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Which Car Insurance is Mandatory in Ontario? (What To Know)

Which Car Insurance Is Mandatory in Ontario? (What You Need To Know)
Curtis Killen

As president of KBD, Curtis aims to simplify insurance for his clients. He’s helped lead KBD to become one of Canada’s fastest 400 growing companies according to the Globe & Mail.

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Car insurance is mandatory in Ontario, but the kind you should get depends on your specific needs. Here’s what you should know about it.

Is insurance always mandatory?

That really depends.

Some types of insurance are mandatory, and others are optional.

And sometimes deciding what to insure is completely up to you.

We won’t judge. 😉

Mandatory Car Insurance Ontario | KBD Insurance

But today we’re talking about car insurance.

And car insurance is compulsory insurance coverage in Ontario.

Keep scrolling to learn the mandatory and optional coverages, as well as the minimum car insurance required in Ontario.

Or just give us a call.

We’re happy to answer any questions.

Is car insurance mandatory in Ontario?

Yes, it’s mandatory.

You have to be insured in order to legally drive in Ontario.

But one important thing to remember is that car insurance typically follows the car, not the person.

Here’s an example:

Say you don’t own a vehicle, but you borrow your friend’s car on moving day.

In this case, your friend’s insurance will typically cover the car in an accident, even if you were the one driving.

So you don’t have to have your own car insurance policy if you only drive very occasionally – as long as the car that you’re driving is insured.

But if you were constantly borrowing your friend’s car, then you might have to be added to their policy, or get your own.

The same goes for renting a car – you need to have car insurance that covers the rental.

You can check out our complete guide on rental car insurance here.

Keep reading to learn the different types of car insurance in Ontario, plus which ones are mandatory.

Or you can give your car insurance broker a call to find out what would work best for you.

Which car insurance is mandatory in Ontario?

There are four types of mandatory car insurance in Ontario.

These will automatically be included in any car insurance policy you purchase, but the coverage amount will vary depending on your unique situation.

They include:

  • Third party liability
  • Statutory accident benefits coverage
  • Uninsured automobile coverage
  • Direct compensation – property damage (DCPD)

Again, the amount that you’re covered for with each of these insurance types will vary.

For example, in Ontario, all drivers must carry a minimum of $200k in liability coverage.

But many people opt to get $1M plus in coverage because $200k often isn’t enough to fully cover them in a major accident involving vehicle damages and/or bodily injury.

The price difference for the additional liability coverage is also super affordable; the difference between $200k and $1M in liability can be as little as $25/year.

Worth it!

So after the mandatory coverage amount, additional coverages are up to you.

That said, there are other instances when car insurance coverages are mandatory that aren’t government regulated.

Case in point: If you lease or finance your vehicle, the lender will ask you to carry both collision and comprehensive insurance.

Not sure what kind of car insurance coverage you need?

Check out the guide on buying first time car insurance in Ontario, or give us a call directly.

What’s the minimum car insurance required by law in Ontario for motor vehicles?

Whether you’re trying to save or you’re just not that concerned about damages to your car, you might want to lower your car insurance premium.

So, what’s the minimum car insurance required in Ontario, you ask?

One way insurance is a bare bones car insurance coverage you can get in Ontario.

It includes all of the mandatory types of car insurance we mentioned above.

The difference is that with one way insurance, you only pay for the minimum amount on each type.

To note: One way insurance only covers you for physical damage made to the vehicle in non-responsible accidents, and if you cause bodily injury to someone else.

Make sure that you check in with your car insurance broker so that you fully understand what your policy covers.

Surprises are no fun when it comes to insurance claims.


Let’s do a quick recap.

You now know that car insurance is mandatory in Ontario.

Here are a few things to remember when insuring your vehicle:

  1. Mandatory types of coverage are automatically included in every car insurance policy
  2. One way insurance is the minimum coverage you can purchase
  3. Comprehensive and collision insurance are optional coverages
  4. You are required to carry comprehensive and collision insurance if your lease or finance your car

And that’s a wrap.

Still have questions? Give your Ontario insurance broker a call.

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