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October 31, 2012
Summer RIdes, Winter Beaters & Insurance

As the winter driving season approaches we all get prepared in different ways. Some bolt on the winter tires to their ‘year round’ vehicle. Others put their only car away and purchase a Metro Pass. The rest tuck their summer ride away for the winter hibernation and pull the ‘winter beater’ out from the cob webs. Each of these scenarios requires different consideration with respect to your automobile insurance.

First, it is most important to note that your Ontario Automobile insurance policy affords you coverage even when you are not in your vehicle. Your ‘Accident Benefits’ coverage (income replacement and rehabilitative care) follows you when you are a passenger in a friend’s vehicle or even a pedestrian on the sidewalk. For that reason it is important that you understand how changing your insurance to fit your winter driving situation can affect your coverage.

For those of you who own one car and drive it all year long, your situation is straight forward and your insurance needs do not really change. The minimum liability coverage anyone should carry is one million dollars. However, with the way lawsuits have been going recently, two million dollars is recommended and not that much more expensive, maybe $20-$200/year.

If you prefer to stay off the road all together and take public transit, in the past you most likely have called your broker/agent and asked that they put ‘parking coverage’ on your laid-up vehicle. The downfall of this arrangement is that you have also inadvertently removed your Accident Benefits coverage. If you are injured when riding in, or struck by, an uninsured vehicle you could be left to foot the bill for your recovery. Rather than requesting ‘parking coverage’ ask for suspension of road coverages (OPCF 16). This endorsement essentially deletes Collision and DCPD coverage, but leaves your Liability, Accident Benefits, and Comprehensive coverage in tact. When you want to lift the suspension of coverage call your broker/agent and have (OPCF 17) applied. The only draw back to this is that the monthly withdrawals continue through the lay up period and premium saved is applied as a credit once the suspension is lifted

If you have dedicated winter and summer cars then your may think it’s safe to simply put parking coverage on your summer vehicle and road coverage on your winter beater. As the Accident Benefits coverage will continue on the vehicle carrying road coverage you’re in the clear, right? Not exactly. Your concern now is maintaining physical damage coverage on your laid up vehicle. When consulted about this situation we ask two questions:
1. Is your car currently financed or leased?
2. Where you have your vehicle parked, is there ANY chance it could be hit?

If your car is financed/lease, then usually the financing/leasing company will demand full coverage year round. The OPCF 16 & OPCF 17 endorsement may be agreeable to them, but you would need to get their written permission. If your car is in a position where it could be involved in a collision either by an out of control car sliding on ice or by another car backing out of a parking spot and you remove all coverage, leaving only comprehensive, you have no recourse for compensation if your car were damaged. You can’t sue. You can’t make a claim. That’s the law in Ontario. A few years ago we had a client who parked his sports car in his garage for the winter. He felt confident it was a safe location. After an ice storm a car coming down a hill lost control, slid up his driveway and pushed his winter car through the garage door, into his sports car. His policies (home & auto) covered the damage to the winter car and the garage door, but he was stuck with the repair bill for the sports car.

Please keep in mind that the ONLY way you are protected from hit and run damage is under your collision coverage. Applying OPCF 16 & 17 suspends this coverage. Whatever your winter transportation arrangements are, be sure to consult with your broker/agent. Completely explain your situation and ask for recommendations. That is what we are here for.