In Canada, the law requires all vehicles to be insured.

Vehicle insurance protects the operator from a possible financial loss caused by an accident/collision or a stolen vehicle. In that case, insurance will reimburse the operator according to the package.

Insurance is payable in monthly or yearly premiums. The premium depends on the driver's driving experience, driving behaviour, type of vehicle, postal code, car parking, and the kind of coverage the owner wishes to have.

Why do vehicle owners need insurance?

• It is a law to carry insurance.
• Lack of insurance can lead to fines between $5000-$50,000.
• This may lead to licence suspension.
• Pay for repairs in case of accidents/collisions.
• Protects owners from liability claims if they accidentally destroy someone else's property or injure someone.

What car insurance covers:

Coverage is the total amount of money the insurance company will reimburse if the driver is involved in an accident. Every insurance covers specific things. When a driver gets into an automobile accident, they can claim benefits such as income replacement, medical care, repair costs, and more.

There are several types of coverages that the vehicle owner can receive from the insurance company:

• Mandatory insurance coverage:

By law, it is compulsory to have this form of coverage.

• Liability insurance:

This insurance covers any damage that may bring to other road users.

Liability insurance does not cover damage caused to the owner's vehicle.

Suppose the damages on another individual's vehicle cost more than the owner's liability limit. In that event, the owner must cover the extra cost.

• Accident benefits/bodily injury insurance:

This insurance covers any medical bills incurred following an accident.

• Collision insurance:

This insurance covers repairing or replacing the vehicle in case of a crash or a wreck.

• Comprehensive insurance:

This insurance covers repairing or replacing the vehicle for other causes, such as vandalism or theft.

Mandatory insurance cover:

While an individual has the liberty to choose the value of coverage, in Ontario, it is necessary to have insurance that covers the following:

• $200,000 minimum in third-party liability cover
• Statutory accident benefits that cover medical and rehabilitation expenses
• Direct Compensation - Property Damage (DC-PD)
• Income replacement
• Uninsured automobile coverage
• Death and funeral benefits
• Caregiver and dependent care benefits

How are premiums calculated?

Premiums are the monthly amounts required to pay towards insurance. The following factors contribute to the premium payments an individual is required to pay;

• Age
• Gender
• Address (some areas are more dangerous than others)
• Type of Vehicle, i.e. make and model
• Cost of your Vehicle
• Previous driving record
• Previous claim history
• The type of coverage (Insurance companies offer a variety of ranges, and one must understand and subscribe according to their needs)
• Deductible amount

How to reduce premium costs:

To reduce premium costs, explore the following options:

• Taking a Driver's Education Program can aid in lowering premiums
• Considering insurance costs before buying cars
• Driving safely: Check if an individual qualifies for discounts such as multi-car or retiree discounts

Ontario law requires that every driver must have auto insurance on the vehicle that they drive with the minimum insurance policy requirements:

• Third-Party Liability Coverage with a $200,000 minimum coverage to cover bodily injury, including death and property damage, in case of any car accident.
• The vehicle owner must present proof of insurance at the time of car registration or upon renewal.
• Upon demand, the vehicle owner must present a driver’s licence, car registration, and proof of insurance to the law enforcement agent or police.
• In the Province of Ontario, The Financial Services Regulatory Authority of Ontario (FSRA), a regulatory agency of the Ministry of Finance., regulates insurance.

For more details on FSRAO, please visit https://www.fsrao.ca/.