Though flooding isn’t the factor in Ontario that it is in Manitoba, for example, extremes of weather do happen, and there are places in the province that are prone to flooding. Cars in these locations are therefore subject to water damage. While car insurance is mandatory in Ontario, the minimum insurance requirement doesn’t provide for any vehicle damage coverage. To be protected against water damage, you will need to purchase coverage beyond the required minimum necessary to register your vehicle.
Basic Car Insurance in Ontario
Basic car insurance needed to register ownership and purchase license plates or renewal stickers covers four principle insurance types. These are:
- Third Party Liability – protects you from lawsuits up to the limit of your coverage. Minimum amount is $200,000, though many people opt for $1 million in coverage.
- Statutory Accident Benefits – pays medical and rehabilitation costs, regardless of fault. Coverage can also be increased over basic amounts
- Direct Compensation-Property Damage – benefits your insurance company pays under certain conditions, when another driver is at fault
- Uninsured Automobile Coverage – protects you in a collision with an uninsured or unidentified vehicle, such as with a hit and run.
DCPD and uninsured coverage can pay out amounts for damage to your vehicle, but only damage that occurs due to a collision. To have insurance protection for water damage, you’ll need to extend coverage beyond the basics.
Comprehensive Car Insurance Coverage
Beyond extending basic coverage, the most common additions to a car insurance policy are collision and comprehensive coverage. These are sometimes combined into a product called all perils coverage. Any provision for collision coverage probably won’t apply to any water damage situation. The comprehensive car insurance is where we look for that coverage.
Comprehensive coverage protects you from losses from non-collision incidents. Typically, these are things such as theft, vandalism, fire, or extreme weather. Rising water, in other words, flooding, is a covered condition. Therefore, if you have comprehensive car insurance, you would be covered against water damage as a result of vandalism, putting out a car fire or acts of nature like flooding, hail or other extreme storms.
Comprehensive insurance riders are usually subject to deductibles. This is the amount you pay before the insurance company contributes. For example, a driver with a $250 comprehensive deductible would pay $250 of the repair bill before the insurance company contributes. A motorist with a $1,000 deductible would pay that amount, and if there is more damage, then the insurer would pay. Low deductibles mean higher insurance premiums and vice versa, since it changes the amount of burden the car owner assumes.
Specified perils or All perils coverage will usually also cover any of these situations where water damage is an issue. Discuss your coverage with your insurance company or broker, and read your car insurance policy to be aware of what damage is and is not covered. Gaps in coverage can usually be addressed promptly and affordably. You cannot add coverage after an incident occurs. The Financial Services Commission of Ontario publishes a guide to help you understand car insurance coverage.