Accident Forgiveness in Ontario

Many insurers across the country provide accident forgiveness, which is exactly as it sounds – your insurer will forgive you for the first incident that is your fault. Accident forgiveness means your insurer will not increase your rates after your first at-fault accident. Offering policies with this add-on is increasingly common today and must be done annually when renewing your policy or if you switch providers.

However, there are limits and regulations associated with it.

You must have the endorsement active on your coverage before you have an at-fault accident. This rider only protects the policy's primary driver with a clean driving record.

Accident forgiveness will not apply if you are convicted of a Criminal Code offence related to an accident, such as impaired driving in Ontario, or if there is a major conviction on your record.

Accident forgiveness protects your driving record and your insurance costs. If you are at fault, your premiums will not increase if you have it. Never assume that it is included in your policy. It also has its own cost and needs to be added.

KKeep in mind that if you are involved in an incident, you may still have to pay your insurance deductible for repairs to your vehicle, even with accident forgiveness.

Example of accident forgiveness

Here's an example of how accident forgiveness could work:

Jane has had car insurance in Toronto with a provider for five years, enjoying a low premium of $1,200 per year due to her clean driving record. Jane gets into a fender bender in downtown Toronto. She rear-ended the vehicle in front of her at a traffic light. Her repair costs were covered after the minor at-fault accident. Thanks to the accident forgiveness feature, her premium remained unchanged at $1,200 for the next year, providing financial relief and peace of mind.

Many insurers offer accident forgiveness. How it is offered and the specific details will vary. For some, it comes standard; and for others, it is an additional add-on or an endorsement.

Built-in

Many insurers offer this accident forgiveness as part of their standard policies. It is often available to drivers who have clean driving records.

Endorsement

Accident forgiveness is offered by insurers as additional protection. These packages can be purchased and go above and beyond what is covered in standard auto coverage.

Not all drivers qualify for accident forgiveness. It is available to drivers with clean driving records. It is a way for insurers to reward claim-free drivers.

You cannot switch insurers to get it if you have a poor driving record or have been in multiple accidents. If this were the case, drivers would switch providers every time they got into a mishap.

Here are some of the eligibility requirements you may need to meet to qualify for adding the protection. Companies that offer it may require the following:

• Must have an active policy: You must be currently insured.
• Accident free period: You must be licensed and free of mishaps for a defined number of years (usually 6).
• Vehicles for personal use onle: Coverage is for private passenger automobiles only. It is not included with commercial auto insurance.
• When you get a new car: Eligibility will continue, even if you get a new vehicle.
• When you get a new policy: Some insurers will offer it as a way to acquire new customers when clients reach out for auto insurance.

There are many benefits to having accident forgiveness, including:

• First accident is forgiven: The first accident you are responsible for is forgiven, so it does not go on your driving record or affect your monthly payments.
• Standard with some companies: It may be included in policies for eligible drivers.
• Incentive to drive safely: It is an incentive to drive safely and stay claims free.
• Helps keep your rates low: It helps to protect the low premiums you have worked to get.

You likely already have good rates if you have a clean driving record. It may be worth it to get it to protect yourself in the event of causing an incident.

New regulations about accidents and premium increases have made many drivers second guess the need for additional protection. The Financial Services Commission of Ontario explains:

Insurers can no longer use a minor at-fault accident that occurs on or after June 1, 2016 meeting certain criteria to increase your premiums. The criteria include that no payment has been made by any insurer, that there are no injuries and that damages to each car and property were less than $2,000 per car and were paid by the at-fault driver. This provision is limited to one minor accident every three years.

Therefore, it is worthwhile only in the event of at-fault incidents involving significant damage – something to think about when considering before adding this endorsement to your policy.

Accident forgiveness does have limitations and conditions. Each company has a different set of rules for how it is governed. It’s important to read the fine print and understand the protection it provides.

Some of the common constraints include:

• First accident only: It only applies to your first at fault accident.
• This may not apply if you switch insurance companies: It does not travel with you if you switch providers.
• Accident-free period: You need to be accident-free for a specified period of time before an incident happens.
• Primary driver: It only protects the primary driver on the policy, not secondary drivers.
• Demerit points: It does not protect you from being charged or getting demerit points.
• Major driving offence: It does not apply if you are convicted of a major driving offence under the Ontario Highway Traffic Act or criminal charges.
• All companies have different coverage and rules: Companies administer it differently and have different applicable limits.
• Qualifying period: You may be required to be with your insurer for a specific period before qualifying.