New to Ontario? Here's how Car Insurance works in Ontario

3 minutes to read
Friends singing in a car --- Image by © Josef Lindau/Corbis

If you are new to Ontario, it is important to understand how the insurance system works. This is especially true if you are from a province that does not have a no-fault system, or any other nuances that are different from Ontario’s insurance rules. Here’s everything you need to know about car insurance in Ontario.


What’s Required vs What’s Nice?

All Canadian provinces require drivers to carry the legal minimum of third-party liability coverage and accident benefit coverage. Over and above the minimum you can add a wide variety of optional coverage packages such as collision and comprehensive. Although the requirements in other Canadian provinces are similar, there are some differences that you should be aware of. This was made especially so after the 2010 auto insurance reform took place.

The 2010 reform was aimed at stabilizing insurance rates and allowing drivers to customize their policies to their needs; for example, a customer can purchase the minimum coverage requirement plus additional coverage. The 2010 reform also changed how no-fault insurance affects insurance rates that are charged by the company.


What Does No-Fault Insurance Mean?

Ontario is a no-fault insurance province. “No-fault” is essentially about how the claim is paid and not who is at fault in an accident.

Traditionally, the insurance company of the driver who is found to be responsible for an accident pays the claim of both their own insured driver as well as the other party. Under a no-fault system, like with Ontario auto insurance policies, the insurance companies of their respective policy holders pay the claims of their own drivers. If you are found to be at fault in causing an accident your premium rates will increase, but with no fault certain claims are paid out more quickly without the usual wait for fault to be determined. This allows those involved in an accident to start repairs to their respective vehicles to begin quicker.


Rules for Determining Fault

Ontario’s new law makes determining who was at fault in an accident quicker and easier. These revised rules were created to allow quicker and easier determinations as to who was at fault in an accident and lessen the number of disputes that result from accident claims.

The no fault policy also ensures that the rules set up are adhered to regardless of weather conditions or time of day. It also allows for drivers to be assigned guilt on a scale of 0 to 100 in the event it is determined that responsibility for the accident must be shared.


Public Insurance in Ontario

Some Canadian provinces offer a public insurance system. However, in Ontario, private insurance must be purchased at least at a minimum level. Coverage rates vary, of course, so it pays to shop around for the best rates.

Buying insurance from a private company ensures that you can shop around for the best rates among competing companies which, theoretically at least, allows drivers to buy the coverage they feel like they need and at the best possible price.

If you are looking to lower your rates on auto insurance, check out our auto insurance calculator to quickly get a quote.