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What is Third-party Liability?

In Ontario, third-party liability insurance as a government mandated auto insurance coverage that protects you as an Ontario driver in the event that you are sued (or face the potential of being named in a lawsuit.) Most people don’t have an extra 1 or 2 million dollars lying around to cover lawyer fees and court appointed damages as a result of an auto accident. If one is deemed negligent (responsible for the cause of the accident for something they did or didn’t do), this coverage would respond.  Reasons would be sued as a result of an auto related claim would be due to physical injury of a 3rd party or their personal property such as their vehicle, pet. Third party property damage can include a municipally owned traffic guardrail or traffic sign as well. Some may  ask how does auto liability insurance coverage work? It’s fairly simple. Let’s say you are driving home from work on a cold winter day and when turning onto your street you hit a patch of black ice and slide into a pedestrian and then hit a neighbour’s fence. The bodily injury of the pedestrian and damage to the fence would be covered under the 3rd party liability insurance portion of the auto policy. The minimum limits required in Ontario is $200,000 but I would recommend that you have at least $1,000,000 third party liability limits since $200,000 is oftentimes satisfactory. “How much 3rd party auto liability insurance should I have” is a question I often get from drivers that I quote or insured currently. I always state at the end of the day that it’s your decision. Keep in mind that if you are sued by an US driver or named in a lawsuit while driving in the united states, an Ontario auto policy only responds in Canadian dollars so even a $2,000,000 limit may have a shortfall. 

If you would like to have a conversation to discuss your liability limits, please give me a call at 519-393-3246. To get a quote in the next couple of minutes, please click the link bellow to get the process started. I will follow up later to see if there is anything else that can be done to get you better coverage and service at a cheaper rate.

John Brookshaw

"We have been with Tradition Mutual Insurance for 60 plus years Kyle is one of the BEST agents we have ever had Full marks on everything!"

Kim Good

I have my car insurance with Tradition Mutual Insurance and am very pleased with the rates as well as the service I have experienced. Kyle will be sure to provide you with excellent customer service answering any question you may have thoroughly and honestly. He has excellent communication skills and does well to ensure that your insurance needs are met and exceeded.

Dayna Vyse

Kyle found me a much better fit for my auto insurance for a cheaper price and was very easy and pleasant to work with! Kyle was very prompt and responsive and never pushy or sales-y. Super great to work with!"

More than the cheapest car insurance but the best customer service and claim experiences you will find in Ontario, Canada 


Find a cheap car insurance quote for these Ontario cities and towns: 

Frequently asked auto insurance questions: 

Ways to get cheaper auto insurance in Ontario: 

New Driver Discounts

If you have auto and home/tenant insurance, you can save on both policies

Bundle Policies

If you have auto and home/tenant insurance, you can save on both policies

Multiple Vehicles

If you have more than one vehicle in the household insured, car insurance rates are cheaper

Pay Annually 

Paying annually instead of monthly will make your auto insurance premiums cheaper. 

Take Driver Training

For new drivers, having driver's training helps to lower auto rates and get cheaper insurance. 

Pay on Time

If you pay on time, your insurance record won't have any cancellations for non-payment and will get you cheaper rates. 

Relationship Status

Typically, the statistics for those who are married are better and can get you cheaper auto rates. 

Have a Clean Record

At fault collisions, convictions, dangerous driving charges etc make premiums higher. A clean record means cheaper auto rates.  

Low KM Use

The lower the usage of the vehicle, the cheaper the insurance. 

Shop & Compare

Rates range from company to company. Look around to see what is the best and cheapest. 

Raise Deductibles

The deductible is what you pay before the insurance company does. Higher deductibles make car insruance rates cheaper. 

Winter Tires

Discounts are available for having winter tires on your vehicle during the snowy season. 

Mandatory Car Insurance Coverages Required in Ontario

Liability Coverage 

For bodily injury or property damage of someone else, costs are covered for you.

Direct Compensation

If you are are not at fault, damages to your car are covered.

Uninsured Auto

If an uninsured driver is negligent, medical costs and physical damages are covered.

Accident Benefits

Regardless of  fault, medical and other expenses you are eligible to receive are paid out.  have entitled to receive are covered.

Optional and Enhanced Auto Insurance Coverages


Protects your vehicle from damage caused by perils like fire, hail or theft (besides collision or upset.)

Collision or Upset

Protects your vehicle from losses such as collision with another vehicle or object. 

All Perils

Combines collision or upset and comprehensive coverage and also includes increased theft coverage. 

Accident Forgiveness

With this protection, provided that you are not charged with a careless, your rates won't increase if you have a partial or 100% at fault accident. 

Rental Car Coverage

Liability for damage to non-owned Automobile(s)  when insured persons rent other automobiles. Contact for further details.

Vehicle Replacement

Coverage for reasonable expenses incurred in
renting a similar substitute automobile or obtaining alternate transportation while
the insured vehicle is out of use as a result of an insured loss.

Depreciation Protection

If eligible, vehicle can qualify for 24 months of replacement cost coverage instead of the depreciated value at the time of loss. 

Family Protection



If the other motorist has
insufficient insurance, additional protection is available for you subject to liability limits and policy agreements. 

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