What mandatory car insurance is required in Ontario?
If you live in Ontario, you’ll need to have mandatory car insurance coverages that protect you, your passengers, and other drivers.
The penalties are stiff for driving in Ontario without mandatory car insurance. Fines start at $5,000 and can go up to $50,000, and can also include a one-year suspension of your driver’s license.
Your car insurance expert will explain how your policy must comply with the mandatory car insurance rules under the Financial Services Commission of Ontario (FSCO), which oversees the Ontario insurance industry.
Here are the four types of coverages that are legally required:
- Third-party Liability Coverage: It protects you if someone is killed or injured, or their property is damaged, and you are found to be legally liable. It will pay for claims due to lawsuits against you up to the limit of your coverage, and it will pay the costs of settling the claims. By law in Ontario, you must have a minimum of $200,000 in third-party liability coverage as part of your mandatory car insurance. Options exist to increase that minimum amount and it is highly recommended that you purchase a higher limit.
- Statutory Accidents Benefits Coverage: This mandatory section of your car insurance policy provides you with benefits if you are injured in an accident, no matter who is found to be responsible. It includes supplementary medical, rehabilitation and attendant care, caregiver, non-earner and income replacement benefits, and there are options to increase most of these coverages.
- Direct Compensation - Property Damage (DCPD) Coverage: This section of your mandatory insurance policy covers damage to your car or its contents, and for the loss of use of your car or its contents, if another person was at fault for the accident. It is called direct compensation because even though someone else causes the damage, you collect directly from your own insurer.
However, insurance coverage under the DCPD section only applies if the following conditions are met:
- the accident took place in Ontario;
- there was at least one other vehicle involved in the accident;
- at least one of the other vehicles is insured by an insurance company licensed in Ontario or has signed an agreement with FSCO to provide this type of coverage
- Uninsured Automobile Coverage: This type of mandatory car insurance protects you and your family if you are injured or killed by a hit-and-run driver or by an uninsured motorist. It covers damage to your car caused by an identified uninsured driver.
Do you want more than the minimum for your Ontario car insurance?
Your car insurance expert will explain how you can purchase higher liability limits under your third-party liability coverage and under your accident benefits coverage to suit your needs.
You are legally required to carry a minimum of $200,000 in third-party liability coverage, but you can choose to increase it to $500,000, $1 million or $2 million, or higher. The cost to do this is small in most cases.
Collision insurance is optional and protects your car for damages to it for which you are found to be responsible.
Comprehensive insurance protects your car from vandalism, weather events such as lightning and hail and falling objects like trees, theft, collision with an animal, and more.
You may also want to consider increasing your statutory accident benefits coverage by buying optional benefits, which can include such things as income replacement, death and funeral benefits and caregiver benefits. Again, your car insurance expert will take the time to explain how to increase these benefits and what they cover.
Why Mandatory Car Insurance in Ontario May Not Be Enough
While Ontario law requires minimum insurance coverage, serious accidents can easily exceed the basic limits. Medical expenses, legal costs, vehicle repairs, and loss of income can quickly add up, especially in severe or multi-vehicle collisions.
Many Ontario drivers choose higher limits to better protect their finances and avoid unexpected out-of-pocket expenses.
Understanding Ontario’s No-Fault Insurance System
Ontario operates under a no-fault auto insurance system, which means:
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You generally deal with your own insurance company after an accident
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Accident benefits are paid regardless of who caused the accident
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Fault still plays a role in determining liability and claims under certain coverages
This system helps speed up claims but makes choosing the right coverage limits even more important.
How Location in Ontario Can Affect Your Car Insurance
Your driving location can impact both your risk and your insurance costs:
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Toronto & GTA (Car Insurance Toronto): Higher traffic congestion, more frequent accidents, higher claim costs, and increased exposure to theft and vandalism. Drivers looking for car insurance in Toronto often choose higher liability limits due to the density of traffic and pedestrians.
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Southern Ontario highways: Increased risk of high-speed and multi-vehicle collisions, especially for commuters and long-distance drivers.
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Northern Ontario: Greater exposure to wildlife collisions, remote roads, and severe winter driving conditions.
Insurance coverage should reflect where and how you drive in Ontario, particularly for drivers seeking car insurance in Toronto, where risks and premiums tend to be higher.
Optional Coverages Many Ontario Drivers Choose
In addition to mandatory coverage, many drivers in Ontario choose to add:
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Collision coverage for at-fault accidents
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Comprehensive coverage for theft, vandalism, and weather damage
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Increased accident benefits for better income replacement and medical coverage
These optional coverages help close gaps left by minimum insurance requirements.
Review Your Ontario Car Insurance Regularly
Changes such as moving, buying a new vehicle, or changes in driving habits can affect your insurance needs. Reviewing your Ontario car insurance regularly helps ensure:
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Your liability limits remain appropriate
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Optional coverages still match your lifestyle
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You continue to comply with Ontario insurance laws
