The questions you should always ask to make sure you have the best auto
insurance coverage you can afford
Right after you've had an accident is not the ideal time to brush up on your auto insurance coverages.
If you ask most people on the street, they have no idea what they're entitled to and what they've paid
for. That's a mistake that could cost you.
That's why, when your policy comes up for renewal, you must take the time to chat with your broker or
agent to confirm your coverage, limitations, deductibles and changes to legislation that could affect you
in the case of a motor vehicle accident (MVA).
The legislation surrounding motor vehicle insurance in Ontario changes regularly, most specifically in the
area of Accident Benefits (the benefits payable in the case of an injury sustained in an MVA).
I'm not going to spend a lot of time laying out specifics here, as they could very well be different in a
year, but it IS important for you to be aware of what your policy includes, since the changes most often
mean you are getting less and less coverage for your dollar.
Basic Ontario coverage is bare-bones and you want to really think about what you might need in the
case of an injury.
Your broker should be detailing what you are entitled to and what those coverages will cost, and here is
a general outline of the categories you need to have in mind when discussing your renewal:
Compensation For Catastrophic Impairment
In this area, I encourage you to consider, for a few dollars a year, a family protection endorsement.
I can explain this best with an example.
If you were hit by someone else who only had minimal liability coverage— $200k, for example— and no
personal net worth, suing them would be pointless. However, with a family protection endorsement,
you could sue your own company for the difference in expenses between what you can get from the
other person's insurance and the coverage you have (which can go up to $2 million or greater).
Rehabilitation is expensive. Attendant care, if you need it, is expensive. This endorsement is a protection
for you against the financially unrealistic basic coverage that is available to drivers in Ontario.
Maximum Weekly Income Replacement Benefits
In Ontario, Income replacement benefits, which are payable if you can't work following an MVA, are
At the time of this writing, they are set at 70% of your gross income, capped at $400 / week.
If you make $65,000 / year (or $1250 / week), the 70% amounts to $875 / week, yet the cap falls
woefully short at only $400 / week.
If you were unable to work for an extended period of time, this could quickly become a problem for you
and your family. The good news is that you can pay extra to extend that cap to $1000 / week.
I know that auto insurance rates in Ontario are among the highest in North America, but this is one area
where I think it's worth the investment. And to assure you that I walk the talk, as a self-employed person
and sole provider, this is something that I do to ensure I'm not caught short if I were ever to be injured
in an accident.
Increasing The Limits Out Of Minor Injury Guideline
This one is a bit confusing so stay with me...
Under Accident Benefits, if your injury falls within the definition of the Minor Injury Guidelines (MIG),
you are only entitled to up to $3500 of rehabilitation benefits (and no attendant care benefits at all).
The MIG definition includes things like sprains, strains, minor whiplash, cuts and bruises.
If you have an injury that falls outside of the Minor Injury Guidelines but is not catastrophic, you have
higher compensation limits for rehabilitation and access to attendant care.
One of the things you can do is buy increased limits for these two categories, which not only extend
your limits but will allow you to obtain more rehabilitation benefits if you need them according to a
Increasing Your Liability Coverage
If you are at fault for an accident, your typical liability coverage is $1 million. It sounds like a lot, but in
this day and age, a million dollars doesn't reflect the reality of what kind of judgement could be handed
If you have a high personal net worth, and the person you hit can't get more than a million from your
insurance company, they might come after you personally.
If you increase your coverage ceiling to $2 million or more, you can better protect your assets, all for a
couple of dollars a year.
Let This Guide Your Questions When You Talk To Your Insurance Provider
I have to stress, once again, that this information might change. If you are reading this and it's been
awhile since it was posted, they probably already have.
That's why your best bet is always to sit down with your broker and find out what you have and don't
have in terms of coverages. And just like I always advise if you have to speak to a lawyer, ask lots of
questions. If the answers are not crystal clear, don't be shy about asking them to clarify until you're
100% on the same page.
Less coverage does equal lower premiums, but there's always a cost, particularly if you end up having a
car accident and suffering injuries.
And, as always, if you are in a car accident, stay calm and ask for help. See a doctor, keep your receipts
and call a lawyer.