Experts warn drivers to weigh options ahead of Ontario’s auto insurance changes
Experts warn drivers to weigh options ahead of Ontario’s auto insurance changes | Insurance Business Canada
Motor & Fleet
Experts warn drivers to weigh options ahead of Ontario’s auto insurance changes
Risk may outweigh potential benefits
Motor & Fleet
By
Mika Pangilinan
Upcoming changes to Ontario’s auto insurance rules promise potential savings. However, experts are telling drivers to carefully weigh their new option, stating that the risk it poses might outweigh potential benefits.
Beginning January, Ontarians will be allowed to opt out of direct compensation property damage (DCPD) coverage, which safeguards vehicle owners from expenses linked to collision-induced damages when they’re not at fault.
Daniel Ivans, an insurance expert with Ratesdotca, said foregoing DCPD coverage could help drivers save up to 20% on their payments.
“In some cases, you could save 5 or 10 or even 20%,” Ivans told CTV News Toronto. “It really depends on the vehicle you are driving and the company you are insured with.”
Despite the potential for savings, Anne Marie Thomas of the Insurance Bureau of Canada (IBC) cautioned drivers to consider what they would be giving up by opting out of DCPD coverage.
Thomas, who serves as IBC’s director for consumer and industry relations, said DCPD coverage extends beyond vehicle damage protection.
Without DCPD coverage, expenses covered by insurance in case of a collision would have to be shouldered by the driver. This includes paying for things like tow trucks, vehicle storage, or rental cars which would now fall on the driver in case of a collision.
According to Thomas, drivers must carefully evaluate their risk tolerance and overall comfort level with these potential consequences before opting out of DCPD coverage.
Ontario is implementing the rule on DCPD coverage as drivers in the province pay some of the highest insurance premiums in Canada.
CTV News cited a May report by Ratesdotca indicating that insurance premiums in Ontario have gone up by around 12% in 2023 versus 2021.
Premiums now average at about $1,766, according to the report, but they could exceed $2,000 in the Greater Toronto Area.
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