- Third Party Liability
- Accident Benefits Coverage
- Direct Compensation-Property Damage
- Uninsured Motorist Coverage
Third Party Liability covers the costs for any injuries or damages caused by an accident in which you’re at fault. Accident Benefits Coverage works much like a disability benefit in cases where an accident leaves you disabled and unable to earn a living. It also covers some of your medical costs along with a funeral and death provision benefit.
Direct Compensation-Property Damage applies for accidents where the other drive is at fault. This type of coverage enables you to receive compensation benefits from your own insurance company rather than the other driver’s insurer. This works to speed up the claims process while your insurer recovers these compensation benefits from the other driver’s insurance company. Uninsured Motorists Coverage pays for any damages or injuries caused by uninsured drivers as well as for hit-and-run accidents.
While the minimum coverage requirements may seem like they cover just about everything, some drivers may still want to consider buying additional protections.
The recent reforms made to the Standard Auto Insurance Policy reduces certain benefit coverages leaving Ontario residents to purchase additional insurance if they so choose. As minor or non-catastrophic claims have accounted for much of the money insurers pay out in claims, most of the changes made affect these benefit coverages.
Some of the coverage changes implemented by the reform include -
- Medical and rehabilitation benefits reduced to $50,000 from $100,000
- A $3,500 maximum benefit allowance for minor injuries regardless of policy coverage amounts
- Income benefit replacement reduced to 70 percent from 80 percent of gross income
Another change of note affects the Fault Determination Rules which prevents insurers from increasing policyholder premium rates when drivers are found to be 25 percent or less at fault in accident. This provision no longer applies, so policyholders may be subject to rate increases regardless of the degree to which they’re at fault in an accident.
Ultimately, unless a person suffers catastrophic harm from an accident, many of the coverage benefits policyholders relied on have been reduced considerably. For some people, purchasing additional accident benefit coverage may be the right way to go.
Coverages to Consider
Someone who drives a new car or lives in an area known for inclement weather patterns will lack needed insurance coverages under the Standard Auto Insurance Policy program. As many, if not most new car owners have a loan obligation to fulfill, lenders typically require drivers to have collision coverage on the car. Likewise, the possibility of damage resulting from storms, fire or even theft also poses a risk for new car owners and lenders alike.
Even in cases where a car is a few years old, having the option to repair rather than replace a vehicle is often the best alternative, budget-wise. Granted, insurance costs will run cheaper with just minimum coverages but that’s only if no unexpected accidents or events take place. In effect, the potential costs from an accident can far exceed any savings had by skimping on insurance protections.