Ontario drivers have access to many types of auto insurance coverage, from legally required policies to optional add-ons that provide extra protection. Understanding the difference between mandatory and optional coverage helps you build the right policy for your needs and budget.
Mandatory Coverage in Ontario
Ontario law requires every registered vehicle to carry four types of coverage. These form the foundation of any auto insurance policy in the province.
Third-Party Liability
Protects you financially if you cause an accident that injures someone or damages their property.
- Legal minimum: $200,000
- Recommended: $1,000,000 to $2,000,000
- Covers: Bodily injury claims, property damage claims, legal defense costs
Statutory Accident Benefits
Provides benefits to you and your passengers after an accident, regardless of who was at fault. Benefits include medical care, income replacement, and caregiver support.
Direct Compensation - Property Damage (DCPD)
Covers damage to your vehicle when another Ontario driver is at fault. You claim directly from your own insurer rather than pursuing the at-fault driver.
Uninsured Automobile Coverage
Protects you if you're injured or your vehicle is damaged by an uninsured driver, an unidentified driver, or a stolen vehicle.
Optional Coverage Types
Beyond the mandatory minimums, several optional coverages can significantly enhance your protection.
Collision Coverage
Pays to repair or replace your vehicle after a collision, regardless of who caused the accident. This coverage is essential if you want protection for your own vehicle when you're at fault.
What it covers:
- Single-vehicle accidents (hitting a tree, pole, or guardrail)
- Collisions with other vehicles when you're at fault
- Damage from potholes (in most cases)
What it doesn't cover:
- Mechanical breakdowns
- Wear and tear
- Theft or vandalism (that's comprehensive)
Comprehensive Coverage
Covers damage to your vehicle from events other than collisions. Often called "fire and theft" coverage, it actually protects against much more.
What it covers:
- Theft of vehicle or parts
- Vandalism
- Fire and explosion
- Falling objects
- Hail, wind, and flood damage
- Animal collisions (hitting a deer, for example)
- Glass breakage
Specified Perils Coverage
A more limited (and less expensive) alternative to comprehensive coverage. Protects against specific named risks only, such as fire, theft, lightning, and windstorm.
All Perils Coverage
Combines collision and comprehensive coverage into a single coverage with one deductible. Some insurers offer this as a convenience option.
Optional Coverage Endorsements (OPCFs)
Ontario has standardized optional endorsements you can add to your policy. Some of the most common include:
OPCF 20 - Loss of Use
Pays for a rental car or transportation costs while your vehicle is being repaired after a covered claim.
OPCF 27 - Liability for Damage to Non-Owned Automobiles
Extends your coverage when driving rental vehicles. Important for anyone who occasionally rents cars.
OPCF 43 - Removing Depreciation Deduction
Also known as "waiver of depreciation" or "replacement cost coverage." Pays to replace your vehicle with a new one of the same make and model if it's totalled within a certain period (usually 2-3 years).
OPCF 44R - Family Protection Coverage
Provides additional coverage if you're injured by an at-fault driver who has inadequate insurance. One of the most important optional coverages available.
How to Choose Your Coverage
Consider these factors when deciding on coverage:
- Vehicle value: Collision and comprehensive make more sense for newer or more valuable vehicles
- Financing: Lenders typically require collision and comprehensive coverage
- Risk tolerance: More coverage means more protection but higher premiums
- Savings: Could you afford to replace your vehicle out of pocket if it was totalled?
Building the Right Policy
The best auto insurance policy balances adequate protection with affordable premiums. Start with the mandatory coverages, then add optional coverages based on your vehicle, financial situation, and comfort level with risk.
Compare quotes from multiple insurers to see how different coverage combinations affect your premium.