Car Insurance – What You Need to Know About Purchasing Enhanced/Additional Coverage

When you buy your car insurance in Ontario, there can be a dizzying array of available options to cover you and your family in case of an auto accident resulting in a personal injury. However, while auto insurance consists of a basic mandatory coverage and a number of enhanced options for an additional premium, many people don’t go beyond the basic coverage or explore the extra options, even when doing so will better protect themselves and the people they love.

Frequently, you can get better, more comprehensive insurance than what you are currently carrying, just by enhancing the policy you already have. To do this with best results, it is important to understand the difference between basic and enhanced coverage, and how each can help you.

The basic coverage that all Ontario drivers must carry consists of:

• Third-Party Liability Coverage: This covers you if you are in an accident where somebody else is injured or killed, or their property is damaged. It also covers damages and legal fees from lawsuits against you. The minimum required Third-Party Liability coverage in Ontario is $200,000.
• Statutory Accident Benefits Coverage: This covers you if you are injured, regardless of who is at fault for the accident. It provides for the costs of your medical fees, rehabilitation, and loss of income.
• Direct Compensation – Property Damage (DC-PD) Coverage: This covers damage to your car and your belongings inside it from a collision with another car. Unlike the previous benefits, it can only be collected if the collision took place in Ontario, was the other driver’s fault, and the other driver was insured in Ontario.
• Uninsured Automobile Coverage: This covers the damage to your car or a personal injury or death to you from an uninsured driver or unknown driver in a hit-and-run.

The enhanced coverage can be divided into two categories: increasing the size and scope of your benefits, and covering more sources of damage to your vehicle. The additional enhanced coverage for benefits includes, but is not limited to:

• Increased Third-Party Liability Coverage: This increases your coverage from the required $200,000 to as much as $2 million.
• Income Replacement Benefits: This increases what you can receive from your insurance company after suffering a personal injury in an auto accident. This coverage can only be activated after you have attempted to claim compensation from workplace benefits or a disability plan.
• Medical, Rehabilitation and Attendant Care Benefits: The basic coverage often does not provide enough compensation to cover the costs from a catastrophic and permanent personal injury. This increases the coverage to a maximum combined total of $3 million, across medical, rehabilitation, and attendant care expenses.
• Caregiver Benefits: At the basic level of insurance, caregiver benefits are not available unless you have suffered a catastrophic injury. This extends these benefits to all injuries, no matter how severe.
• Dependant Care Benefits: This covers additional child care expenses if you were employed at the time of the auto accident, but are not receiving caregiver benefits.
• Death and Funeral Benefits: This serves as an additional life insurance should you be killed in an auto accident. It expands what your family will receive to $50,000 to your spouse, $20,000 to each dependant, and $8,000 for funeral expenses.

The additional enhanced coverage for damage to your vehicle includes, but is not limited to:

• Specified Perils Coverage: This covers losses due to specific causes that are often not covered under the rest of your insurance policy, such as fire, hail, lightning, earthquake, and being involved in a plane crash.
• Collision or Upset Coverage: This covers damage to your vehicle caused by a collision with another object on the ground, such as a car or trailer.
• Comprehensive Coverage: This covers damage to your vehicle not covered by Collision, including Specified Perils. This includes falling objects and vandalism.
• All Perils Coverage: This combines Collision and Comprehensive coverage, as well as covers against the theft of your vehicle, including cases where it was stolen by a member of your immediate family, an employee or co-worker, or an employee of an auto shop to which you took your vehicle for repair.

What coverage is best for you will depend on your car and your family situation. If you have a brand-new car that would be very expensive to replace, you will be well served by enhancing the damage coverage to your vehicle. On the other hand, if you have a used car that would be very inexpensive to replace, the extra coverage won’t be worth the money. Likewise, the enhanced benefits will serve you far better if you have a family and children, but may be less important if you are single and unattached.

In the end, what matters is to find the best coverage for you and your family, by exploring and understanding the many ways to enhance your auto insurance to better protect you and those you love.

Talk to your insurance broker for more options. Please also inquire about the suitability of a Personal Liability Umbrella Policy, which can attach to a homeowner’s policy and extend the limit of the third-party liability coverage in place on your motor vehicle policy. PLUP’s are typically cost effective and available, with some insurance companies, up to $8,000,000.