Auto Insurance Coverage
Learn what makes a full and complete coverage for your car.
Simplifying Car Insurance Coverage
Liability Coverage
Liability coverage is the foundation of all auto insurance coverages. It financially protects you in the event of a lawsuit or at-fault accident.
Comprehensive Coverage
Comprehensive coverage covers the repair or replacement cost of your vehicle in the event of fire, theft, vandalism, or natural disaster.
Collision Coverage
Collision coverage covers the cost to repair or replace your vehicle in the even of an at-fault accident.
Parking Coverage
Parking coverage provides the same coverage as comprehensive without the liability component.
Insurance Edorsements
Insurance endorsements are the added components to your coverage that help to round out your protection.
Deductibles
Insurance deductibles are a cash amount you must pay before the insurance will cover the remaining damages.
Auto liability insurance is the most basic type of car insurance and it is legally required to drive on public roads. It is the most affordable option for car insurance, although it does not protect your vehicle in an accident.
Liability insurance provides coverage for damages or injuries that you cause while driving your vehicle. There are typically two main components to automotive liability insurance.
- Bodily Injury Liability: This covers medical expenses, pain and suffering, lost wages, and legal expenses for individuals injured or killed in an accident where you are at fault.
- Property Damage Liability: This covers damage to other people’s property caused by your vehicle, such as their car, fence, or building.
If you make a claim on your liability insurance, you do not have to pay an insurance deductible, but you can expect your insurance premiums to increase the following year.
How Much Liability Coverage Do I Need?
In Ontario, you’re legally required to have a minimum of $200,000 in liability coverage. While this is the legally required minimum, Tango Insurance has a policy to insure no less than $2 million for liability coverage.
We require $2 million in liability coverage to ensure our clients are getting adequate protection. The number of auto insurance claims that cost over $1 million in liability has skyrocketed since 2010. Your liability limit is the maximum amount the insurance company will pay out in the event of a claim.
If you are in an auto accident that has $500,000 in property damage and $1 million in bodily injury damage, you would be liable for $1.5 million in damages. If your auto liability coverage is only $200,000, you would be held personally liable for the remaining $1.3 million in damages. If you had $2 million in liability coverage under the same circumstances, your insurance company would pay out the entirety of the settlement on your behalf.
.Comprehensive coverage is optional insurance coverage that provides financial protection for you in the event that your vehicle is damaged outside of a collision with another vehicle.
This includes protection for:
-
- Glass: Covers the cost of repairing or replacing damaged automotive glass (subject to deductible).
- Fire: If your car is damaged or destroyed by fire, it is comprehensive auto insurance that covers the damage and not your property insurance (even if parked in a garage).
- Theft: Covers the cost of replacing your vehicle in its existing condition.
- Vandalism: Covers the cost to repair damage inside and outside of the vehicle.
- Natural disasters: Tree falls, hail damage, flooding, tornado, etc. are covered under comprehensive coverage.
- Animal Collision: Hitting an animal while driving is usually covered under comprehensive coverage.
- Hit-and-Runs: If you are the victim of a hit-and-run, your insurance company may consider that a comprehensive claim. Talk to your insurance broker about your provider’s coverage details.
- Other
Comprehensive insurance claims do require you to pay your deductible before coverage kicks in, although making a comprehensive claim does not impact your claims status or your insurance premiums the following year. Comprehensive is only mandatory for financed vehicles.
Collision coverage is optional coverage that provides financial protection for you in the event that you are in a collision with another vehicle or an inanimate object on the roadway.
Liability and comprehensive insurance coverage do not offer any protection for your vehicle if you’re in an at-fault accident with another vehicle. Collision coverage will pay for the cost to either repair or replace the value of the vehicle if it cannot be repaired/is not financially viable to repair.
Making a claim on your collision coverage will increase your auto insurance premium upon renewal. If you have an accident forgiveness endorsement (OPCF 39) on your insurance policy you will not be hit with a premium increase as a result of your accident.
Collision coverage is the most expensive type of auto coverage and is only mandatory on financed vehicles. *Note that you must always maintain liability coverage in addition to collision coverage.
Parking insurance is a type of coverage designed for vehicles that will not be driven for extended periods of time, usually over three months. Parking coverage is the same type of coverage as comprehensive only without liability protection. This means that if the vehicle is damaged as a result of fire, theft, vandalism, or natural disaster, while on parking coverage, your insurance company will cover the damages.
Since the coverage does not possess liability coverage, it is an excellent way of maintaining coverage on your vehicle for an affordable rate. However, since it does not have liability protection, it is illegal to drive a vehicle while it is on parking coverage. If you are caught driving a vehicle without liability insurance in Ontario, you will be subject to a fine of no less than $5,000 and up to $25,000. If you are in an accident while on parking coverage, you will be held personally liable for all damage you’ve caused.
Insurance endorsements are provisions in insurance policies that help to round out your coverage. They are optional, although they often have an insignificant premium increase with considerably more coverage. Here are a few of the more common auto insurance endorsements:
OPCF 43: Removing Depreciation Reduction
The Removing Depreciation Deduction endorsement maintains your vehicle’s purchase price if it’s stolen or deemed a total loss. Typically, insurance covers the vehicle’s depreciated value minus the deductible. With this endorsement, you receive the purchase price minus the deductible, making it ideal for new cars. As your car ages, review your policy to ensure it still fits your needs.
OPCF 20: Coverage for Transportation Replacement
The Coverage for Transportation Replacement endorsement, also known as Loss of Use Coverage, covers rental car or transportation costs while your vehicle is being repaired after a covered claim. This coverage lasts until your vehicle is repaired, a total loss settlement is offered, or the coverage limit is reached.
OPCF 27: Liability for Damage to Non-Owned Automobiles
The Liability for Damage to Non-Owned Automobiles endorsement provides physical damage coverage for rental cars or other non-owned vehicles. If you have an accident in a rental car, this endorsement covers repair costs minus your deductible.
OPCF 44R: Family Protection Coverage
Family Protection Coverage offers additional third-party liability coverage and benefits for you and eligible family members in case of serious injury or death from a covered claim. If an at-fault third-party lacks sufficient insurance, this endorsement covers the difference up to your policy limits.
What is an Auto Insurance Deductible?
Deductibles are cash payments that must be made when you’re making a collision or comprehensive claim on your auto insurance. It is a pre-established amount that you must pay out of pocket before your insurance covers the cost of the damage. It is a way for you and the insurance company to share in the risk.
Some insurance companies have perks built into their policy where deductibles are not required for certain comprehensive claims. Talk to your broker about your coverage options.
When do I Need to Pay My Auto Insurance Deductible?
While it can depend on the insurance company you are with, a general rule of thumb is that you’re required to pay your deductible when you make a comprehensive or collision claim. Liability insurance does not have a deductible.
How Much is an Auto Insurance Deductible?
Deductibles can vary depending on multiple factors, but generally, they are between $500-$2,500 per claim with the most common deductible being $1,000 per claim.
You can choose higher deductibles up to $25,000 per claim to help lower your annual insurance premium, although this is not recommended as you would need to pay $25,000 out of pocket before the insurance company would pay out anything.
If you have an insurance record with claims or a driving record with tickets, your insurance company may require a higher deductible, usually a $2,500 minimum.
If you are the owner of a high-value vehicle (over $100,000 in purchase price) the insurance company may require you to have a higher deductible. Every provider is different, but its deductibles are usually $5,000 or a percentage of the purchase price. If you have a $250,000 vehicle, a 5% insurance deductible would result in a $12,500 deductible.
From our Blog
How to Tell When Your Roof Was Last Updated
Insurance companies often inquire about the age of your roof to assess its condition and potential risk factors. Knowing the age of your roof can impact insurance coverage eligibility and premiums, as older roofs may be more prone to damage or may be near the end of...
How Do I know What Kind Of Wiring My Home Has?
Learn how to identify the wiring in your home for safety and insurance purposes with our simple guide. Identify aluminum, copper, or knob-and-tube.
7 DEFENSIVE DRIVING TECHNIQUES TO ENSURE ROAD SAFETY
Defensive driving is a set of driving skills, techniques, and behaviors that prioritize safety and proactive decision-making to reduce the risk of accidents, injuries, and conflicts on the road. It involves being vigilant, aware of one's surroundings, and prepared to...