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Sinkhole, in Ottawa? How would Insurance Work?

Remember that every situation is unique so you should talk to your insurance broker for more information.

Let’s use a hypothetical situation and say a sinkhole appeared in the middle of the highway, out of nowhere ─  and a driver drives straight into it. Although the ultimate decision about claims rests with the particular insurance company, in this type of situation, we would expect the claim would be handled under the loss or damage section of the policy as a collision.

If the person in question did not have collision insurance at the time of the accident, they would be financially responsible for the loss of the vehicle. They would also have to pay for their own rental vehicle (if required), giving themselves sufficient time to find a replacement vehicle at their own expense. They would also be responsible for the costs involved in recouping the lost funds from the province if that was an option they wished to pursue. This would take time and money.

If the person in question had the full, appropriate physical damage coverage on the policy at the time of the accident, the insurance company would cover the loss of the vehicle, according to the terms of the insurance policy. They would also pay for a rental vehicle (assuming that coverage had been purchased), giving the client sufficient time to find a replacement vehicle. The claim would be subject to the policy deductible.

If the collision was a single car accident, it is technically considered to be an at fault claim. However, in situations such as these, the outcome of the claim would be handled on a case by case basis. A thorough investigation would take place in order to properly negotiate the settlement with the claims adjuster.

If the insured sustained injuries from the accident he/she would be entitled to compensation under the accident benefits portion of the policy, up to a certain limit. The option to increase accident benefits on an automobile policy is available for all licensed drivers in Ontario. Increasing this coverage comes with a minimal cost but could help protect you and your loved-ones in the event of a catastrophic accident.

For more information about accident benefits please contact your broker or read our Ontario Auto Accident Benefit information page for more details.

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