Why auto insurance is required by law in Ontario (2024)

FAQs

Why auto insurance is required by law in Ontario? ›

Auto coverage provides protection for personal injury and property damage. Across Canada, the minimum coverage you are required by law to purchase is also referred to as mandatory coverage. Where and how you can purchase auto insurance coverage is set out by provinces and territories.

Why is car insurance mandatory? The concept of the mandatory auto insurance law protects all individuals that are involved in a motor vehicle accident, some of which may otherwise not be able to afford costs associated with healthcare and rehabilitation.

It is an offence under the 'Compulsory Insurance Act of Ontario'. If you get caught driving a vehicle, knowingly, without insurance you will be fined and can face other penalties. You can face a fine of anywhere between five thousand to twenty-five thousand dollars for your first offence.

Before we jump in, it's important to remember that it's illegal to drive without insurance whether the car you're driving is yours, or it's borrowed. In Canada, it's the law that you must drive with a valid insurance policy to protect you, as well as everyone around you.

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The Compulsory Automobile Insurance Act (CAIA) requires an operator of a motor vehicle to carry an "insurance card" to prove that he/she is insured under a contract of automobile insurance.

Penalties. While driving without insurance is not an offence under the Criminal Code of Canada, it is a serious provincial offence. The penalties for driving with no insurance in Ontario are as follows: a fine of between $5,000 and $25,000 on a first conviction.

Auto coverage provides protection for personal injury and property damage. Across Canada, the minimum coverage you are required by law to purchase is also referred to as mandatory coverage. Where and how you can purchase auto insurance coverage is set out by provinces and territories.

About 8.5 million were on Ontario roads and it has been estimated that two percent of these drivers lacked the necessary insurance. That may not seem like much, but that would mean there are 170,000 people driving without coverage in this province.

The Financial Services Regulatory Association of Ontario estimates the average Ontario car insurance premium to be $1,796 annually or $149.67 monthly as of October 2023. According to the General Insurance Statistical Agency, Ontario drivers paid an average of $1,662 annually for car insurance or $139 per month in 2022.

You could also get sued if you don't pay. Police will likely charge you with driving without car insurance. You could face a hefty fine, license suspension, vehicle impoundment and even jail time, depending on your province. Once you buy car insurance, you will probably pay much higher rates for coverage.

Can you drive someone else's car if you don't have insurance Ontario? ›

Yes, you can drive someone else's car in Ontario. When they lend you their vehicle, they also lend you their insurance coverage. As long as you have permission, a valid license, and drive responsibly, you can borrow it.

If you are buying your first car, or you buy a car after having cancelled a previous policy, you must get insurance for it before you drive it home, according to the Edmonton Community Legal Centre.

Though most people looking to buy cars are licensed drivers, some may wish to purchase a vehicle despite not being able to drive it. Though there may be valid reasons to do this, in Ontario, you will generally need a driver's license to purchase a vehicle.

In Ontario, car insurance became mandatory in 1990 when the Compulsory Automobile Insurance Act was introduced. Should people choose to drive without insurance, a maximum fine for a first conviction is set at $25,000 and a maximum fine of $50,000 is set for a subsequent conviction.

Collision coverage is optional. However, it may be required if you lease your vehicle or to meet financial conditions from your auto loan lender. Adding collision cover will increase your premiums. However, choosing a higher deductible can lower your rates.

There are mainly three types of car insurance in Ontario: liability, collision and comprehensive. Let's start with a basic understanding of each. Third-party liability coverage is your basic level of car insurance coverage. It is mandatory all across Canada.

It is illegal not to have insurance on a vehicle you're using on public roads in Canada. The penalty is usually a fine, but this varies from province to province. As well as being illegal, not having insurance is a huge risk to your financial security and your future.

It is illegal to drive without car insurance in Canada. If you own a car, you must get insurance coverage. If you regularly drive a car that belongs to a relative or friend, you should make sure you're listed on their car insurance plan.