Car Insurance and Home Insurance in Ontario

Car insurance and home insurance in Ontario has become very competitive over the years. Insurance companies offer discounts of all kinds to keep you insured through them now and for the years to come.

Some insurance brokers have advised that they do not make a profit on car insurance or home insurance for at least 3 years. I questioned the reason for profit and since insurance brokers only receive a small percentage of the premium charged they count on at least 2 policy renewals to break even.

You may ask yourself, why is my car and home insurance policy so high?

Within the car insurance policy itself there are forty five different insurance questions which help a broker or agent obtain the answers required to quote a car insurance rate properly. The application deals with the following coverages:

Legal Liability  Provides coverage for you and other persons if someone else is killed or injured or if there is damage to another partys property.

Accident Benefits  Provides benefits that you and other injured persons are entitled to receive if injured or killed as a result of a car accident.

Uninsured Automobile  Provides coverage for you and other insured persons killed or injured by an uninsured motorist. There is a deductible applicable.

Direct Compensation  Car insurance policies offer this mandatory coverage under certain conditions to help protect ones automobile and personal property against other drivers deemed to be at fault. There is an optional deductible.

Loss or Damage  This is the section that provides you with optional coverages to cover your automobile subject to a deductible. The legal definitions as per the Ontario Automobile Policy is as follows:

Specified perils  fire; theft or attempted theft; lightning; windstorm; hail or rising water, earthquake; explosion; riot or civil disturbance; falling or forced landing of aircraft or parts of an aircraft; or the stranding; sinking; burning,; derailment or collision of any kind of transport in; or upon which the described automobile is being transported.

Comprehensive  Covers a described auto against loss or damage other than claims covered by collision or Upset, including perils listed under specified perils, falling and flying objects, missiles and vandalism.

Collision or Upset  Covers damage when an automobile is in a collision or with another object or tips over

All Perils  Combines the Collision or Upset and Comprehensive coverages.

The most expensive part of an automobile policy is the accident benefits portion. What are accident benefits and how do they work?

Accident benefits have been on auto insurance policies dating back to the 1960's era. The need for accident benefits was created in order to pay medical and other reasonable expenses arising from an injury sustained from an automobile accident. Accident benefits are for nominal amounts only and are not intended to indemnify victims because of their injuries.

The policy in general will cover the following:

The insurance company's responsibility is to pay for reasonable medical payments incurred within 2 years in Ontario (4 years in other provinces). The types of medical payments covered are medical, surgical, chiropractic, dental, hospital, professional nursing and ambulance service. In addition to medical expenses listed here, the insurance company will cover reasonable expenses related to other services and supplies essential to treatment or rehabilitation.

Consumers are affected by car insurance and home insurance premiums when an agent or broker does not shop on a customers renewal. Consumers tend to think they are getting the best price insurance renewal possible. The main idea; is insurance companies increase and decrease their rates every year, so it is important for consumer's to stay on top of their policy renewal price.

Tip of the Month: Beware of claims; if involved in an accident never admit guilt. Insurance companies may rule in your favour. The reason being is the insurance companys work with a set of fault determination rules. You could be admitting you were at fault when it was the other drivers fault totally.

Dave Melanson is the author of http://www.carandhome.ca and has been working in the insurance industry for more than 14 years as an agent and a broker. Dave's areas of expertise include: auto, home, boat, motorcycle and commercial insurance. Dave has consulted with more than 140 insurance brokerages and has been interviewed on insurance related topics with CBC news.