Types of Auto Insurance Policies in the Province of Ontario

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Compulsory Insurance Coverage

If you live in Ontario then there are a number of mandatory and optional car insurance coverage types available to you. Here are the coverage types that are mandatory for all drivers in Ontario.


Every vehicle in Ontario must carry at least $200,000 in third party liability coverage but most people choose to increase that amount to $1 million or $2 million in coverage. Third-party liability insurance protects you in the event you damage someone else’s property or if you injure or kill someone.

Accident Benefits

Accident Benefits is another mandatory coverage in Canada. It will help cover income replacement, medical needs, rehabilitation, non-earner benefits, and caregiver costs if you are injured or killed in a motor vehicle accident. In 2010, Ontario changed its insurance laws to give you more options when it comes to your accident benefits coverage.

Uninsured/Underinsured Driver Protection

This coverage will protect you (and a member of your family) if you are injured or killed by an uninsured driver. It also applies to a driver that is unidentified, such as the case in many hit-and-run incidents. This coverage also protects your vehicle if the driver is identified.

Direct Compensation Property Damage

This coverage is included in your car insurance premiums. It pays for damage that your vehicle might sustain in an automobile accident that is not entirely your fault.

Optional Insurance Coverage

The following coverage types are optional in Ontario but you should at least consider them when you go to renew your auto insurance. They will increase your overall insurance premiums but they could also save you a lot of money in the long run.

Comprehensive Cover

If you want to have your car protected against vandalism, fire, floods, windstorms, lightning, and theft then you should consider comprehensive coverage. It will protect you against damages or losses caused by those things.

Collision Cover

This optional coverage will pay for damages to your own vehicle. It is not required by law, but it is recommended, especially if your vehicle would be expensive to replace. Collision coverage will also pay for damages to your vehicle when you roll the automobile or if you hit another object – be it a car, a tree, or a building etc. If you don’t have this coverage and you are entirely at-fault in an accident then you will not be covered. Almost all car leasing and financing companies will require that you purchase collision protection if are to lease or finance a vehicle.

Transportation Replacement Coverage

This additional coverage will reimburse you for the money you spend on renting a car, while your vehicle is being repaired or replaced. Depending on the coverage you get it may pay for car rentals, taxis, and public transportation while your car is being fixed, or while you seek out a new vehicle.

Depreciation Coverage

This coverage allows you to replace your vehicle with a brand new one, should your car be stolen or deemed a total loss.