Debunking Auto Insurance Myths (part 1)
Common Misconceptions about Auto Insurance in Ontario
It is time to debunk those auto insurance myths! There are a number of myths and misconceptions concerning auto insurance in Ontario which we are going to review and correct. Here are a few of the most frequently asked about topics and questions.
- Traffic Tickets & Fines: One of the most common misconceptions we hear daily is general confusion surrounding demerit points or paying fines. Many people assume if a fine is paid and they receive no demerit points then the conviction on their record does not count towards their insurance rating. FALSE! Demerit points do not count towards insurance underwriting however if you receive a conviction and it shows on your 3-year MTO drivers license history report it will impact your insurance rating.
- “I want one-Way/2-Way/Full Coverage”: These terms do not exist in the auto insurance industry within Ontario! What you can choose is to either carry Liability Only coverage, which will give you the legal minimum coverage in Ontario or you can have Liability, Collision and Comprehensive coverage. See our previous posts to find out more about what these coverages include. It is also worth mentioning there is also a lot of additional endorsement which you can add in order to increase your coverage.
- “I want the insurance to cover the other person’s vehicle if it’s damaged”: In Ontario, auto insurance policies cover the policyholder only, not the other party’s damages. Ontario operates on a no-fault basis, meaning regardless of fault you always claim through your own auto insurance provider. If you are in a claim situation and you have chosen to have Collision coverage as part of your insurance policy, your vehicle – and only your vehicle – can be repaired through insurance (your deductible may trigger.) The third party would need to claim through their own insurance company, provided they have collision coverage on their policy.
- “I want to insure this car, but I’m not the owner”: You can NOT insure a vehicle you don’t own. Plain and simple. The policyholder must be the registered owner of the vehicle so if you don’t own the car, you can’t get insurance on it. You can have a situation where a parent owns a vehicle and a child is the primary driver and in that case, the parent would set the policy up with the named driver being the child.
Look out for part 2 in which we will delve more into the myths and misconceptions swirling around auto insurance in Ontario! And again should you have any auto insurance questions please speak with your insurance broker directly.