If you’re looking for short-term, temporary insurance coverage for your car in Toronto, you’ll have a fruitless search. Unless you consider a six-month term to be temporary, there’s no insurance product available in the Ontario market that matches the term of temporary vehicle permits.
The Need for Temporary Insurance
If you’ve bought a car to restore or work on, with no immediate plans to drive it, you’ll still need to get it to your garage from the seller’s location. Certainly you can have it towed, and that may be your only option if the car currently isn’t operable. A more affordable solution is simply to drive it back.
In Ontario, as with all provinces, all vehicles on the road are required to be registered and insured. Registration isn’t a problem, since the Ministry of Transportation offers a 10-day temporary vehicle license. You can register any vehicle up to twice in a 365-day period. The kicker is that proof of insurance is necessary to get this, or any, vehicle registration. Though it would seem logical, there is no matching 10-day temporary insurance policy to match with the registration.
There are, however, a few strategies you can use to make sure you comply with the law without spending needlessly.
Cancelling a Policy
One strategy for short-term coverage might be to take out a regular policy to cover your vehicle and satisfy the insurance requirement for temporary registration. After driving the car to your garage, you’ll simply call your insurance company and cancel the policy. The insurance company will be happy to do that for you. They’ll be happy because you’ll be obligated to pay a cancellation fee, so they get what they expect from you in terms of premiums without the obligation of covering your vehicle against damage. The shortcomings of this plan is the fact you’re not saving much money and if something happens to your car, such as theft or damage in a garage fire as two examples, your car has no protection under a policy.
Using a Conventional Policy Effectively
In Ontario, certain car insurance coverage is mandatory, both the types of insurance and the dollar amounts of coverage. Many standard insurance packages will have higher coverage amounts and additional, optional coverage. The big two options you may be familiar with – collision and comprehensive coverage.
For an example, let’s project that you’ve purchased a standard policy to cover your vehicle for six months, during which time you plan to restore it. Once the sale is completed and the car is in your garage, you can alter your policy without cancelling it.
You’re required to maintain:
- Third-Party Liability Coverage – minimum $200,000 coverage
- Statutory Accident Benefits Coverage
- Direct Compensation Property Damage (DCPD)
- Uninsured Automobile Coverage
Those items are mandatory in Ontario. However, if your insurance policy has more than $200,000 third-party liability coverage, you can have this reduced to the minimum, which will likely represent a small reduction in premiums.
Similarly, options for accident benefits coverage, such as income replacement, rehabilitation benefits, and increased death and funeral benefits can be removed from the policy, again creating the potential for a decrease in premiums.
Standard packages often have collision and comprehensive provisions, called all-perils coverage when these are combined. Removing collision coverage is logical, since the car won’t be at risk of that. Comprehensive coverage is a different issue. If someone were to break into your garage, vandalize or steal your vehicle, your comprehensive coverage might protect you. There may be value to keep this coverage in place.
There are a number of ways you can approach coverage in Toronto, under Ontario car insurance rules. One of the best ways to consider your options is using a car insurance calculator to perform what-if calculations. Using the calculator on this page, you can get fast, easy and free quotes for a number of policy scenarios. Start with your postal code and follow up by selecting the coverage you want to analyze. Use the quotes returned to compare with other scenarios and to proceed with insuring your vehicle.