Introduction to Auto Insurance
Understanding the basics
Whatever kind of driver you are – a new driver just turning 16 and getting a license, new to driving in Ontario or Canada, or just deciding to start driving – there are a few basics you will want to understand about auto insurance.
This basic knowledge can help when purchasing car insurance. If you understand the different types of auto insurance coverages, you can ask the right questions to make sure you get what's right for you. Not all coverages fit every person. At Desjardins Insurance we offer different packages to address different needs. Whether you just need the basics or deluxe, we want to make sure we protect what's important to you.
Why you need auto insurance
Auto insurance protects you against damage you may cause to your vehicle or to a third party. In Ontario, the law requires you to insure your car for a minimum of $200,000 in Third Party Liability coverage and basic Accident Benefits coverage. Upon purchasing your insurance, you will receive what is known as your "pink slip." This is proof that you have auto insurance coverage. In September, the Ontario Government introduced Ontario Auto Reform. This allows you, the consumer, the choice over the coverages and price you pay for your insurance.
How much insurance is enough?
This is not an easy question since the answer varies according to each person's needs and wants related to coverage, and also the type of vehicle driven.
By law you need a minimum of $200,000 in Third Party Liability coverage. However, it's recommended that you have higher limits: $1 million or even $2 million. This is because you are responsible for any shortfall in coverage.
You must also have accident benefits coverage to protect you if you are unable to work due to an injury sustained in an accident. This will cover medical expenses over and above provincial health plans and provide income benefits. With the Ontario Auto Reform, the criteria have changed regarding the amount necessary. We recommend that you speak to one of our licensed representatives to make sure that you have the proper amount to cover all your needs.
Some optional coverages are dependant on your vehicle. Comprehensive or collision coverage is not required by law; however, you may want to have it if you are driving a newer vehicle. For vehicles that are 5+ years old, this is optional and you may want to speak to one of our agents to see if it is necessary for you. However, if you are driving a newer vehicle (less than 4 years old) this coverage is recommended. Also, if you lease or finance a vehicle, the leasing company or bank will require you to have these coverages since they technically own your vehicle. Proof of this coverage will need to be provided to the dealer before they will release the purchase funds or release the vehicle to you.
Differences in insurance deductibles
Your deductible is the amount of money you pay out-of-pocket towards any claim you make under your insurance policy.
For example, if your vehicle sustains $5,000 worth of damage in an accident and your collision deductible is $500, then you would be responsible for paying $500. Your insurance company would be responsible for paying the remaining amount of $4,500.
You have the choice of selecting the deductible amount that works best for your situation. The higher the deductible, the lower your overall premium will be. Just make sure you are able to pay the deductible amount if you need to make a claim.
Coverage adapted to your needs
We also offer optional coverage for greater flexibility.However, if you want more than basic coverage but find full coverage to be too much, we have the solution—you can customize our insurance products to meet your personal needs.
Discover the flexibility of our offer by requesting an auto insurance quote online today!