The Rural Voice, 1992-08, Page 44Professionally Speaking
What does your insurance mean?.
BY ROBERT COLEMAN
Everyone who owns or drives a
car must have auto insurance, but
few people really undcrstand what
they have purchased. "No Fault
Auto Insurance" has been in force
in Ontario since June 1990. What
docs "No Fault" mean? What are
the components of an auto policy?
A "drivers" policy in Ontario has
three main sections — Third Party
Liability, Accident Benefits and
Loss or Damage to the Insured
Vehicle.
Part A or Third Party Liability
provides financial protection for the
driver or owner of the car against a
civil lawsuit arising out of their
negligent or "at fault" operation of
the car which has caused an
accident resulting in serious "bodily
injury" or "property damage" to an
innocent third party. Property
damage does not mean nor does it
include another automobile. The
innocent party will have a "No
Fault Property Damage" or "Direct
Compensation — Property
Damage" claim for the damage to
their auto paid for by their own
insurance company without
consideration of a deductible. The
"at fault" driver (or owner) will file
a collision claim with their own
insurance company and must carry
collision coverage to be
compensated.
Section B or Accident Benefits
provides for payment of medical
costs, rehabilitation expenses,
funeral expenses, death benefits,
cost of special care and weekly
income replacement for people
injured or killed in an auto accident
regardless of fault. Injured persons
go to their own insurance company
for this compensation even though
they might be injured while riding
in another person's auto.
Policyholders may at their option
purchase higher levels of coverage
for three types of Section B
coverage — income replacement,
funeral expenses and death benefits,
and the primary caregiver benefit.
The premium cost of these
increased benefits is nominal and
40 THE RURAL VOICE
you should ask your agent or broker
to review them with you. They can
be easily added or increased at any
time.
Section C or Loss of or Damage
to the Insured Automobile
Section provides protection for the
owner of the auto for physical
damage or loss to the insured
vehicle subject to a deductible
amount. This part of the policy has
four subsections.
1."All Perils" is an all inclusive
coverage for all types of damage or
loss.
2. "Collision" coverage provides
only for damage caused by collision
with another object or upset of the
vehicle. Many owners of older
vehicles do not purchase this
coverage.
3. "Comprehensive" coverage
provides for damage caused by all
types of loss other than collision
damage — theft, breakage of
windshields, vandalism, etc. subject
to certain policy exclusions. A
typical policyholder will purchase
both collision and comprehensive
coverage. This will allow them to
have a higher deductible on
collision — perhaps $250, and a
lower deductible on comprehensive
— perhaps $50. In fact all perils
coverage equals collision coverage
plus comprehensive coverage.
4. "Specified Perils" coverage
provides for protection from certain
named perils or kinds of damage —
fire, lightning, theft, windstorm,
earthquake, hail, explosion, riot etc.
This coverage is less expensive
than comprehensive since coverage
is narrow and defined.
Many policyholders today are
increasing deductibles under
Section C to $250 and $500 for
collision and to $50 or $100 for
comprehensive coverage. This can
result in considerable premium
savings. Ask your agent or broker
to review the difference in premium
cost.
In addition to the three main
sections of the policy, over thirty
special endorsements are available
to address the specific needs of
drivers, and certain vehicles. Some
such endorsements are — loss of
use, limited waiver of depreciation,
family protection endorsement, and
permission to rent or lease.
All auto insurance policies are
uniform in Ontario as detailed by
government legislation and
regulations. Therefore if you are
shopping for auto insurance quotes
the only items which will vary
between companies is price and
service — not coverage.
Auto insurance may seem very
complicated at first, but it can
become more familiar if you ask
questions of your broker or agent.
Don't wait until after you have a
claim. Ask now — it's your policy
and your money!O
Professionally Speaking is a monthly
column featuring a different expert
each month. Robert Coleman, AJ.I.C.
is Manager of Blanshard Mutual In-
surance Company, St. Marys, Ontario.
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