How Much Car Insurance Do You Really Need in Ontario?

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Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on July 18, 2023

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated July 18, 2023

Visit author page

2 minute read

Article Contents

There is no right or wrong answer to this tricky question, the answer really depends on the driver and what will be best to suit their needs. However, even if you are looking to cut costs one thing is for certain, it’s better to have some sort of insurance rather than none at all!

In Ontario, there is the option for basic auto insurance, otherwise known as mandatory, the sort which every driver within the province has to legally have before they can drive on the roads. So how much car insurance do you really need in Ontario?

Is basic car insurance even worth the risk?

Before making any tough decisions it’s important to make sure you have assessed all the repercussions. Therefore, if you are considering downgrading your insurance, there are a few things that you should consider before doing so.

Firstly, there’s always some room for manoeuvring so make sure you’ve thoroughly compared all the insurance options that are being offered. You may even be able to get better insurance than you think, it just takes some time to find the cheaper deal. Even if you do decide to go with the cheaper option then you shouldn’t be surprised when you want some extras added to your policy, but have to pay a higher rate compared to if you had a comprehensive policy.

Also, you may want to note that if you are involved in an accident or need some assistance, with minimum insurance you may become financially liable. Not only does this put you at risk but if the costs are high enough it could put some stress and strain on the family as a whole.

What is the most basic car insurance available?

As mentioned above, auto insurance requirements in Ontario are split into two main parts: you have the choice between mandatory coverage and optional coverage. In regards to the bare minimum coverage you are legally allowed to drive with a policy that contains the following; Third-Party Liability Coverage, Accident Benefits Coverage, Direct Compensation – Property Damage (DC-PD) Coverage and Uninsured Auto Coverage.

Third Party Liability CoverageIn Ontario it is the law that you must carry a minimum of $200,000 in coverage. In case a person is injured, killed or property is damaged
Accident Benefits CoverageThis type of policy provides you with benefits coverage regardless of who was at fault in the incident.
Direct Compensation – Property Damage (DC-PD) CoverageThis policy provides you with cover to your vehicle and its content if they are damaged when you are not at fault.
Uninsured Auto CoverageThis will ensure you and your family is covered if someone is hurt or killed when the person responsible is uninsured or cannot be identified.

What extras won’t be included in your plan?

When it comes to purchasing any sort of insurance there’s bound to be lots of variation from one policy to the next and it’s no different with a car. Even if you were to decide to go with the more basic sort of car insurance it’s important to know what other extras won’t be included in your plan, as you may end up deciding to want these later on.

Some of the more popular optional extras that regularly get added to policies within Ontario are in fact just an increase in liability limits for your Accident Benefits Coverages, as well as an increase in Third-Party Liability Coverage. For example, it is not uncommon to see a basic insurance policy where the driver has decided that it would be worthwhile increasing their Third-Party Liability coverage amount to either $500k, $1 million or even $2 million.

Ultimately, deciding what coverage to take and at what amount is up to the driver and it is our job to help advise you based on your needs and requirements.

Congratulations! You made it to the end!

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