It may seem like a hassle to have to pay for and keep auto insurance coverage on your vehicle, but if you or someone you love has ever been in a car accident, you probably already know what a nightmare it can be. Car or truck repairs need to be paid for, as well as property damage and medical bills in the event that someone is injured in an accident. If you do not have proper insurance, these costs will all be your responsibility.
What is the Ontario Automobile Act?
The Ontario Automobile Act was put into place, not only to protect drivers and their families in the event of an accident, but also to protect consumers by standardizing the way insurance providers work. The Ontario Automobile Act sets guidelines on the coverage that each driver must maintain, as well as how insurance companies set their prices. Although this act cannot stop people from being irresponsible or careless, these laws were set forth to help keep everyone on the road a little bit safer.
Mandatory Insurance Requirements
First, there is a mandatory insurance requirement of $200,000 in liability coverage for every licensed vehicle on the road. Liability coverage is there for when you or another driver cause injury or damage to a third party or a third party’s property. This can be a huge benefit to any driver, and also helps to protect everyone else.
Also mandatory under the Ontario Insurance Act, is accident benefits coverage. This is the part of your insurance policy that helps with the rest of your life, after an auto accident. Medical, rehabilitation, and caregiver costs are covered, as well as options for child care costs, missed work, and in the event of a tragedy, death benefits. There are standard coverage options that insurance companies must provide, but most of these can be increased by the consumer if they see the need. Of course, if you add extras to your policy, your premiums will go up as well.
Government Controlled Auto Insurance Premiums
The Superintendent of Insurance who works for the Financial Services Commission of Ontario is set to oversee and regulate all insurance companies that offer coverage in Ontario. Each insurance company must provide it’s rates to the Superintendent for approval. If the company’s rates are approved, they cannot be changed. This way, all insurance providers are operating in a regulated environment that is controlled by the government.
Luckily, Ontario works on a no-fault system. This means that your coverage will pay out what is owed, no matter who is at fault in an accident. This helps to simplify the system, and speed up the restitution process. Only catastrophic injuries may cause an insurance claim to be taken to court.
Although your driving history will affect the cost of your insurance policy, Ontario auto insurance works under an all-comers rule. This means that insurance providers cannot choose to deny coverage due to a driver’s past infractions, with very few exceptions. Also, under the Ontario Automobile Act, insurers are only allowed to use your driving credentials when they are determining your rates. Use of credit history, employment status, etc. are forbidden.