Ontario Automobile Insurance
Mandatory coverage
Ontario's standard auto policy, OAP 1, is a package. Every vehicle driven on a highway must carry third-party liability of at least $200,000, statutory accident benefits, uninsured automobile coverage and direct compensation for property damage (DCPD). Collision, comprehensive, all perils and increased limits are optional. The policy is read with the Insurance Act, the Statutory Accident Benefits Schedule (SABS) and the Fault Determination Rules.
How claims flow
- Accident benefits are no-fault: the insured's own insurer pays specified medical, rehabilitation, income replacement and other benefits, subject to limits, deductibles and the minor injury guideline.
- DCPD pays damage to the insured vehicle when another driver is at fault, to the extent of that driver's fault; the insured deals with its own insurer, not the at-fault driver's insurer, for that property damage.
- If the insured is at fault, collision coverage responds, subject to the collision deductible. Fault is assigned under the Fault Determination Rules, not by roadside argument.
- Uninsured automobile coverage responds to unidentified or uninsured motorists, within policy terms.
- The Facility Association is the residual market for risks that cannot obtain voluntary coverage.
Worked example
A driver is stopped at a red light and is rear-ended. The rear-ending driver is 100% at fault under the rules. The stopped driver claims DCPD from its own insurer for vehicle damage, pays the applicable DCPD deductible, and claims accident benefits from its own insurer for injuries. The stopped driver does not need to sue the other driver to get the vehicle repaired. If the stopped driver had no collision or DCPD coverage because the vehicle was uninsured, the analysis changes.
Traps
The legal minimum liability limit is $200,000, not $1,000,000. DCPD is not fault-based payment by the at-fault driver's insurer. Accident benefits are not paid only when the insured is not at fault. Collision is not mandatory. A police report does not determine fault for insurance; the Fault Determination Rules do.