Each province and territory has passed a law that requires vehicles
legislated in its jurisdiction to be covered by government or private auto
insurance. This compulsory aspect of automobile insurance has contributed to
making it one of the major types of insurance coverage in Canada. Legislation at
the provincial level also specifies in detail the content of auto insurance
In Ontario, all automobile owners are required to have at least $200,000
coverage for third party liabilities' compensation. Due to changes of population
and the legal environment, the numbers of vehicles and claims increased
dramatically in the last decade. Minimum coverage is no longer enough for the
general situation; instead a $1,000,000 liability coverage is common.
Major Elements of Automobile Insurance Policy
1. Third Part Liability is the
coverage that will pay for loss or damage or bodily injury that the insured
causes to a third party for which he or she is legally liable. Liability suits
are allowed for non-pecuniary (non-monetary) losses when the injuries suffered
meet the threshold, i.e. the injured person has died or has sustained permanent
serious disfigurement or permanent serious impairment of an important physical,
mental or psychological function.
2. Direct Compensation Property Damage
is the coverage where the insured is entitled to recover damages to the insured
automobile, not from a responsible third party's insurer. When the insured is
involved in an automobile accident, whether one is at fault, not at fault, or
partially at fault, one will only deal with his own insurer. The intention is
clearly to move away from an adversarial situation.
Accident Benefits are paid under
an Ontario automobile policy regardless of fault. Any passengers injured during
the accident will be insured under this provision.
Loss of or Damage to the insured automobile
- indemnifies the insured against direct and accidental loss of or damage to the
automobile and its permanently attached equipment. There are 3 coverages in Part
iii. Specified Perils
Uninsured Motorist Coverage is the
coverage for damages to the insured auto and its contents or bodily injury
arising out of an auto accident in a situation where the insured is unable to
obtain payment from the person who is uninsured or the vehicle is unidentified
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Homeowners Policy :
For most families, their home is the most expensive asset they will ever own.
Accordingly, it is important to make sure that this valuable asset has adequate
insurance coverage. A homeowner's policy usually covers the following items:
2. detached private structure
3. personal property
4. additional living expenses
Homeowner's policy also addresses personal liability if a member of your
family should in the eyes of the law, negligently injure someone or damage
someone's property and also to provide medical expenses should someone be
injured on your property. A visitor who falls down and is injured while walking
up your driveway may sue you for their medical expenses and for pain and
The various forms of property policies differ either by the type of property
insured or by the perils insured against.
Condominium Unit Owners Policy
A condominium unit owner owns his unit, i.e. apartment or townhouse. The main
coverage is property content, additional living expense and personal liability.
However, the building structure and the common area are insured under the
condominium corporation master policy. The monthly maintenance fees collected
from the unit owners generally fund the premium of the master insurance policy.
An insurance contract covers the property of an apartment dweller. It is very
similar to the Condominium Unit Owner Policy whereas it is applicable to tenants
For the individual who rents residential space to others in a building which
he or she does not reside. It mostly covers the building and third party
Miscellaneous - Catastrophe Liability Policy
A comprehensive liability policy that covers in excess of primary limits of
the basic liability policies such as automobile, owner's landlords' and tenants'
liability. It is also called the excess liability or umbrella liability policy.
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Running a business entity not only being subjected to risk on itself, but is
also facing the risk of loss to or arising out of real property, legal
liability, contracts, death of key employees, etc. One way of protecting the
business from the above risk is to have proper business insurance. There are two
major forms of business insurance:
1. Property Insurance: It protects
the business premises, goods, stock inventory, machinery and equipment,
furniture and fixture, and raw material etc., against fire, theft and accidental
2. Liability Insurance: It mainly
covers any legal liability or damages due to negligence of the insured entity.
Travel insurance is designed to
supplement the coverage that the traveler requires in addition to Ontario
Hospital Insurance Plan (OHIP)> The law governing OHIP states that private
carriers cannot compete with the Government plan and therefore they can only
provide coverage in those area where the government has:
1. Been exhausted and ceased to pay
2. Does not provide coverage
insurance is mainly for visitors to Canada and persons awaiting
provincial health care. It pays for reasonable, necessary and customary
expenses, up to the Sum Insured, while on a stay in Canada. Eligible expenses
are paid for acute emergency hospital, unexpected emergency medical, or other
covered expenses, due to injury or sickness.
Life insurance products are currently designed
to provide a broad spectrum of financial services such as family protection,
estate building and protection as well as funding of tax liability and business
1. Term Insurance
is designed as low cost temporary protection. It is usually renewable in terms
of 5, 10 or 20 years up to age 75 or 85, with a guaranteed death benefit which is
tax-free, and premium guaranteed for each term. However, premium will increase
upon renewal of each term. There is no cash value in the policy. Typical 10 year
term premium for a male, age 30, non smoker for the first 10 years is $260 per
year (for $250,000)
Insurance is made up of both an insurance and an investment
component. There will be cash value built up in the policy which can be borrowed
against. Traditionally, it is available in the form of Whole Life with fixed
investment and guaranteed level premium, cash value, and a death benefit.
Nowadays, a new form of permanent insurance known as Universal Life
is very popular because the investment component is flexible and diverse.
Universal Like also gives the insured a choice from the various types of investment,
such as a guaranteed
investment fund or equity, bond, or money market funds. However, fund values or
premium will not be guaranteed.