Auto Insurance Requirements in Toronto: What You Need to Know

While auto insurance might not be a vehicle owner’s favorite topic, if you live in Toronto, driving without insurance can be costly. To avoid the hefty penalties for driving without proper insurance coverage, make sure you have what’s required of you.

Here we’ll check out the auto insurance laws in Toronto while also looking at what types are available, how it works for finance vehicles and much more. Let’s get started with our guide to legal auto insurance in Toronto.

General Types of Toronto Auto Insurance

There are several types of auto insurance policies available in Toronto that provide mandatory coverage. However, keep in mind that their coverage might vary from including only damages to your property or other people’s property to those that include damages to the vehicle.

Your options will include the following:

• Liability Coverage
• Collision Coverage
• Comprehensive Coverage
• GAP insurance

Minimum Auto Insurance Requirements in Toronto

According to Canadian laws, vehicle owners are only required to carry liability coverage. However, in certain Canadian provinces, like Ontario, insurance has more requirements for auto insurance. And if you’re looking for car insurance in Toronto, you’ll be subject to these requirements.

Failing to obtain adequate insurance could earn you a fine of $50,000, not to mention a one-year suspension of your driver’s license. So you can see why it’s critical to get covered. The minimum auto insurance requirements in Toronto apply to all owners regardless of age, vehicle type, or accident history.

You must carry a combined coverage, which consists of four different types – with each having a minimum as a must on your policy.

Below is a quick breakdown of the mandatory coverage types according to Toronto laws and regulations:

Third-Party Liability Coverage – This form of policy provides coverage in case you cause an accident that causes property damage to damage to another vehicle or if someone is injured or killed in the accident. Here you’ll have a minimum of $200,000 in coverage – but to save themselves many expenses and time lost in case of an accident, many auto owners carry more than the minimum amount.

Statutory Accident Benefits Coverage – This plan provides coverage for your medical care following an accident, including rehabilitation, supplemented medical care, and 70% (or $400) of your weekly salary.

Uninsured Automobile Insurance – This type of automobile insurance covers the vehicle owner in the event they’re involved in an accident with an uninsured motorist or have a hit-and-run case where the identity of the other driver cant is established. This type of insurance plan also makes payouts to the families of those who die in a car accident caused by an uninsured or hit-and-run driver.

Direct Compensation – Property Damage (DC-PD) Insurance – This type of coverage comes in handy when another motorist causes your accident. It pays for the damage to your vehicle, and if it’s deemed a total loss, it will compensate you for it. However, these benefits will only apply if the accident happened in Ontario, the other driver is insured in this province, and the accident was their fault. For this reason, many drivers buy additional insurance to cover them if an accident occurs outside Ontario or the other driver wasn’t uninsured or hadn’t had the proper coverage.

With the above policy types in mind, in Toronto (and Ontario in general), the minimum auto insurance coverage starts with at least $200,000 in third-party liability coverage. The minimum required amount for the other three policy types varies depending on many factors, including the insurance company you’re using.

That said, having adequate insurance provides you with benefits if you’re injured in an accident, regardless of fault. Some of the benefits include:

• Caregiver costs coverage
• Rehabilitation coverage
• Non-earner and income replacement

Minimum Car Insurance Required on a Financed Vehicle

If you choose to purchase insurance for financed vehicles in Toronto, you will likely be subject to different requirements. Lenders typically want to protect their assets, which is why your premiums will be higher than they would for a vehicle you buy on your own.

While lenders are also subject to Ontario’s insurance laws, there are no regulations about the minimum car insurance policy for financed cars in Toronto. This is why lenders can dictate the required minimum policy.

If you have a financed vehicle, contact your lender about the details of the required policy. If you’re considering financing a car, ask the lender about their minimum coverage requirements. If you lack adequate auto insurance coverage, a lender in Toronto can purchase its own policy and charge you for it.

Final Thoughts

Getting car insurance in Toronto might seem like a daunting prospect. However, as you’ve seen from this article, it’s pretty straightforward, not to mention mandatory. Requirements for financed vehicles might differ from this, and their insurance often comes with higher premiums.

Whether you’re looking to purchase a new car or just browsing through insurance options in Toronto, keep these tips in mind to find the best auto insurance policy. If you need an auto insurance policy or just want more information, contact Marathon Insurance today to see how we can help.