Auto Insurance Glossary

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Liability limit
Liability insurance provides coverage for you if someone else is injured or killed. It also provides coverage if their property is damaged as a result of an automobile accident. Ontario has a "no-fault" car insurance system. This means that if you're injured or your car is damaged, then you deal with your own insurance company, no matter who is at fault. You don't have to go after the at-fault driver for compensation.

If you are legally responsible for an accident, then you are also legally responsible for the damages. If you are uninsured, you will be charged with driving without insurance, and you may be fined. You may also have your driver's licence suspended until you have made satisfactory arrangements to repay the owing amount.

Licence class (Alberta and the Maritimes)
Class 7 is the first licence level. Sometimes it is called a "learner's permit". This is a restricted licence that allows you to drive only if you have another fully licenced driver (Class 5) in the car with you.

Class 5 is a regular unrestricted licence.

Licence class (Newfoundland)
Newfoundland has 3 types of licence classes for private passenger vehicles. Class 5 Level 1 is the first licence level. It is a highly restrictive licence for those who have passed an initial driver's test. At the end of 8 or 12 months, if the driver has passed a driver's training course, another road test is required.

Class 5 level 2 is the second licence level. It is less restrictive and is held for 12 months.

Class 7 is a regular unrestricted licence. You are promoted to this level automatically if you have held your Class 5 Level 2 licence for 12 consecutive months without receiving any suspensions.

Licence Class (Ontario)
Ontario has 3 types of licence classes for private passenger vehicles up to 4,500 kilograms. G1 is the first licence level. It is a highly restrictive licence for those who have passed an initial driver's test. At the end of 8 or 12 months, if the driver has passed a driver's training course, another road test is required.

G2 is the second licence level. It is less restrictive and is held for a minimum of 12 months and a maximum of 24 months. A road test is required at the end of this period.

G is a regular unrestricted licence.

Licence suspension
Your driver's licence could have been suspended for a number of reasons:
  • Driving under the influence (alcohol or drugs)
  • A criminal code conviction (e.g. dangerous driving)
  • Failing to pay outstanding fees or fines
    If you have a suspension on your record in the last 3 years, it may affect your insurance rates.
  • Loss of use (No. 20)
    Say you're involved in an accident and your car is damaged. Loss of use coverage pays for a rental car or alternate transportation while your automobile is being repaired.
    Years licenced
    One of things that determine your premium is how long you've had your licence. Generally, the longer you've been driving, the lower your premium (unless of course, you have a poor driving record).