How Much Auto Insurance Coverage Should I Have?
In Ontario, if you own a vehicle, you are required by law to purchase automobile coverage that includes:
• Third Party Liability Coverage which protects you if someone else is killed or injured.
• Statutory Accident Benefits Coverage which provides you with benefits if you are injured in an automobile accident, regardless of who is at fault. These benefits include medical and rehabilitation, attendant care, income replacement benefits, non-earner benefits, and death and funeral benefits. Additional optional benefits may be purchased.
• Direct Compensation – Property Damage Coverage which covers damage to your vehicle or its contents and for the loss of use of your vehicle or its contents, to the extent that another individual was at fault for the accident. There are limitations to the application of Direct Compensation Property Damage Coverage so you must check your policy.
• Uninsured Automobile Coverage which protects you and your family if you are killed, or hurt by a hit-and-run driver or an uninsured driver, and will cover damage to your vehicle caused by an identified uninsured driver.
A common question among Ontarians is: How much auto insurance is enough?
In Ontario, in addition to the mandatory minimum insurance that you are required to have by law, you may purchase additional insurance. Below is a description of some of the additional coverage that is available to you:
• Increased Third-Party Liability coverage allows you to increase from the minimum $200,000 required by law, to coverage to $1 million, $2 million, or perhaps $5 million. Third-Party Liability coverage does not just protect your assets if you accidentally injure or kill someone else. When you purchase the standard OPCF44R – Family Protection Endorsement – your Third-Party Liability coverage will also cover you if you happen to be injured due to the fault of another person who is carrying inadequate insurance. In that situation, you can then sue your own insurance company and that company is required to provide coverage to you for the difference between the at-fault driver’s insurance limits and your own Third-Party Liability coverage limits.
• Optional Accident Benefits Coverage is also available. You may purchase some or all of the options to increase or purchase the following benefits:
o Income Replacement Benefits: the standard coverage is 70% of gross pre-accident income up to a maximum of $400 per week. Optional benefits allow you to pay to increase the maximum up to $1,000 per week (or 70% of gross pre-accident income-whichever amount is lower).
o Medical and Rehabilitation Benefits may be increased from the standard maximum of $50,000, to coverage of $100,000 or $1,100,000. This provides coverage for non-O.H.I.P. funded care such as occupational therapy, physiotherapy, psychological counselling, speech language pathology, rehabilitation support worker, social work counselling, etc.
o Attendant Care Benefits: the standard maximum benefit is $36,000 (max. $3,000 per month over 2 years). If you are catastrophically injured the standard benefit is $1,000,000 (max. $6,000 per month over your lifetime). You may purchase optional benefits to increase to $72,000 or 1,072,000, and up to $3,000,000 in combined medical, rehabilitation, and attendant care expenses for catastrophic injuries.
o Caregiver Benefits can be purchased. These benefits pay you a weekly benefit if you care full-time for dependants and are no longer able to care for them as a result of injuries suffered in an automobile accident. You may be eligible if you need to hire someone to care for your dependants. The maximum benefit is $250 per week for the one dependant and $50 per week for each additional dependant. Without optional benefits, these benefits are only available to those who have suffered a catastrophic injury.
o Housekeeping and Home Maintenance Benefits are available as an optional benefit if you are unable to perform your usual housekeeping and home maintenance duties, the maximum benefit is $100 per week. This benefit is paid if you pay someone to perform your usual housekeeping and home maintenance duties on your behalf. Without optional benefits, these benefits are only available to those who have suffered a catastrophic injury.
o Dependent Care Benefits can only be claimed if you were employed at the time of the accident, are not receiving a caregiver benefit, and have to pay for additional childcare expenses as a result of the accident. Optional dependant care benefits cover up to $75 per week for the first dependant and $25 for each additional dependant.
o Death and Funeral Benefits. In the event that you die as a result of an auto accident, the standard amount which will be paid is $25,000 to your eligible spouse, $10,000 to each dependant, and a maximum of $6,000 for funeral expenses. If you purchase optional benefits, you can increase these amounts to $50,000 to your eligible spouse, $20,000 to each dependant, and $8,000 for funeral expenses.
o Indexation benefit provides for the automatic adjustment over time of Income Replacement, Medical and Rehabilitation, Attendant Care, and other benefits in response to changes in inflation, determined according to the Consumer Price Index of Canada.
So, how much insurance is enough? You may have extended health care benefits available through your employer and therefore you may already have some portion of the optional coverage describedabove. You should consider these extended health care benefits, if they are available to you, when reviewing your coverage options and needs.
As stated above, the standard accident benefits coverage does not provide sufficient benefits should you or your loved ones suffer a serious injury. In order to ensure that you have the correct coverage to protect you and your loved ones, speak with an insurance broker or insurance agent so that you are informed of all of your options; having the proper coverage will provide you with much needed peace of mind.
About the Authors
Josie has been working in the legal industry since 1987. She joined Oatley Vigmond in 1995 as a senior law clerk, having developed expertise in demonstrative evidence applications, particularly in the areas of mediation and trial preparation. Her desire to provide hands-on support to clients and their families led her to become an accident benefits specialist. Now, she provides Oatley Vigmond clients with prompt and effective assistance to access the insurance benefits to which clients are entitled. She helps assemble a reliable community rehabilitation and long-term care team for our clients. She’s a licensed paralegal with the Law Society of Ontario, and holds a certificate in rehabilitation management from Seneca College.