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HomeCar Insurance ResourcesFull Coverage VS Liability Vehicle Insurance

Before you buy car insurance you should know what all your options are and exactly what they mean when it comes to protecting yourself, your vehicle, and your family. There is a lot to know about car insurance and what type of coverage would best suit your needs. In Ontario, the law states that all drivers must carry liability insurance, it is mandatory.

What is Liability Car Insurance?


Liability coverage car insurance is a type of coverage that your insurer would pay out toward the cost of damage you may cause to others when driving. The insurer would cover the cost of damages to other vehicles, medical costs, and even death for those that have been injured or died as a result of an accident. In Canada, accident benefits fall under the liability category. 

Full Coverage VS Liability Cost Difference

The cost of full coverage would be much higher than liability-only car insurance. Collision coverage on a vehicle is often an expensive component of car insurance. 

How Much Does Liability-Only Insurance Cost?

The cost of liability-only insurance will vary depending on your driving history, driving habits, and other factors. 

What is a Liability-Only Policy?

A Liability-only car insurance policy is coverage that excludes collision and Comprehensive coverage. However, it does include coverage for accident benefits, DCPC, and uninsured automobile coverage. 

Who is Liability-Only Insurance Recommended to?


Liability-only insurance is recommended to drivers that own vehicles that have very little value. 

Which is Better Full Coverage or Liability?

Full coverage would be a better choice as opposed to a liability-only policy if you own a vehicle that has value lower than your annual premium would be.

What Does Full-Coverage Car Insurance Include?

There are three main components to full-coverage car insurance. These include:

  • Liability
  • Collision
  • Comprehensive


The liability component of full coverage is mandatory for all drivers in Ontario. Liability coverage exists to protect others from loss of damages, personal injury, and death in the event of an accident. In Ontario, it is a requirement to carry a minimum of $200,000 in liability coverage. However, Ontario drivers opt to carry higher liability coverage especially if they:

  • Drive-in heavy traffic areas frequently
  • Drive-in areas are known for high accidents
  • Drive in a carpool with other passengers in your vehicle frequently
  • Use your vehicle for business purposes
  • Drive to the United States frequently

Liability insurance only provides coverage for damage you have inflicted on other drivers and their property, it does not cover damages to the at-fault driver. The at-fault driver must pay for their own property damages on their own. Liability-only insurance cannot be purchased for financed and leased vehicles as the lender or leasing company has a financial interest in the vehicle. If you are thinking of dropping full coverage on your vehicle you should first consider:

  • The age of your vehicle
  • The replacement cost of your vehicle
  • The wear and tear of your vehicle
  • The mileage on your vehicle


Collision insurance provides coverage for damages incurred to your vehicle if you hit another car or an object whether you are found at fault or not. If you were not at fault you would be covered under the direct compensation property damage portion of your mandatory coverage. Objects refer to:

  • A trailer is attached to another vehicle.
  • Another vehicle.
  • Objects on or in the ground such as street signs etc.
  • The surface of the ground such as a rollover.

Collision car insurance coverage is only specific to damages incurred to your own vehicle. As collision insurance can be expensive you may want to increase your deductible to allow for a lower premium.


Comprehensive car insurance coverage included a number of risks that can cause damage to your vehicle outside of collision coverage. Perils covered under comprehensive car insurance coverage include:

  • Theft
  • Attempted theft
  • Natural Disasters
  • Fire
  • Falling objects
  • Extreme weather damage such as hail
  • Vandalism
  • A riot or civil disobedience

Comprehensive coverage is coverage provided to repair or replace your vehicle up to the actual cash value of the vehicle.

Other Types of Car Insurance Coverage

File types

There are other types of car insurance coverage available for those who may require it. These options include:

  • All Perils coverage
  • Specified Perils coverage
  • Family Protection endorsement
  • Waiver of Depreciation endorsement
  • Loss of Vehicle Use endorsement
  • Accident Protection endorsement
  • Satellite Program endorsement

All Perils Coverage

All perils coverage is a combination of collision and comprehensive coverage that protects vehicle owners against theft or damage caused by a hired driver, service and repair provider, or someone else living in your home. 

Specified Perils Coverage

Specified perils coverage refers to certain perils only that are specified in your auto insurance policy such as fire, attempted theft, theft, etc. 

Family Protection Endorsement

Family protection

Provides significant extra supplement coverage to your existing uninsured vehicle coverage up to the limits of your liability coverage.

Waiver of Depreciation Enforcement

This type of coverage is often added on for brand new leased or financed vehicles and provides full replacement without any depreciation for 2 years.

Loss of Vehicle Use Endorsement

This type of endorsement can be purchased to help cover the costs of alternative transportation while your vehicle is being repaired or replaced as a result of a covered risk. 

Accident Protection Endorsement

Also referred to as accident forgiveness. Your insurers will not raise your premium for your first at-fault accident. 

Satellite Program Endorsement

This type of coverage refers to comprehensive roadside and driver assistance. Benefits include:

  • Battery boost
  • Towing
  • Fuel delivery
  • Lockout service
  • Flat tire service
  • Extrication/winch 
  • Trip planning services

Keep in mind there are limitations to the satellite program endorsement such as a maximum of 2 trip planning services and 4 service calls. 

As you can see there are many different options, add-ons, and endorsements that are available to meet every driver’s individual needs. Do your car insurance shopping online at your convenience to see all your options and receive multiple quotes. It is the most effective and convenient way to shop for auto insurance.

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