Useful tips for getting affordable car insurance coverage in Ontario
Car insurance in Canada is a big household expense. In fact, car insurance in Canada is more expensive than in many other countries. Ontario’s auto insurance rates are the highest in Canada – drivers pay, on average, more than $170 per month in premiums.
Complicating the issue is the fact that Ontario car insurance rules are not very straightforward. Ontario uses a hybrid combination of tort insurance (one party can sue the other) and no-fault insurance.
With high rates and seemingly arbitrary rules, what little-known facts about car insurance in Ontario might be useful for you? Read on to find out!
Do not take too much insurance (in some cases)
Robust coverage is good, but it comes at a cost. Think about your risks and insure accordingly. By law, your insurance policy has $200,000 in 3rd party liability, but it is recommended that you carry more than that. Aim for $1,000,000 at least; $2,000,000 is better. If somebody decides to sue you, costs can add up very quickly.
At the same time, however, it is not always necessary to get comprehensive coverage. For example, if you have an older car, you might decide not to get this coverage. Skipping comprehensive coverage on an older car could reduce your monthly insurance premiums.
On a new or leased vehicle, comprehensive coverage is usually a requirement.
Old car coverage can go UP! Classic car insurance rates in Ontario
The older your car, the less value it has, right? In most cases, but not always. There are two scenarios when older cars will have higher rates than new vehicles.
First, some older models of vehicles will be more expensive to insure because some models have a terrible insurance history. For example, they are prone to theft, so insuring them is risky.
Second, at some age (typically 20+ years) cars can be considered classic or antique vehicles, resulting in a special type of insurance coverage, such as classic car insurance or antique auto insurance. Only a few companies offer these types of car insurance in Ontario and, depending on your car and your driving habits (year-long vs. summer months only) car protection rates can be more expensive than mainstream vehicles.
Car insurance and rental cars
Many people are confused about rental vehicle insurance. You may think the insurance attached to your credit card is enough, but it’s not. It doesn’t cover 3rd party liability or damages to other people’s property. You also have to watch out for the rental agency’s collision damage waiver, which may not cover all the costs associated with an accident.
The best approach is to make sure that you have your own car insurance (if you have your own car), and to ensure that it also extends to rental cars – many insurers do that. If you don’t have this extension on your insurance, you can, for approximately $20 per year, buy a rider for your policy that covers rental cars. It is worth the cost since you’ll pay between $15-$20 per day for the same coverage from the rental agency.