with increased Accident Benefits Coverages. You have choices and flexibility over optional or increased coverages and the price you pay for auto insurance. These options allow you to customize your policy to better suit your needs.

    Your M&R Expert will be able to help you decide what level of coverage is best for you.

    Increased Third Party Liability Coverage:

    While you are legally required to carry a minimum of $200,000, you may want to increase this coverage. The cost to increase your Third-Party Liability coverage to limits of $500,000, $1 million or $2 million is often quite reasonable.

  • Optional Accident Benefits Coverages:

    If you, or anyone insured under your policy are injured in a car accident, this is the section of the policy that pays the reasonable and necessary expenses required in order to get you back on your feet.

    Accident Benefits are designed to pay costs incurred for injuries, rehabilitation, and other associated expenses in the event you (or anyone insured by your policy) is injured in an automobile accident.

    The standard policy provides a very limited amount of coverage. It is important to note that there may be certain circumstances where you should consider purchasing additional coverage.

    When speaking with our customers, we like to ask a series lifestyle of questions.

    Your answers will help you make a decision as to your need for additional coverage.

    Before looking at our questions, we recommend watching the attached 60 second video’s as they provide a great introduction to this topic.

    Now that you are ready, let’s have a look at these lifestyle questions.

    If any of these scenarios apply to you, We Should Talk!

    • Are you (or anyone insured under your policy) the primary caregiver to young children, elderly parents, or disabled family members?The standard policy only provides coverage for caregiver expense if you are catastrophically injured in an automobile accident. Only 5% of accidents result in catastrophic injury. This means there is no caregiver coverage for the majority of accident related injuries.If you are a caregiver, you have the option of purchasing this coverage for all injury scenarios (Minor Injury, Serious Injuries and Catastrophic Injury).

      This is likely a good option for you.

    • Do you earn more than $30,000 / year and you do not have disability insurance coverage that would extend in the event of an auto accident?The standard policy only provides coverage for income replacement to a max of $400 per week (roughly $30,000 /yr.).If you answered yes to this question, you should consider increasing your income replacement coverage.
    • Do you regularly operate your vehicle in the US?Emergency injuries treated in the US can quickly use up your entire coverage limit, leaving you little or no coverage when you return back home.If you answered yes, you should consider purchasing increased additional coverage.
    • Are you primarily responsible for housekeeping or home maintenanceCoverage is currently available to reimburse you for housekeeping and home maintenance expenses only in the event you suffer catastrophic injuries in an automobile accident.If you are responsible for housekeeping and home maintenance, you should consider purchasing this extra coverage for all injuries.
    • If you do not have a group medical plan through your employer, or the coverage you have is limited when it comes to the types of treatments required after an automobile accidentThe base policy provides limited coverage for the reimbursement of reasonable and necessary Medical, Rehabilitation and Attendant Care expenses.Minor Injury – $3,500 Medical Rehabilitation only
      Non-Catastrophic Injury – $ 65,000 Medical / Rehabilitation / Attendant Care
      Catastrophic Injury – $1,000,000 for Medical / Rehabilitation / Attendant Care

      Depending of the severity of your injuries, these limits of coverage can quickly be used up leaving you to pay medical costs out of your own pocket. In addition to this, many Group Benefits plans have defined limits of coverage for such things as physiotherapy, vocational therapy, and retraining. Often these limits are as low as $300 – $500 per year.

      In short, the amount of coverage provided by the base policy is likely not enough. You have the option of increasing coverage.

      It is our recommendation that everyone consider this option.

    The following document gives a complete listing and description of all of the optional coverages available.

    If you would like more information or have questions please email us or give your MR Expert a call.

  • Important Definitions

    Injuries occur in approximately 55% of auto accidents. Of the injuries that occur, they are classified as follows:

    Catastrophic Injury – These are injuries resulting in long term or permanent disabilities. Examples would include paralysis, amputation, loss of vision, loss of brain function, and spinal injuries.
    Less than 5% of injuries would fall into this classification.

    Minor Injuries – Accident injuries such as strains, sprains, whiplash, minor cuts and bruises. All Minor Injury claims are capped at $3500 including assessment fees.
    28% of all injuries fall under this category.

    Non-Catastrophic or Serious Injuries – examples would include broken bones, severe strains, or any injury that disrupts the injured person’s quality of life for a prolonged period of time.

  • Accident Benefits Coverage Categories
    1. Income Replacement – If you or someone insured under your policy is unable to work as a result of an automobile accident, you may be eligible for a standard weekly income replacement of up to $400. This benefit can be increased in increments to a maximum of $1000 per week for additional premiums.
    2. Medical Rehabilitation – This includes costs associated with emergency treatments, and the rehabilitation process including physiotherapy, vocational therapy, retraining, and prescription medications.
    3. Attendant Care – Covers costs for a professional caregiver to look after you if you have been seriously injured in an automobile accident. The level of coverage you receive would depend on the classification of your injuryThe limits of coverage for Medical, Rehabilitation and Attendant Care are:
      Minor Injury – $3,500 Medical Rehabilitation only
      Non-Catastrophic Injury – $ 65,000 Medical / Rehabilitation / Attendant Care
      Catastrophic Injury – $1,000,000 for Medical / Rehabilitation / Attendant Care
      **** All Limits except Minor Injury can be doubled for an additional premium
    4. Housekeeping and Home Maintenance – if you are unable to complete your usual duties as a result of an automobile accident, this coverage will pay for reasonable and necessary expenses incurred to complete these duties.Coverage is for catastrophic injuries only, and will pay a maximum of $100 per week.
      Coverage for non-catastrophic injuries can be purchased for an additional premium, (limit of $100 per week)
    5. Caregiver Benefit – if you or someone insured on your policy provides full time care for dependents (i.e. children or parents), and as a result of an automobile accident you can no longer continue, you may be eligible for reimbursement of expenses to hire a caregiver. Coverage is included for catastrophic injuries to a maximum of $250 per week for the first dependent and $50 for each additional. Coverage can be purchased for non-catastrophic and minor injuries for an additional premium.
    6. Dependant Care Benefit – if you are employed and have people depending on you for support, this optional benefit is intended to pay additional expenses incurred for their care. This would include children or elderly persons in your care. There is no standard coverage however, it can be purchased for an additional premium. Limits of coverage range from $75 per week to a maximum of $150.
    7. Death and Funeral Benefits – If you or someone insured on your policy dies as a result of an automobile insurance accident, the death benefit provides a lump sum payout.Standard coverage is:
      $25,000 spouse / $10,000 dependent
      $ 6,000 for funeral expenses
      **These limits of coverage can be doubled for an additional premium**
    8. Indexation of Benefits – For an additional premium, coverage can be purchased to ensure that certain weekly benefits will increase on an annual basis to keep pace with the cost of living.
    9. Tort Deductible – The standard deductible for court awarded compensation for pain and suffering is $36,500. You have the option of buying down this deductible by $10,000.
  • Additional Coverage for Loss or Damage to Your Vehicle

    In addition to the standard policy coverages you may also buy extra coverage for loss or damage to your vehicle including:

    Collision or Upset Coverage:

    This coverage pays for losses caused when an insured vehicle is involved in a collision with another object or rolls over. “Object” includes another vehicle or a trailer that is attached to the vehicle that is covered by your insurance policy, the surface of the ground, and any object in or on the ground.

    All Perils Coverage:

    This combines Collision or Upset and Comprehensive coverages. In addition, it covers loss or damage caused if a person who lives in your home steals the vehicle that is covered by your insurance policy. All Perils also covers you if an employee who drives or uses, services or repairs that vehicle, steals it. For example, if you take your vehicle to a garage for repairs and an employee involved in the repair of your vehicle steals it, All Perils would provide coverage.

    Comprehensive Coverage:

    This coverage pays for losses, other than those covered by Collision or Upset, including perils listed under Specified Perils, falling or flying objects, missiles and vandalism.

    Specified Perils Coverage:

    This coverage pays for losses caused by one of the following perils: fire, theft or attempted theft, lightning, windstorm, hail, or rising water, earthquake, explosion, riot or civil disturbance, falling or forced landing of an aircraft or parts of an aircraft, or the stranding, sinking, burning, derailment or collision of any kind of transport in, or upon which an insured vehicle is being carried on land or water.

    Optional Policy Endorsements

    Additional optional enhancements, also known as policy endorsements or Ontario Policy Change 
Forms (OPCF), are special agreements that allow you to change, add, or reduce the amount of coverage for certain situations

    The six most common policy endorsements are:

    Rented or Leased Vehicles (OPCF 5):
    This endorsement extends coverage to a vehicle that you drive, but that is owned by a leasing company.

    Transportation Replacement (OPCF 20):

    This coverage, also referred to as “Loss of use”, covers the cost of a rental vehicle while your vehicle is being replaced or repaired, if the damage or loss is caused by a peril for which you are insured.

    Liability for Damage to Non-Owned Automobile(s) and Other Coverages (OPCF 27):

    This endorsement provides physical damage coverage to vehicles that you may operate but do not personally own – such as a vehicle that you have rented or borrowed – subject to a deductible. It also provides Liability, Accident Benefits, Uninsured Automobile and Direct Compensation-Property Damage coverages in specific circumstances.

    Removing Depreciation Deduction (OPCF 43):

    This coverage removes the insurer’s right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage caused by a peril for which you are insured.

    Family Protection Coverage (OPCF 44R):

    This coverage protects you, or an eligible member of your family, to the same limits as your Third-Party Liability coverage if you are involved in an automobile accident where you are not at fault, with someone who carries less insurance, no insurance, or is an unidentified driver (e.g., hit and run).