We are following up on our previous post regarding why auto insurance is essential since high risk auto insurance drivers stand to incur huge costs if their vehicle is damaged or destroyed in an accident or if it catches on fire or stolen. Another significant consideration is simply the threat of a possible lawsuit from the other car owner that you may be in an accident. Today many lawsuits are filed due to the ease of filing and the number of personal injury lawyers creating an increasingly litigious society. Many defendants are sued by plaintiffs in situations when there may not be any clear liability causing lawsuits to be expensive and complicated.

Some plaintiffs decide to use as they believe that they have a high probability that they will be able to recoup their medical or disability bills, while others sue in an attempt to commit insurance fraud even though it is against the law in every Canadian province. Without insurance, the defendant has to personally pay for the legal costs as well as any additional expenses due to such lawsuits. Such lawsuits despite being unfounded have a substantial cost even if the dependent may be exonerated as they still require significant time and energy. If the defendant has high risk auto insurance in Ontario, the defence costs would be covered regardless of the outcome of the lawsuit.

Key Auto Insurance Terms

Property Damage Liability Insurance:

Insurance protection against liability for damage to the property of another person or organization. This protection includes the loss of the use of the property as well.

Bodily Injury:

A term used in auto insurance policies as well as liability policies that means physical injury to persons. This injury includes sickness, disease, mental injury, shock and or death.


The person or organization which could include companies and other non-profit organizations that are covered by an insurance policy. In some policies, the terms are defined to limit the insurance coverage or broadly defined to include various expanded coverage.

With Auto Insurance becoming more prevalent as of the 1930s the need for the coverage began to evolve to cover the liability of the owners and the driver’s bodily injury, passengers, pedestrians involved and any other third party as well as the damage to the car itself. This form became a standard defined in what is now called a Standard Automobile Auto Policy Owner’s Form or SPF1.

This form evolved continuously throughout the decades to meet the needs of the changing driving landscape and vehicle types and technological innovations. This form is the forerunner of all other automobile insurance policies and today it may be named or numbered differently in various provinces or territories but being generally the same throughout Canada. The essential elements of the coverage are the same, and they include:

  • Third Party Liability
  • Direct Compensation Property Damage
  • Physical Damage
  • Accident Benefits

Under Canada’s Tort Law when people are found to be negligent, they are found to be responsible for damages to other’s people’s property like their cars. These other people look to other negligent parties or their insurance companies for recovery of costs that can make them whole, specifically meaning costs of repair or additional liability costs such as medical expenses.