In Ontario, obtaining insurance is essential to the car purchase process. Ownership, licensing and insurance have an intertwined procedure that ensures all cars on the province’s roads are meet safety and insurance standards. How you purchase your vehicle doesn’t change your insurance situation from a provincial standpoint. There is another key factor that does.

Mandatory Car Insurance Requirements in Ontario

Ontario has a standard auto insurance policy that all cars must carry. This policy specifies $200,000 in liability coverage among its provisions. Though not mandatory, it’s prudent to increase this coverage to $500,000 or $1 million. The cost of lawsuits following major accidents can easily surpass $200,000. There are provisions for accident benefits, amounts for medical care and rehabilitation that surpass provincial health insurance coverage. Accidents occurring under certain situations settle through the driver’s own insurance. This direct compensation funds through the standard policy. Unidentified motorist protection rounds out the mandatory coverage.

Financing and Insurance


No matter how you buy your car, mandatory coverage applies. With the except of the direct compensation portion, none of the standard auto insurance policy covers damage or loss to your vehicle. That’s optional coverage from the government’s perspective. Collision and comprehensive protection are options that a driver chooses to add. A motorist attempting to keep premiums under control could drop these parts of the auto insurance policy entirely. This is risky, since the driver is then solely responsible for repair or replacement costs.

Still, this remains an option for the driver who owns a vehicle outright. When a motorist finances the purchase of a car, matters may be quite different. The bank or financial institution funding the car purchase may have a very definite say about insurance choices for the new car. Particularly in the early days of a car’s purchase, it’s the bank that has the greatest say in the car’s financial life.

It’s common for a financial institution to place conditions on car loans that include particular insurance coverage. Collision and comprehensive coverage assures that the new purchase has protection against incidents so that the loan continues to cover a car, rather than a heap of scrap metal. Without coverage in place, the loan contract could be voided and the driver responsible for immediate repayment.

Special New Vehicle Endorsements

In addition to loan requirements, many owners want protection of the new vehicle experience. Many insurers offer special insurance endorsements that limit the effects of depreciation or ensure new car replacement in first several years of a car’s life. While this isn’t mandatory, it ensures that a motorist isn’t stuck with a large car loan, but an insurance settlement that doesn’t cover the full amount to replace a car after an accident.

If you’re looking for auto insurance for a new vehicle or simply comparison shopping at time of renewal, Ratelab’s car insurance calculator is your best bet to ensure low car insurance premiums. Simply enter your postal code below and complete the pages that follow with your personal data and car insurance requirements. Ratelab’s calculator sorts through dozens of car insurance providers to pinpoint your best deals.