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You have finally got a car and cannot wait to drive out on the roads. Before doing so, it is also essential that you ensure at least basic coverage on your car as per the law in Ontario. If pulled over for driving without insurance or proper coverage, you may end up paying dearly. You may also want to add some optional coverage for better protection. In Ontario, there are four kinds of coverage that are considered mandatory for a car insurance policy. This includes third-party liability, statutory accident benefits, DC-PD, and uninsured automobile coverage.

What Is Third-Party Liability Coverage


This coverage will pay for damages that you cause to others in a car accident. In case you injure or kill someone in an accident. Or caused damage to someone’s property, the legal expenses could be a lot more than you could afford. You may not drive in Ontario without third-party liability coverage. By law, you are required to carry at least $200,000 in liability coverage. You may not operate a vehicle if you don’t. It is important to note that this limit is for any one incident. You may try to increase this limit.

The reason is that an accident may cause property damage and or bodily injury. But if both happen, then there is a cap of $10,000 for property damage claims under this coverage. It is highly advised to have liability coverage of up to $1,000,000 or $2,000,000 as the legal costs are steep. The settlement could be in the number of millions of dollars and beyond an average person’s means. It is also vital to note that this coverage cannot be used to claim damages due to vandalism or theft by a third party.

What Is Statutory Accident Benefits Coverage


This coverage pays for benefits when you are injured in an accident. It does not matter as to who was at fault for the accident. You may claim for medical, caregiver, rehabilitation expenses, etc. Since you may not work for some period, you may also claim income replacement, housekeeping, and non-earner benefits. The limits for these can also be increased. There had been some updates to this coverage as per the FSCO reform in June 2016.

The most important updates are as mentioned below;

  • The benefit of medical, rehabilitation, and attendant care for non-catastrophic injuries have been combined into one. The benefit amount has now been reduced to the single limit of $65,000 instead of $86,000.
  • For medical, rehabilitation, and attendant care of catastrophic injuries, the benefit has been combined into one. The benefit amount has now been reduced to the single limit of $1,000,000 instead of $2,000,000.

Direct Compensation – Property Damage (DC-PD) Coverage

The Direct Compensation Property Damage coverage first started in Quebec way back in 1978. This coverage was put in place mostly for dealing with property damage auto claims. The DC-PD coverage was started in Ontario in 1990. Since then it has been mandatory coverage on the auto insurance policy. This coverage pays for damages to the car, its contents, and for not being able to use the car or its contents. The contents loss can be claimed only if it was not goods being transported for a fee. Even if someone else is at fault for the damage, you may claim under this coverage from your insurer. That is the reason it is called direct compensation.

How Does Claims Work Under A DC-PD Coverage

You do not have to deal with the other party or their insurer. But it is important to note all relevant details of the other party and the vehicle involved in the accident. Usually, there are no lawsuits in such a scenario. And the claims procedure is very straightforward. In most cases, there are no deductibles for such claims. But there may be exceptions if the insured agrees to it.

The fault determination is done by the insurance company. The claim amount is based on the ratio for which the insured is not at fault. As an example, if the insured is at fault for 50% then the claim will be settled for only 50%. If the insured is not at fault for 100% then the DC-PD claim will also be settled for 100%.

In order to qualify for a DC-PD claim on the auto insurance policy it is required to meet the following conditions:

  • The incident must happen in the province of Ontario
  • At least 1 other motor vehicle must be involved in the accident
  • At least 1 of the other motor vehicles involved must be insured by an Ontario licensed insurer. Or the insurer must have signed up with FSCO to provide this coverage as per the special agreement. This can be enforced only in Ontario and between 2 participating insurance companies.

In case, any of the above terms are not met, you may claim under collision coverage if you have one. If you don’t then the only option would be to claim from the other party who is at fault.

Uninsured Automobile Coverage


When you are involved in a hit-and-run accident, you may be injured and worried about claiming the damages. The uninsured coverage helps to pay for any damages or injuries to you or your family caused by an uninsured driver. This cover also pays for damages to the vehicle caused by an identified driver who has no insurance. This coverage is mandatory as per section 265 of the Insurance Act.

In the case of a hit-and-run accident, if another involved party has no insurance, your insurer has to pay you up to $200,000. The injured driver may not claim any benefit through third party or motor vehicle liability coverage if there is a claim under DC-PD. The claim amount is based on the lesser related to two options. The first option is the statutory limit set as per the province of residence of the injured party. The second option is the statutory limit set as per the province where the accident occurred. Usually, the claim amount allowed under this coverage never exceeds $200,000.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.