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  • FAQs for Auto Insurance

    What is the mandatory amount of automobile insurance that I must have to drive in Ontario?

    The mandatory automobile insurance coverage in Ontario are: $200,000 of third party liability, statutory accident benefits, uninsured automobile and direct compensation-property damage.

    I know that demerit points affect my insurance that is why I always pay my traffic ticket immediately.

    What most people do not realize is that insurance companies are now assessing your risk level based on how many convictions you have on your record, and of course by how serious the offences are. Demerit points DO NOT affect your insurance. But what does, is getting convicted of an offence.

    What is No-Fault Insurance?

    The No-Fault insurance exists in Ontario and New Brunswick. "No Fault" refers to the fact that regardless of fault each person reports to their own company and companies do not sue each other to recover on certain types of losses. "No-Fault" does not literally mean that no one is "at fault". The insurance company is compelled to assess fault using the Fault Determination Rules that are part of the Insurance Act.

    Can I lose my Licence if I drive without insurance?

    You might, also do not forget that the penalty for driving without insurance are stiff. If you are having this kind of problem do not try to solve the matter by yourself, you will end up paying more than you should if you do not hire a Paralegal.

    I always pay my tickets right away, how come I have charges on my record?

    Paying your ticket automatically finds you guilty of the offence and creates a conviction on your driving record for 3 years.

    Will it affect my insurance rates if I make an accident claim?

    Assessment of rates for the most part is based on who is liable for the accident. Whether or not you claim for Accident Benefits once you have submitted a claim is not a factor when calculating rates.

    Do I have to report any accident to an insurance company?

    Each party involved in an accident reports to their own insurance company, regardless of who is at fault. As part of the Ontario policy, you agree to inform your insurance company of any accident involving the automobile that must be reported to the police under the Highway Traffic Act or for which you intend to make a claim under the policy. The Highway Traffic Act of Ontario indicates that you must report any accident that involves an injury, and must report any accident in which the total damages to all vehicles and property is greater than $1000. You must notify your insurance company within 7 days after the accident, or if unable, as soon as possible after that.

    What additional automobile insurance coverage can I buy?

    In addition to the mandatory insurance, you can buy coverage such as:

    • Collision coverage: this coverage pays for repair or replacement of your vehicle if it collides with another vehicle, flips over, or crashes into an object, as a result of accidents that you cause.
    • Comprehensive coverage: this coverage pays for losses from incidents other than a collision, such as fire, falling objects, theft and vandalism.
    • Increased third-party liability limit: the mandatory amount is $200,000 but you can increase the amount up to the limits the company provides. Additional protection of $1,000,000 is usually purchased.
    • Underinsured motorist coverage: part of Family Protection Coverage, it protects you or an eligible member of your family, to the same limits as your Third-Party Liability coverage, if you are involved in an automobile accident where you are not at fault, with someone who carries less insurance, no insurance, or is an unidentified driver.

    I have medical benefits through a plan at work. Why do I need to purchase statutory accident benefits on my auto insurance policy?

    In Ontario, automobile insurance is mandatory. The government has a responsibility to provide a product which addresses the needs of as many insurance consumers as possible and ensures that the interest of the public at large is protected. This is why all vehicles operated on the road must carry certain mandatory coverage. These coverage is liability, statutory accident benefits, uninsured automobile and direct compensation-property damage. The statutory accident benefits provided to persons insured are detailed in the Statutory Accident Benefits Schedule (SABS). Coverage includes, among other things, income replacement benefits, supplementary medical and rehabilitation benefits, death and funeral benefits and long-term care benefits. These benefits are available not only to the owner of the policy, but they could also be accessed by passengers in the vehicle, as well as pedestrians, who may not have coverage under their own automobile insurance policy.

    What factors affect my automobile insurance premium?

    Insurance companies use a variety of risk factors to determine a premium. The cost of automobile insurance for different drivers varies as the level of risk for the insurance companies varies. Factors that could affect your premiums include:

    • driving history, including previous at-fault accidents and driving violations;
    • type of vehicle including make, model and model year;
    • where you keep and drive your vehicle;
    • the age and gender, along with the number of years licensed;
    • the number of kilometres driven in a year;
    • whether the vehicle is used for pleasure, commuting or business purposes

    How does my company determine whether I am at fault in an accident?

    In Ontario, companies are required to use Regulation 668, Fault Determination Rules, to assess fault in an accident for purposes of vehicle damage. These rules help insurance companies deal with vehicle damage claims quickly and economically. These rules:

    • cover more than 40 accident situations using diagrams to illustrate specific occurrences;
    • can be applied to almost every possible road collision scenario; and,
    • are applied regardless of road or weather conditions, visibility, point of impact on the vehicles, or the actions of pedestrians.

    The police officer who attended the accident scene told me I was not at-fault in the accident. Why did my insurance company tell me that I am at-fault?

    A police officer may say that neither of the drivers were at-fault in a situation such as a vehicle being unable to stop on an icy road and rear-ending another vehicle. Such a comment relates to the laying of charges and should not be taken as an opinion about how the Fault Determination Rules apply to an auto insurance claim. In a case like this, the insurer would apply the rule stating that a vehicle which rear-ends another is at-fault.

    How does an at-fault accident affect my premium?

    In many cases, if you have your first at-fault accident after six or more years of claims-free and conviction-free driving, your premium may not change or may increase by a relatively small amount. Some insurance companies offer endorsements to drivers that will allow them to maintain their driving record or premium after a first at-fault accident. Most companies will change your driving record to reflect the accident and increase your premium by a small amount. You will need to regain your six years of accident-free driving before you return to lower premiums. If this is your second at-fault accident in the last six years, you can expect your premiums to increase quite significantly. If you have any convictions or cancellations of a policy, in addition to an at-fault accident, or are an inexperienced driver with an at-fault accident, you may be considered to be a high-risk driver and be placed with an insurer that specializes in these types of risks. When you are shopping around for insurance, you should always ask the broker or agent how your premiums will be affected after an at-fault accident.

    Does a driver’s licence suspension affect my auto insurance rates?

    Insurance companies increase rates for some types of licence suspensions, such as those due to driving related convictions. They may also not renew your policy or may cancel it due to these types of suspensions, if they have an approved underwriting rule permitting them to do so. Insurance companies do not raise rates for licence suspensions that are due to medical reasons, non-payment of fines (e.g., parking tickets) or where the suspension is for less than a year. Because each insurance company has unique underwriting rules and rating criteria that deal with licence suspensions, you should contact your insurance agent or broker to find out how a suspension will affect your rates.

    What can I do if my insurance agent or broker filled out my Ontario Application for Automobile Insurance incorrectly?

    You are responsible for checking your application for accuracy. By signing this form, you are agreeing to all the statements in it. Even if your answers are written by someone else, you are responsible for them. If the application was completed in person, then a licensed insurance agent or broker should have asked you to read and sign it to confirm that all of the questions had been answered correctly. If your insurance agent or broker is completing the application for you over the phone, request a completed hard copy to review and insist that it not be submitted to your insurance company until you sign it. If the insurance agent or broker remembers the omitted/incorrect information, ask him/her to communicate this to the insurance company immediately for further review. If the insurance company’s review is unfavourable, and you cannot resolve the issue with the company, you may want to contact the General Insurance OmbudService and/or obtain legal advice.

    What is an excluded driver endorsement?

    An excluded driver endorsement is an agreement that allows you to exclude specific drivers from being covered under your auto insurance policy. It is typically used by people who want to exclude a young driver in their household, or a driver with at-fault accidents or convictions, to avoid higher premiums. An excluded driver endorsement is signed by you and the driver(s) you want to exclude from your policy. By signing the endorsement, you promise to prohibit the excluded driver(s) from driving the vehicle described in the agreement. The excluded driver, by signing this agreement, promises not to drive this vehicle and acknowledges that if he/she does, there is no liability insurance in effect. However, if the excluded driver is found to have operated the vehicle while excluded, along with there being no liability insurance in effect, the owner of the vehicle and others legally responsible for the acts of the driver may be held personally liable for damages and injuries in the event of an accident. In addition, the insurance company may terminate or non-renew the policy for material misrepresentation or breach of contract if the insurance company has filed an underwriting rule permitting it to do so.